Mr Hague: I can only speak about the legal framework operating now on the basis of two Acts of Parliament, in 1994 and 2000, and I can assure the hon. Gentleman that if the Home Secretary and I were signing off interception warrants on political grounds, we would be

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in a great deal of trouble with the intercept commissioner and the ISC. The hon. Gentleman can be reassured about that.

Michael Ellis (Northampton North) (Con): Does my right hon. Friend agree that our relationship with the US is a cornerstone of our national security infrastructure; that the exchange of material works both ways, aiding the US as well as the UK; that those who work on the paranoid assumption that this or some other programme is there to spy on UK and US citizens are wrong; and that a large proportion of the data collected is against third-party citizens in third-party countries?

Mr Hague: My hon. Friend is absolutely right, including about the importance of the relationship and about how inevitably the vast majority of work done together by the UK and US intelligence agencies is to guard against threats from elsewhere in the world.

Mr Dennis Skinner (Bolsover) (Lab): Following on from what my hon. Friend the Member for Blyth Valley (Mr Campbell) said, and the fact that GCHQ has been involved in trade union disputes for a long time, can the Foreign Secretary give me an assurance? He will not explain precisely how this interception takes place on the advice of a Minister; but surely, if the Prime Minister of the day in 1984 said that the miners and the NUM were the “enemy within”, would that not give the green light to GCHQ to intervene in every single coalfield? Because that is what we believed.

Mr Hague: We are in a different century now—we are 13 years into the 21st century. The challenges are different and the focus of the intelligence agencies is different from decades in the past and very different, of course, from during the cold war. It is important for Opposition Members below the Gangway to start to move with the times.

Nick Herbert (Arundel and South Downs) (Con): Has not our national security relied for centuries on the effective intercept of communications? The Spanish armada was said to have been averted as much by the pen of Francis Walsingham as by the Royal Navy. Surely what has changed is the nature of those communications. The threat to the public comes not from the intelligence agencies, which have no interest at all in the communications of members of the public; but they will not be able to intercept communications if those data are not retained by providers.

Mr Hague: Since I refused to go back into the miners’ strike, I am reluctant to go into the Spanish armada, but the wider point that my right hon. Friend makes is of course absolutely correct. Two cross-party Committees in this House have looked at proposals for a communications data Bill, for instance, and said that changes are necessary, and he is adding to that point.

Mr William Bain (Glasgow North East) (Lab): Can the Secretary of State spell out to the House the precise difference between the legal framework applicable to the obtaining of intercept data by our intelligence services and that which applies to the use by our intelligence services of information obtained by their counterparts overseas?

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Mr Hague: The legal framework is the one I have set out. The Acts that I have referred to, passed by Parliament, apply to all the intelligence gathered by the agencies. The hon. Gentleman will know that, for instance, section 3 of the Intelligence Services Act 1994 confers particular powers and roles on GCHQ, so these things are governed by the same Acts of Parliament. Procedures differ, of course, in many different situations. It is because I cannot describe all those situations in public that I cannot go into exactly what that means for procedures in every case. I therefore cannot go as far in reassuring the hon. Gentleman or the shadow Foreign Secretary as they would like, but if they could see the full details of what happens, I think they would take an enormous measure of reassurance from it.

Sir Tony Baldry (Banbury) (Con): Given the comments of the right hon. Member for Blackburn (Mr Straw) and other former Cabinet Ministers on the Opposition Benches, can the House reasonably infer that there has been no change in policy with regard to GCHQ and information sharing from the last Government—in other words, that the system that prevails at present is identical to that pertained when Labour was in government?

Mr Hague: The challenges of gathering intelligence change over time, so I would not want to give the House the impression that all practices and techniques are exactly the same or used in the same way. I can say, as I said in my statement, that the general framework remains the same—the principles of our intelligence sharing with the United States and the general framework for it certainly remain the same. The values on which it is based also remain the same, as under successive Governments.

Pete Wishart (Perth and North Perthshire) (SNP): We know that the Foreign Secretary, the Home Secretary and all his right hon. Friends in the Conservative party Cabinet want the retention of large swathes of personal data, and he is prepared to compromise our civil liberties to obtain that, but does this episode not demonstrate what could go wrong if we had a home-grown snooper’s charter?

Mr Hague: I think the hon. Gentleman is referring to the draft Communications Data Bill, which I have already mentioned in earlier answers. Two parliamentary Committees have considered the draft Bill and concluded that there is a need for legislation in this area, and the Government are committed to bringing forward proposals on that in the near future.

Bob Stewart (Beckenham) (Con): We are actually at cyber-war at the moment. Since 2000, the cyber-attacks on this country have multiplied some twentyfold. The Chinese held an exercise last week that they called a digital technology exercise at divisional level, involving men in uniform who are designed specifically to attack the west. Hacking can be far more deadly than a gun. May I encourage the Foreign Secretary and all his colleagues to ensure that GCHQ is as close to the National Security Agency as possible in the future?

Mr Hague: As I have said, GCHQ has a unique relationship with the National Security Agency. My hon. Friend is right to say that cyber-attack is an increasing threat in many different areas of government

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and of life in general. That is why the Government decided, in the strategic defence and security review three years ago, to invest an additional £650 million in our cyber-capabilities over a four-year period. The United Kingdom is one of the world leaders in cyber-defence and cyber-capabilities, and we are determined that we will remain in that position.

Mr Tom Watson (West Bromwich East) (Lab): For clarity, will the Foreign Secretary tell us whether he was told how the NSA collects this information, and on what date he was made aware of the Prism project?

Mr Hague: I go back to what I have said about being unable to confirm or deny leaked information. I am not commenting at all on information that has appeared in the newspapers. There might be leaks in the future from who knows what agency, and I would take the same view in such circumstances. We cannot conduct ourselves in these matters by commenting on every leak that takes place. The Intelligence and Security Committee will be able to look at these questions, but I cannot tell the hon. Gentleman in public the answers to the questions that he is raising.

Rory Stewart (Penrith and The Border) (Con): Because this type of secret operation involves not just a legal problem but a difficult balancing of security and liberty, we should do more to explain what we are doing. An American citizen would have the right to an answer to the question that my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) asked about location information being offered for American drone strikes. Unless we begin to explain more to the public, secret operations will not be sustainable in the long term. The public must understand and, through understanding, consent.

Mr Hague: I go a certain way with my hon. Friend on this. There is a need to explain to the public in this country more than we have done for decades about the role of secret intelligence, its purpose and what it achieves. However, I do not think that will mean that we are able to describe in detail how our co-operation with other countries works on operational matters, for many obvious reasons. It would make it more difficult for us to protect this country if other people knew the exact techniques that we used. Also, other countries would be less willing to share their intelligence with the UK if they thought that we were not good at keeping it to ourselves. But we certainly need to raise public awareness of the need for what we do, and I started to do that in my speech on this subject in 2011. Perhaps today’s statement will also have that effect.

Paul Flynn (Newport West) (Lab): The Cathy Massiter case proved that, 50 years after the last war, intensive surveillance of peace activists, trade unionists and left-wing parties had failed to turn up a single spy, but it was discovered that in that same period, more than 20 members of the Secret Intelligence Service were spying for the Soviet Union. Since then, we have had untruths on weapons of mass destruction and a Government cover-up to this House on the handing over of prisoners to oppressive regimes to be tortured. Is the Foreign Secretary telling us today that the only people now under surveillance are the guilty? How does he manage that?

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Mr Hague: I am telling the hon. Gentleman and the House about the many checks and balances and the strong legal framework. On all the controversies that he lists about the past—and they are controversies rather than necessarily facts—it would be fair to point out that there has been a constant process under successive Governments of improving how the intelligence agencies work. After the controversies over the use of intelligence in the Iraq war, for instance, we saw the Butler report, which has substantially changed the way intelligence is presented to Ministers and the way that Ministers decide. I referred in my statement to the creation of the National Security Council and to intelligence being given its due but proper weight alongside other information and considered in the round. The hon. Gentleman should take heart from the fact that such improvements take place.

Duncan Hames (Chippenham) (LD): It is good to know that our legal framework is not lost on the Foreign Secretary. He tells us that there are no grounds for suggesting that GCHQ obtained information from the United States that it could not obtain legally in the UK. Is it also the case that there are standard procedures in place sufficient to prevent that from happening?

Mr Hague: What I have argued is that the idea of GCHQ setting out to circumvent UK law by co-operation with other countries is baseless. UK law is applied to the data it receives, even if it is received from the United States, because ministerial oversight and independent oversight is all there. Part of the purpose of that oversight is to ensure that the misuse of the powers and the role of GCHQ does not take place.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): The term is always used that the intelligence services always operate within a “legal framework”. Is the Foreign Secretary certain that “legal framework” always means ethically and within the law, and that peaceful democratically elected political parties in the UK are not involved?

Mr Hague: Well, yes, it does mean those things. It means that the legal framework is properly applied and what the agencies do has to be targeted, necessary, proportionate and authorised. It also has to be for the purposes set out in the relevant Acts of Parliament in the interests of national security, the country’s economic well-being or the prevention of serious crime and the protection of the country from it. These are the purposes of our intelligence agencies—and they stick to them.

Dr Sarah Wollaston (Totnes) (Con): Is the Foreign Secretary absolutely confident that, if a member of staff working at GCHQ had real concerns about wrongdoing among colleagues, the channels exist for that member of staff to have their concerns heard without needing to go to the media?

Mr Hague: Yes, absolutely. In such a case, concerns can be raised through the management structure. There is also the Investigatory Powers Tribunal, to which members of the intelligence services can take complaints or concerns without having to do so in public.

Several hon. Members rose

Mr Speaker: I call Margot James.

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Margot James (Stourbridge) (Con): I am so sorry, Mr Speaker, but I was just getting up to leave the Chamber.

Mr Speaker: We are sorry the hon. Lady is taking her leave, but we will hear from her on other occasions. [Interruption.] She has nothing for which to apologise. I mistakenly thought she was trying to contribute. She should take her leave; we will give her a cheer [Hon. Members: “Hurray.]We will hear from her again soon. She is a very regular contributor.

Mr Philip Hollobone (Kettering) (Con): May I commend my right hon. Friend for his statement, for his personal grip and command over this issue and for the work that the security services do? I imagine that from the nature of the work they do and the people they are, our security services people are reticent about talking of their successes. At a time of heightened tension over international and domestic terrorism, will the Foreign Secretary encourage our security services wherever possible to put into the public domain the success stories in countering threats to our national security?

Mr Hague: My hon. Friend is right to suggest that we should be able to celebrate the successes of our security services. Unfortunately, however, we shall have to continue to celebrate those successes in fairly general terms. As my hon. Friend will understand, if we proclaimed some of our most successful intelligence operations in public, it would be very difficult to repeat them. Unfortunately, we have to protect this country against the same type of threat again and again, and from terrorism in particular. I therefore cannot, at the moment, offer a more specific statement about what the security services have succeeded in doing, but my hon. Friend can take it from me that there is much that is not known in relation to the protection of this country from terrorism in particular, but also from organised crime, that the country would truly celebrate if it knew about it.

Mark Pritchard (The Wrekin) (Con): I join the Foreign Secretary in praising the professionalism and dedication of the staff of both the SIS and GCHQ. Edward Snowden, the CIA official who leaked the information, said that had he leaked it because he wanted to stand up against oppression and stand up for liberty. Is there not a perverse paradox that that gentleman made those claims not from Washington or London, but from the People’s Republic of China?

Mr Hague: Having earlier set myself the rule of not attacking the conduct of other nations, I am not going to break that rule now, but other people will be able to comment on this particular individual and his role. It is, of course, important for everyone who works for the agencies to remember that part of their responsibility is to uphold the laws of their country, and that in the case of the United States and the United Kingdom, those laws are designed to protect the lives and liberty of the citizens of those countries. That seems to have been too easily forgotten over the last few days.

Jason McCartney (Colne Valley) (Con): NATO suffered a suspected 2,500 cyber-attacks on its network last year. Can my right hon. Friend tell us whether there is a similar level of suspected cyber-attacks on GCHQ ?

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Mr Hague: There are undoubtedly cyber-attacks against all western intelligence agencies, including GCHQ, but GCHQ is particularly well adapted to defend itself against such attacks, and to have some idea of where they are coming from and when they are coming. I will not go into any more detail than that, but people would be quite fortunate to mount a successful cyber-attack against GCHQ itself.

Julian Smith (Skipton and Ripon) (Con): As we have heard, the rigour, quality and sheer scale of American intelligence is second to none. Given the threats that the UK currently faces, may I urge the Foreign Secretary to continue his robust public defence of the UK-US intelligence relationship?

Mr Hague: I feel suitably earthed by my hon. Friend, and by many other Members. It is always worth reminding ourselves again of the indispensable nature of that relationship, although we cannot give many of the details about it. It is a fundamental part—a cornerstone, as one of our hon. Friends said earlier—of maintaining the security of this country.

Mr Dominic Raab (Esher and Walton) (Con): I welcome the reassurances given by the Foreign Secretary. I merely seek clarification of one point. If the UK is intercepting e-mails of British citizens, it requires a warrant from the Secretary of State, but that vital check is not in place when communications are received under Prism. Does the Foreign Secretary accept that Prism can be used quite legally to sidestep the level of safeguards that apply to UK-sourced intercept? How do we mitigate that risk?

Mr Hague: Again, I do not want anything that I say to be taken as a comment on information that has been leaked over the last few days, but the Intelligence and Security Committee will be able to study the issues raised by it, including the issues raised by my hon. Friend. That is the proper forum. I have already stressed the way in which ministerial and independent oversight applies to our relations with other intelligence agencies, including those in the United States, and my hon. Friend should therefore not jump to any conclusions about the absence of such oversight and authority.

Stephen Mosley (City of Chester) (Con): Does my right hon. Friend agree that the concerns raised by some Members of this House demonstrate the limitations of the current RIPA system, which has failed to keep up with modern technological trends, and that there is a need for new measures, such as the draft Communications Data Bill, as amended by a Joint Committee of the Lords and the Commons, to ensure that our legislation is up to date, has parliamentary oversight and covers all the concerns raised?

Mr Hague: The case for the draft Communications Data Bill rests on its own merits. My hon. Friend refers to some of those merits and the Government will bring forward proposals in the near future on that subject.

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Better Defence Acquisition

5.4 pm

The Secretary of State for Defence (Mr Philip Hammond): The defence of UK national interests is a priority for this Government. To secure that defence, we must provide our armed forces with the equipment and capabilities they need to operate in a rapidly changing security environment. Without the right equipment, delivered on time, properly maintained and available for use, our armed forces cannot function effectively and our national interests are put at risk. Effective procurement and support of defence equipment is therefore not just desirable, but an essential part of maintaining flexible and effective armed forces.

For decades, there has been an acknowledgement that defence acquisition in this country can, and should, be done better. Despite numerous reviews and reorganisations, successive Governments have failed to embed the systemic changes necessary to achieve that objective. We owe it to the men and women of our armed forces, and to the long-suffering taxpayer, to do better.

Two separate independent studies carried out for the Ministry of Defence have suggested that the costs arising from inefficiency in the procurement process are between £1.3 billion and £2.2 billion per annum. Waste on that scale is unacceptable at any time; more so at a time of acute pressure on the public finances. I am determined to drive a step change in the way we do our defence procurement business.

In April, I announced to the House that we had launched the assessment phase for the Department's matériel strategy programme, considering two options for the future of the Defence Equipment and Support organisation: the first, a public sector benchmark, which we call “DE&S+”; and the second a Government-owned, contractor-operated entity, a “GoCo”.

Today, I am publishing a White Paper that sets out the matériel strategy proposals in more detail, and provides more information about our intention to create a new statutory framework to drive better value in single-source procurement contracts, protecting the taxpayer in this significant area of MOD business. We believe that a GoCo-operating model is the solution that is most likely effectively to embed and sustain the significant change that is required to reform defence acquisition, but the decision will be based on an objective value-for-money comparison between the GoCo and DE&S+ options. The assessment phase is designed to deliver specific, costed, contract-quality proposals from GoCo bidders and test them against the DE&S+ benchmark.

There has been considerable speculation in the media and elsewhere about the scope of a GoCo. At the most extreme, I have seen it suggested that the proposal is simply to hand over £15 billion a year of taxpayers' money to a private company and leave it to decide what kit to buy for our armed forces. Let me reassure the House that that is emphatically not the proposition. If GoCo is the selected option, the GoCo partner will manage DE&S on behalf of the Secretary of State. It will act as his agent. All contracts will continue to be entered into in the name of the Secretary of State. Strategic direction will be provided by a governance function that will remain within the MOD. The GoCo’s customers will be the front-line commands and the

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MOD itself. The DE&S work force will be transferred to the GoCo-operating company under standard TUPE arrangements and we will expect the GoCo partner to inject a small number of senior managers, and possibly some key technical staff.

Crucially, the GoCo is assumed to be able to recruit and reward its staff at market rates—a critical freedom in a business that is required to deal with the private commercial sector on a daily basis. The proposal set out in the White Paper is for a phased transfer of DE&S to a GoCo, with checks and break points to allow us to halt the process if it is not delivering the results we require. The legislation and the contract will include a transfer regime that will allow the Secretary of State to transfer the business to another contractor, or back to the MOD, in extremis. If, at the end of the assessment phase, a GoCo operating model is selected, we will need to be able to move quickly to conclude a contract with the successful bidder. The Government therefore intend to provide in the Defence Reform Bill the necessary authorities to let a GoCo contract in 2014, together with measures required to allow a GoCo to operate effectively.

There are finely balanced arguments about whether primary legislation is strictly required to allow the establishment of a GoCo. The Government have, however, decided that it is right that we should legislate in this instance because of the importance of DE&S+ to our armed forces and in order to ensure that Members of both Houses, many of whom take a keen interest in defence matters, have a proper opportunity to explore and debate the issues.

The White Paper sets out the proposed model for a GoCo, its key features and our expectations with regard to the control that the Department will continue to exercise and the freedoms that the GoCo will enjoy. Its purpose is to set in context the legislation that we are bringing forward in the Defence Reform Bill, including provisions to ensure that the Ministry of Defence police have the appropriate jurisdiction to be able to operate within the GoCo environment, to extend certain statutory immunities and exemptions enjoyed by the Crown—for example, in relation to the Health and Safety at Work etc. Act 1974 and the Nuclear Installations Act 1965—to the new body, and to allow the transfer of shares in the operating company and/or property, rights and liabilities in the operating company or contracting entity at the direction of the Secretary of State.

The White Paper also sets out reforms to how the MOD undertakes single-source procurement of defence equipment. Open competition is our preferred approach for getting value for money, but sometimes there is only a single provider of a capability we require, and the need to maintain critical national industrial capabilities or sovereign control of the intellectual property in equipment programmes sometimes requires us to place contracts with UK companies without a competitive process.

Single-source procurement accounts for about 45% of the total the MOD spends on defence equipment and support, or about £6 billion per year, and is likely to remain at those levels for the next decade or so. Without competition, suppliers can price and perform without being constrained by the disciplines of the marketplace.

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There is a clear risk to defence and the taxpayer, and ensuring that we get good value for money in single-source procurement is a key part of my programme to reform defence acquisition.

The MOD currently uses a framework for single-source procurement that has remained largely unchanged for the last 45 years, despite the far-reaching changes to the industrial landscape and to commercial procurement practices that have occurred in that time. Under this system, the profit contractors can earn is fixed, but there are few incentives for them to reduce costs. Such a system does not serve the best interests either of defence or of a competitive, export-focused defence industry.

In 2011, the MOD commissioned Lord Currie of Marylebone to undertake an independent review of our existing approach and to make recommendations. He recommended a new framework based on transparency of contractor cost data, with much stronger supplier efficiency incentives, underpinned by stronger governance arrangements. Based on his recommendations and extensive consultations with our major single-source suppliers, we have developed the new framework I am proposing, details of which are set out in the White Paper. At its heart is the principle that industry gets a fair profit in exchange for providing the MOD with the transparency and protections we need to assure value for money.

A statutory basis will ensure widespread coverage across our single-source suppliers and application of the regime throughout the single-source supply chain. The system will be policed by a stronger, independent, single source regulations office to monitor adherence and to ensure the regime is kept up to date. These changes will incentivise efficiency in operating costs and minimisation of overheads, supporting UK defence sector competitiveness both at home and in export markets.

The proposals set out in this White Paper will deliver the real reform our acquisition system needs to provide the support our front-line forces deserve, to maximise the benefit of our £160 billion 10-year defence equipment programme, and to deliver value for money for the taxpayer. I commend this statement to the House.

5.14 pm

Mr Jim Murphy (East Renfrewshire) (Lab): I start by thanking the Secretary of State for his statement and for advance sight of it. Reform of defence procurement is one of the major challenges facing UK defence. Those on both sides of the House will want to see reforms that deal with overspends and overruns, and ensure that world-class equipment is delivered when and where our forces need it. For too long, the good intentions of successive Administrations have not delivered sufficient reform in defence procurement. However, just as some of the responsibility can be shared, our resolve to learn the right lessons and deliver far-reaching reform must also be collective. We therefore welcome much of today’s statement.

Future procurement systems must provide value for money within financial constraints. Better performance will come from greater professional project management, faster decision making, fuller accountability for outcomes and a more considered use of military expertise. Labour supports reforms—the Bernard Gray report, on which

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today’s White Paper is based, was commissioned by the previous Government. We have proposed a new budgetary discipline, whereby deferred decisions that increase cost are accounted for within a rolling 10-year cycle, and increased certainty for industry over sovereign and off-the-shelf capabilities.

Labour Members are open-minded about how that is achieved, but I wish to be clear that welcoming this process today is not the same thing as supporting a GoCo in principle. There needs to be rigorous examination of all the possible options and a robust comparison between the two options of a GoCo model and DE&S+. That comparison should rest on the principles of ensuring value for money within programmes; industry adhering to new targets on time and cost; maintaining parliamentary accountability; enhancing a culture of consequence for decision makers; and military involvement being based on tri-service working, not on single-service rivalry. So reform must extend across the Ministry of Defence. Too often, scope creep has led to systems exceeding identified need, and major decisions have been pushed to the right to save in the short term at the expense of longer-term budgetary bow wave. Today’s challenge for Ministers is not just to determine a management model, but to demonstrate that decades-long entrenched behaviours are being corrected.

Let me deal with the specifics of today’s announcement. On the assessment phase, will the Secretary of State pledge to publish the findings of the two value-for-money studies and allow for a consideration by this House prior to a final decision being taken in the legislation? It is essential that Parliament, industry and our armed forces have full confidence that strategic affordability is the determining factor in this process. On costs, will the Secretary of State say whether the new management team of either model would re-cost the baseline of the core equipment programme, or would the figures published earlier this year remain? Furthermore, in the light of the National Audit Office’s observation that the MOD’s assessment of risk is “not statistically viable”, would the new management be able to reform the current method of risk assessment? On staffing, the MOD has said that current reductions will not affect outputs. Would either management model be able to make decisions over staffing independently from the Secretary of State? Will he confirm that trade unions will be consulted throughout the assessment phase?

It is essential to maximise military expertise, so will the Secretary of State say whether he considers it preferable to change the current ratio of military to civilian numbers in procurement within the MOD? Specifically on the GoCo, will he pledge that senior officials currently working on this process within the MOD will not be able to work for the GoCo consortium without a prolonged period of purdah? Many in the country will have a concern about the extent of a private entity’s potential reach over public policy. So, under these plans would a GoCo model cover the whole equipment programme, including the nuclear deterrent? What is the time scale for the implementation of a GoCo? That will enable us to judge when efficiencies may begin to accrue.

One of the biggest uncertainties around GoCo has to do with the ownership of risk and whether contractors could generate private profit while financial risk remained in public hands. For example, can the Secretary of State say whether liability for the £468 million cost overrun

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noted in the National Audit Office’s “Major Projects Report 2012” would have rested with the taxpayer or the GoCo, had it been established?

On the single source regulations office, we welcome the proposal in principle and will examine it closely. It is essential to drive down cost where possible in single sourcing, as the Secretary of State said. Will he say a little more about who would appoint the members, and whether regulations would be subject to the one-in, one-out rule?

In conclusion, we will support what we hope is a genuine competition. We will scrutinise the processes carefully, because efficient and effective defence procurement is essential, not just for the Ministry of Defence bottom line, but for the remarkable men and women of our armed forces, whom we place in harm’s way to serve on the front line.

Mr Hammond: I am grateful to the right hon. Gentleman for his welcome of this announcement. Of course I completely accept that the Opposition’s willingness to look at the issues with an open mind is not the same as an uncritical endorsement of the GoCo concept, and just in case I did not make this clear in my opening remarks, we have not yet accepted the GoCo concept as the chosen outcome; we are conducting an assessment. However, I think we agree across the House—Opposition Members who have, in office, experienced the challenge of trying to make the defence budget add up will certainly agree—on the need for change. The intentions are very clear.

The process that we are talking about was kicked off by the Gray report, published in 2009. I note that the then Secretary of State has strongly endorsed the GoCo model, which he feels is the way forward. We are examining the case for GoCo against the baseline of DE&S+. We have two separate teams, working with Chinese walls between them, that are equally resourced. One is trying to build the maximum fully-public-sector case that it can, taking advantage of all freedoms and flexibilities available. The other is working with potential GoCo bidders to look at the value that they can deliver. At the end of the process, we will make a comparison.

The right hon. Gentleman talked about the cost drivers from past scope creep. One of the clear advantages of changing the way that DE&S works is creating a harder boundary between the customer and the company supplying the requirements, making it less easy for scope to creep without a proper change process and proper recognition of the costs involved. He asked me whether the baseline would be re-costed. We do not anticipate a re-costing of the programme baseline. If we go down the GoCo route, we will negotiate with GoCo bidders for an incentivised fee structure, based on the existing costed programme. He will know that an independent cost advisory service sits alongside DE&S, and will play a continuing role in independently assessing the costs of projects and the appropriate level of risk to be attached to them.

Unsurprisingly, the right hon. Gentleman asked me about staffing levels in a post-GoCo DE&S, if GoCo is the selected solution. The staffing transfer would be made under the TUPE regulations. We anticipate about 8,000 of DE&S’s projected 14,500 2015 staff numbers transferring to the new entity, with the remainder—in

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naval dockyards, logistics, communications, and information services—remaining in other parts of Government, or being outsourced.

There is no reason to suppose that the GoCo route is more likely to deliver further staffing reductions than any other route. Clearly, the new management team, whether it is a GoCo or DE&S+, will seek to run the business efficiently, and to use the freedoms and flexibilities available to it to deliver outputs as effectively as possible.

The right hon. Gentleman asked me about the ratio of military to civilian personnel in DE&S. At present about 25% of the personnel in DE&S are military. We expect the military role, which will be performed by secondees in the future, to focus on providing specifically military advice to the DE&S organisation, rather than filling line management and project management roles, so I do not expect the military proportion of staff to increase, and it may decrease under a future model.

The right hon. Gentleman asked me a question, the motivation for which I entirely understand, about senior officials. Nobody wants to see such exercises becoming a gilded exit route for senior officials, and I am pleased to be able to tell him that the Chief of Defence Matériel, the most senior official in DE&S, will transfer to the MOD side—the customer side—of the equation and will be responsible for designing and managing the customer side. I cannot, as the right hon. Gentleman knows, give him an absolute assurance that other officials in the Department, should they choose to leave the Department, would not at some point in the future be able to join a GoCo, but of course there are rules and restrictions in place—a Cabinet Office regime which has been reinforced following revelations in The Sunday Times last year—and we will make sure that nobody is able to abuse this process.

The right hon. Gentleman asked me whether the GoCo would cover the nuclear deterrent. It will certainly cover the procurement of Vanguard replacement submarines. The management of our nuclear warheads is carried out by the Atomic Weapons Establishment, itself already a GoCo. We have not yet finally decided whether the new GoCo, if there is one, will be responsible for managing the MOD’s relationship with AWE or whether that will be managed directly. That will be one of the issues dealt with in negotiation with potential GoCo bidders.

On timescale, I can tell the right hon. Gentleman that we expect to reach a decision in the summer of next year, with a view to the new arrangements, whether GoCo or DE&S, being stood up before the end of 2014.

Finally, I turn to the question of risk ownership. This is an important point which has been somewhat misunderstood by some commentators. Clearly, it would be very attractive to think that we could transfer the programme risk in the defence equipment programme—£160 billion of it—to somebody in the private sector, but the reality is that there is nobody who has a balance sheet big enough, probably anywhere in the world, and the taxpayer would not be prepared to accept the price for taking on that risk, so the risk ownership in the programme will remain with the Government and the taxpayer. What the private sector partner will be at risk for is his fee, which will be structured in such a way as to incentivise the delivery of the key performance indicators

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that will be agreed with the partner during the negotiation process. That will be designed to align the GoCo partner’s incentives with the interests and priorities of the Department. That is where a great deal of our time and energy is being invested at present.

Mr James Arbuthnot (North East Hampshire) (Con): What discussions has my right hon. Friend had with key allies, notably the United States and France, about this proposal and what has been their response?

Mr Hammond: I thank my right hon. Friend for a very important question. We have had discussions with key allies, notably the United States and France. The United States, contrary to some media reporting, is relaxed about this process. It recognises that there will be some technical issues that we need to resolve, but I am glad to be able to tell him that the Chief of Defence Matériel received this morning, by coincidence, a letter from his counterpart, the Under-Secretary for defence procurement, in the Pentagon confirming that the United States is confident that it will be possible to make these arrangements work. We have set up a joint working group to work through the issues that will need to be addressed before a decision is made.

Mrs Madeleine Moon (Bridgend) (Lab): What powers will Defence Ministers and Select Committees have to intervene and examine contracts, negotiations and procurements if the GoCo goes ahead? What powers of oversight will Parliament retain?

Mr Hammond: As I said earlier, the procurement contracts will still be entered into in the name of the Secretary of State. The Secretary of State and Ministers will remain accountable to Parliament and to the Select Committee. The permanent secretary at the Ministry of Defence will remain accountable to the Public Accounts Committee, and access to and scrutiny and oversight of those contracts will be exactly the same as they are now.

Bob Stewart (Beckenham) (Con): Will the proposed GoCo have the power to negotiate independently of the Ministry of Defence to try to get a really good deal out of a foreign defence contractor in, for example, the United States?

Mr Hammond: If doing so was within the remit given it by the Secretary of State, it would have that power. I need to be very clear about this. The point of hiring a commercial partner is to deploy its commercial expertise. There is no point hiring it and then constraining it so tightly that we do not get any benefit from it. On the other hand, it will be very clear, and I am very clear, that it will always operate within the framework of strategic direction that has been given by the Secretary of State, and the Secretary of State will retain a power to intervene and specifically direct it on a specific point within its management of a programme if necessary.

Angus Robertson (Moray) (SNP): I thank the Secretary of State for advance sight of his statement. Will he clarify that should one go down the GoCo route he has no objection in principle to the winner of a GoCo contract, should that be the preferred outcome, being headquartered in the United States, Europe or further afield?

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Mr Hammond: The hon. Gentleman and the House might be interested to know that of the 21 expressions of interest that we have received in response to the issue of the pre-qualification questionnaire, a third have been UK-headquartered companies, but it is likely that the winner of a competition for a GoCo will be a consortium and it is highly likely that some members of that consortium will be non-UK companies. In fact, to be frank, it is highly likely that it will include US-headquartered companies, but the entity with which we contract will be UK-registered and domiciled, and will pay its tax in the UK.

Penny Mordaunt (Portsmouth North) (Con): I congratulate the ministerial team on its progress on this important matter. DE&S covers Her Majesty’s Navy bases. Will the Secretary of State reassure me that his announcement today will not affect the proposal to transfer them to the Royal Navy?

Mr Hammond: I can assure my hon. Friend that the plan to transfer the Royal Navy dockyards out of DE&S, along with the plan to transfer the logistics and commodities supply service out of DE&S to an outsource contractor, will continue on track. That is why there is a gap between the projected 2015 total numbers of DE&S on a steady state basis, and the 8,000 that we are expecting to transfer under a TUPE transfer if we go down this route.

Hugh Bayley (York Central) (Lab): How much does the Secretary of State think that the new arrangement will save each year? Will those savings be used to buy additional equipment for our armed forces, or simply returned to the Treasury, leaving our servicemen with less?

Mr Hammond: The latter part of the hon. Gentleman’s question is clearly one that I cannot answer on a unilateral basis, but I suspect that, in the way that generally happens, there is a potential win-win situation here—a win for the taxpayer in terms of lower public expenditure and a win for the armed forces in terms of greater capabilities being able to be purchased. I think I included these figures in my statement, but the independent estimates are that somewhere between £1.3 billion and £2.2 billion of frictional costs generated by inefficiencies in the procurement system are incurred every year. It would be a very rash man who suggested that we can squeeze out every last pound of those, but I would expect us to be able to achieve net gains after taking account of the cost of the arrangements—the GoCo fee and the cost of the governance function on the MOD side—in the hundreds of millions of pounds.

Mr Julian Brazier (Canterbury) (Con): I welcome my right hon. Friend’s thoughtful statement. Will he confirm not only that Aldermaston is a GoCo, but that in fact most of the American nuclear programme has historically been run by university-led GoCos? I urge him to look carefully at the issue of military project managers and at the experience from abroad. In land systems, in particular, we can end up with a project manager and an expensive military adviser, rather than one uniformed officer driving it forward. It is worth looking at the Swedish experience, for example, which is of a very effective and tight ship with mostly military project managers.

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Mr Hammond: I hear my hon. Friend’s point but, to be blunt, I think that we have to be realistic about this and acknowledge that military personnel are not necessarily trained to be best equipped to deal with world-class industrial project managers employed on eye-wateringly large salaries by the defence contractors we have to negotiate with. It is to try to allow DE&S to engage with those multinational corporations and world-class project managers on a level playing field that we are considering these changes. There will be a role for the military in this organisation, but it will not generally be as lead project mangers.

On my hon. Friend’s other point, I am grateful to him for drawing the House’s attention to the fact that the majority of the US nuclear programme is in the hands of non-public sector organisations—federally funded research and development corporations—which look very much like GoCos.

John Woodcock (Barrow and Furness) (Lab/Co-op): The strategic defence and security review in October 2010 resulted in a four-year delay to the in-service date for the Vanguard class replacement submarines. It was by no means the first project that has been shifted to the right with increased costs, but it caused particular disappointment because it was done by an Administration who, when in opposition, criticised the former Administration for doing similar things. If a GoCo is in place when such decisions are considered in future, on submarines or anything else, will it be taken out of Ministers’ hands?

Mr Hammond: As I have already said, Ministers will retain the ability to provide strategic direction. If the hon. Gentleman does not mind, I will take no lectures from the Opposition on shifting projects to the right at huge cost, because the previous Government shifted the carrier project two years to the right at a cost of £1.6 billion. What was actually done in 2010, in relation to the submarine enterprise, was a reconfiguration of the programme between the Astute class submarines and work on the Vanguard class replacement submarines, which resulted in a delay to the introduction into service of the Vanguard class, but within the overall constraint that we have in this country of needing to sustain a submarine yard at Barrow, and the minimum level at which we can sustain a submarine yard is building one submarine at a time. However we configure them—Vanguard class first or Astute class first—we have to provide that work flow if we are to keep that sovereign capability. That is the kind of single-source procurement that we are targeting in the announcement I made today on the single-source procurement rules.

Martin Horwood (Cheltenham) (LD): I commend the Secretary of State for getting to grips with defence procurement, which is long overdue, but does he recognise that there is nervousness in some quarters about the complexity of the emerging process, which will involve the MOD, the armed forces, NATO, the private supplier, the GoCo and the independent cost advisory service? Can he give the House any reassurance that new inefficiencies will not creep into the system as a result of that complexity?

Mr Hammond: I will be very frank with the hon. Gentleman: one of the things I have learnt over the past three years is that new inefficiencies creep in all the time

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if one is not continually vigilant. That, incidentally, is why, however much one thinks one has squeezed out all the inefficiencies, when one goes back around the loop and looks again one finds more that were not noticed the last time or that have crept in since. He is absolutely right to say that it is a complex enterprise, but within the overall portfolio of defence transformation—we are carrying out many hugely complex projects simultaneously —it is just one of many, and I am confident that we can manage it.

Dr William McCrea (South Antrim) (DUP): Will the Secretary of State assure the House that the interests of national security and the safety of our armed forces, to whom we owe a great debt of gratitude, as well as value for taxpayers’ money, will be at the heart of the changes in defence procurement? Will he also assure us that all essential defence equipment will be made available to our front-line forces in the defence of the nation?

Mr Hammond: I can of course give the hon. Gentleman that assurance. We are trying to do two things: to ensure that the £160 billion defence equipment and support programme is delivered effectively to our armed forces and that it is delivered efficiently and in a value-for-money way to the taxpayer. In the end, this allows us better, more reliably and more sustainably to support our armed forces while ensuring that this is done in an appropriate way during a period of public financial austerity.

Sir Gerald Howarth (Aldershot) (Con): I was a fan of Mr Bernard Gray’s report in 2009 when I was shadow defence procurement Minister, but I was a bit nervous about his proposals for a GoCo, so I welcome my right hon. Friend’s caution; he has taken the right attitude. Will he set out the mechanism by which he hopes to be able to maintain the crucial industrial capabilities that this nation needs, because that is an extremely important part of his statement? Will he also set out how the new proposals might avoid the mistakes of the £800 million cost overrun on the disastrous Nimrod programme?

Mr Hammond: I am grateful to my hon. Friend. He knows me and he knows that I am a cautious person. This is a big and complicated project, and we are approaching it carefully. We are weighing up the options and taking the appropriate length of time to make the decisions, and I am confident that they will deliver the result that we require. He asks about our national sovereign capabilities. We have set out our approach to the defence industry in the White Paper “National Security Through Technology”. We have also set out today, in this White Paper, the proposed changes to single-source pricing regulation and how we expect to drive greater efficiency into the single-source part of the defence industry that delivers about half our requirements. Only by making those in that sector focus on reducing costs, which they currently have very little incentive to do, will we make them not only efficient providers to us but efficient and competitive players in the international defence export market. That is in the interests of the industry, the UK’s armed forces and UK plc.

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): The Secretary of State referred to the freedom to recruit and reward staff with market rates as, I think,

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a “critical” freedom in the potential move to a GoCo. In that phased transfer, would any increased remuneration in bonus packages still come from the MOD baseline?

Mr Hammond: That depends. We would expect a GoCo contractor to inject a certain number of senior staff who would be part of its package and who would be remunerated through its incentivised fee. Within the overall DE&S work force, getting the right skills in the right places will be part of the task for the management contractor. In some cases, that will mean recruiting at market rates, because at the moment we are haemorrhaging talent. The Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne), has just given me an example where we had nine applicants for 70 commercial posts that have recently been advertised. We have to address the haemorrhage of talent from DE&S by offering market rates if we are to support our armed forces as we need to.

Peter Luff (Mid Worcestershire) (Con): The Secretary of State will understand how pleased I am that he has announced the implementation of the major elements of the report that I commissioned from Lord Currie on single-source pricing regulations—a highly technical but really important subject. On DE&S, does he share my concern that there may be forces even in his own Department, and certainly elsewhere in Government, that may wish to frustrate the progress towards a GoCo? May I encourage him to reassure me that he will work enthusiastically and energetically, notwithstanding his caution, to overcome unreasonable, opportunistic or bureaucratic obstacles put in his way on the path to a GoCo?

Mr Hammond: I am grateful to my hon. Friend and happy to acknowledge the crucial part that he has played in the process that has led us to this announcement. I can safely say that yes, there will always be forces that resist any change that I look to make. We have to carry the case by making the argument, building it during the assessment phase and then presenting the value-for money case for the Go-Co against the DE&S+ benchmark comparator. I am absolutely clear that we have to make that case: there is no pre-judgment that a GoCo is the route we will follow. We have to prove that it provides value for money, and do so to some of the institutionally most sceptical forces—no names, no pack drill—in Government.

Paul Flynn (Newport West) (Lab): Has the Secretary of State noticed the extraordinarily high number of former Ministers, civil servants, admirals and generals who awarded contracts to companies when in office and then ended up working for the self same companies in retirement? Would not it be a good idea to ban these senior people from working in companies to which they have awarded contracts, in order to ensure that contracts are awarded in office on the basis of the needs of the public purse and not on people’s hopes to gain a hacienda in Spain from their retirement earnings?

Mr Hammond: The hon. Gentleman is being a little harsh: most if not all of the elected and appointed people with whom I have come into contact do their very best to deliver in the public interest. We have a rigorous set of rules in place to deal with the cross-boundary

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issues between the public and private sectors. We must never get into a situation where we prevent or discourage all transfer between the public and private sectors. That would be a disaster. We need that flow of lifeblood between the two, but we need it to be done properly: it has to be properly regulated and transparent.

To answer the hon. Gentleman’s specific question, when The Sunday Times published revelations last year about people who had gone from senior military roles into defence industries, I asked the same question as he has and the advice I received was that it would not be lawful to issue an unlimited ban preventing people from taking up one career once they had left another.

Mr Douglas Carswell (Clacton) (Con): For decades, much of the defence budget has been spent in the interests of defence contractors: by constraining the range of suppliers, the seller gets to set the terms of trade. How will these reforms ensure more choice and competition in defence procurement?

Mr Hammond: I am sorry to say that where there is a single supplier or a national security reason for our having to procure in the UK, we cannot magic up a competitive marketplace. What we can do in such circumstances is control the pricing of those contracts. At the moment, under the current regime, profit is clearly controlled but costs are not, and there is no incentive for contractors to control and manage their costs. What we are proposing is a regime where, as now, profit is controlled but where there are clear financial incentives for contractors to control their costs and get them down. By working in this way—by aligning the interests of defence with those of the contractors—we will drive out cost and increase the amount of deliverable military capability to our armed forces.

Katy Clark (North Ayrshire and Arran) (Lab): What implications will this announcement have on complex weapons systems and in particular on establishments such as Defence Munitions Beith in my own constituency, which houses and services such weapons systems?

Mr Hammond: In terms of our procurement of weapons systems and of contractor support for weapons systems, the DE&S will work as the agent of the Secretary of State. I am not sure that I can put my finger on the precise function of the establishment mentioned by the hon. Lady, but we have a separate programme to outsource some of the defence logistics and commodity procurement activities, which I mentioned earlier. None of theses plans will be changed by whether DE&S is run in future as a GoCo or as a fully public sector DE&S+ model.

Mark Menzies (Fylde) (Con): Several thousands of my constituents are employed at BAE Systems in Warton, which is involved in advanced manufacturing of military aircraft. What benefits are they likely to see as a result of today’s announcement?

Mr Hammond: They will see benefits at two levels and a healthier BAES as a result of this announcement. First, large defence contractors, perhaps counter-intuitively, do not relish the lack of a capable interlocutor in their trading partners. They would welcome our beefing up our capability and having higher-skilled, better-paid project managers on our side of the table, because that

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would drive genuine efficiencies into the process. At that level, we know that the companies will welcome this announcement. Secondly, on single-source procurement, I am confident that over time by incentivising cost-efficiency we will increase the exportability of British defence products, which are an incredibly important part of our high-tech manufacturing industries and help us to sustain jobs at the very top of the curve.

Mr John Baron (Basildon and Billericay) (Con): These are early days and final decisions are yet to be made, but what indication can the Secretary of State give about the impact of this announcement on jobs at MOD Abbey Wood? Will he ensure that suitable provisions are in place for the employees who may be affected?

Mr Hammond: As my hon. Friend knows, the TUPE transfer of an enterprise does not imply any reduction in job numbers at the outset. It is true that a private sector partner taking on a work force of this nature will, over time, look to reconfigure the shape of the work force to make the business as efficient as possible. However, it will have to do that within the constraints of the TUPE regulations, normal employment law and the arrangements that are in place for negotiation with the trade unions.

Mr Bernard Jenkin (Harwich and North Essex) (Con): I thank my right hon. Friend for his statement and for the White Paper, which will be of great interest to the Public Administration Committee because it is conducting an inquiry into procurement across Government, including defence procurement. I remain to be convinced that a GoCo is the right idea. If, as he says, the objective is to be able to recruit and reward staff at market rates, why can we not legislate to do that in the Ministry of Defence, instead of contracting it out? After all, is not the acquisition of defence matériel and equipment a core function of the Ministry of Defence? We must have those skills in-house, because we cannot expect to manage them in some arm’s length contractor.

Mr Hammond: My hon. Friend says that he remains to be convinced; I am glad to confirm that I remain to be convinced. It is exactly the point of the assessment phase to convince us collectively that this is the right way to go. This proposal is about being able to employ staff at market rates, but that is only a small part of the total challenge. There are many other cultural and behavioural changes that need to be delivered to make it work. He is right that defence procurement is a core function. That is why we will maintain a competent customer function in the MOD, led by the Chief of Defence Matériel and supported by an external private sector consultant to build the intelligent customer function, to ensure that we are in a robust position to manage the GoCo contractor, if that is the route that we choose, not just now but through future evolutions of the GoCo and future appointments of GoCo contractors.

Jeremy Lefroy (Stafford) (Con): I thank my right hon. Friend for his statement and for the grip that he has on his Department’s budget. Clearly, the first priority of defence procurement is value for money for the taxpayer, but does the procurement system also take into account the export potential of UK-based companies when making its assessments?

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Mr Hammond: I am grateful to my hon. Friend. Export potential is an important consideration and one of the Department’s stated priorities. As I have said, I believe that what we are doing, particularly with regard to the single-source procurement regulations, will drive export competitiveness into defence contractors. If a GoCo is appointed, one of its required tasks will be the support of UK defence exports, which is a UKTI lead.

Jason McCartney (Colne Valley) (Con): What implications, if any, will these long overdue reforms have for small and medium-sized enterprises in my constituency that are already employed in the defence procurement supply chain?

Mr Hammond: We have an active policy of encouraging the engagement of SMEs in the defence supply chain and it includes many thousands of SMEs. The single-source pricing regulations will apply throughout the supply chain, but will have a price threshold. We expect almost all SMEs not to be directly affected because their level of transactions with the MOD will fall below the price threshold. The threshold is yet to be determined, but it is likely to be about £5 million.

Mr Peter Bone (Wellingborough) (Con): I thank the excellent Secretary of State for coming to the House and making this statement. One problem that I have seen with defence procurement is not the way in which equipment has been procured, but the decision by the Ministry of Defence at the beginning of the process to have something more than the standard package. There was the nonsense with the Chinook aircraft, which were bought but never flew because the Department wanted to add to them. Will there be more emphasis on buying standard packages?

Mr Hammond: That depends on what we are buying. Clearly, there are things that we can buy off the shelf or from competitive international providers. We recently ordered the new fleet of MARS—military afloat reach and sustainability—refuelling tankers from a South Korean shipyard. That decision did not go down well with everybody, but it was sensible procurement. At the same time, we have to maintain important capabilities that are essential to our national sovereignty here in the UK. In those cases, we have to support the indigenous industry. One purpose of the changes is to make transparent the costs that are driven into a project by the specification of bespoke requirements and to force the customers to recognise those costs.

James Morris (Halesowen and Rowley Regis) (Con): I welcome the statement, but will the Secretary of State say more about the timescale over which he expects the reforms to deliver tangible savings to the taxpayer?

Mr Hammond: As I said to the shadow Secretary of State, if we went down this route, we would expect to award a contract next year and for it to be effective by the last quarter of 2014. We would then expect there to

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be a two-stage process towards the full GoCo-isation—if I may use that term—of DE&S. We would expect savings and efficiencies to be generated from the very beginning, and from the second year of operation we would expect there to be cashable benefits.

Mr Philip Hollobone (Kettering) (Con): I congratulate my right hon. Friend on his statement. Were he to save the full £1.3 billion to £2.2 billion of waste that he has identified, he would be able to buy an extra one or two Type 45 destroyers a year and to start to rebuild the Royal Navy back to its proper size. Will he confirm that this is the biggest waste black hole in the MOD budget and that no other hole in the budget has a bigger annual cost?

Mr Hammond: It is certainly our assessment that the frictional costs of inefficiencies within defence procurement are the biggest single challenge that we face and our biggest single opportunity. I was at Portsmouth the week before last and talked to the commander of the dockyard. He told me that once the Queen Elizabeth carriers are berthed there, he will be making provision for some 200,000 tonnes of fighting ships to be tied up in the harbour. That will be largest tonnage that he or his predecessors have had to make provision for since the 1960s.

Richard Fuller (Bedford) (Con): I understood from my right hon. Friend’s thoughtful statement that the organisational merits underpinning the GoCo would be cultural change and skills enhancements to deliver efficiencies. Will he tell the House in more detail what missing skills he hopes to attract? Will he also reassure us by saying what steps he will take in the incentives scheme for the management company of the GoCo to avoid the perverse incentives that led to so many financial messes in public-private contracting under the last Government?

Mr Hammond: My hon. Friend is right in setting out the changes that are required. One he did not mention, but which is important, is creating a hard boundary between the customer and the provider organisation. At the moment, responsibilities across that boundary are not as clear cut as they should be, and that allows specification scope to drift on occasions. Let me give him a couple of examples. We currently spend in DE&S £400 million a year on external technical support because we cannot hire the people we need. Being unable to hire somebody at £50,000 a year means that we are paying a contractor £1,000 a day to do the work. We expect the GoCo contractor, if we go down that route, to make substantial early savings by hiring key technical capabilities into the organisation, rather than by bringing them in as technical contractors. He is absolutely right about perverse incentives. Our big challenge now in the assessment phase is to negotiate a set of key performance indicators and incentive payment structures that align a GoCo contractor with the priorities of the Ministry of Defence.

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Points of Order

6 pm

Greg Mulholland (Leeds North West) (LD): On a point of order, Mr Deputy Speaker. I seek your advice on a matter that is of concern to the whole House. On Friday, an e-mail was sent to all MPs by the chief executive officer of Enterprise Inns, Mr Ted Tuppen. He opposes plans, announced by the Department for Business, Innovation and Skills, to introduce the statutory code of practice. In the e-mail, he included something entirely false: he claimed that living accommodation is free to its lessees when in reality, as he knows, a tribunal ruled last year that his company has been invoicing separate amounts for residential accommodation for 20 years in the proportion of 90% commercial, 10% residential. Mr Tuppen has history: in 2008-09, he misled the Business and Enterprise Committee. How do we deal with false and misleading information that is sent to all MPs in an attempt to block legislation?

Mr Deputy Speaker (Mr Lindsay Hoyle): I have certainly got the message. It is not a point of order, but it is on the record so that everybody can be aware of it. Everybody received the e-mail. As somebody who was a member of the Select Committee at that time, I am well aware of the particular individual. Ultimately, it is not a point for the Chair, but at least others can pick up on it.

John Woodcock (Barrow and Furness) (Lab/Co-op): On a point of order, Mr Deputy Speaker. I seek your advice on whether it is in order for the hon. Member for Moray (Angus Robertson) to have received advance notice of the Defence Secretary’s statement.

Mr Deputy Speaker: That is up to the Government, and the hon. Member for Moray represents his party. If the hon. Member for Barrow and Furness (John Woodcock) were to do the audit trail, he will find that that is where it has come from.

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Anti-Social Behaviour, Crime and Policing Bill

[Relevant documents: Twelfth Report of the Home Affairs Committee, Session 2012-13, The draft Anti-social Behaviour Bill: pre-legislative scrutiny, HC 836, and the Government response, Cm 8607; Seventh Report of the Environment, Food and Rural Affairs Committee, Session 2012-13, Dog Control and Welfare, HC 575, and the Government response, HC 1092; First Report of the Environment, Food and Rural Affairs Committee, Draft Dangerous Dogs (Amendment) Bill, HC 95.]

Second Reading

6.2 pm

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

In three years, the Government have made significant strides in cutting crime and reforming the police. Since 2010, crime has fallen by more than 10%. This is in no small measure down to the professionalism and dedication of police officers and police staff working day in, day out to keep our neighbourhoods safe. The reduction in crime has been achieved against the backdrop of a difficult financial climate for the police, as for other public services. We have taken the decisions necessary to restore this country’s long-term economic well-being. We have been able to mitigate the impact of diminished resources because we have allowed officers to focus on their core task of cutting crime. We have thrown off the straitjacket of national targets and freed up the front line from pointless form-filling and needless bureaucracy. Through the introduction of police and crime commissioners, we have revolutionised the accountability of police forces, and they are now far more responsive to local needs and priorities.

In the last Session, we legislated to set up the National Crime Agency which will, from the autumn, lead the fight against serious, organised and complex crime. The College of Policing is already firmly established and is leading the way in ensuring that the police operate to the highest professional standards. We are giving the Independent Police Complaints Commission the capacity it needs to investigate all serious allegations of misconduct. We cannot, however, afford to ease up on our reform programme. We cannot rest while the crime survey shows that there were 8.9 million crimes against adults last year. We cannot rest while businesses were the victims of more than 9 million crimes, or rest when the police recorded approximately 2.3 million incidents of antisocial behaviour, with many more going unreported.

Keith Vaz (Leicester East) (Lab): I, and the Home Affairs Committee, support what the right hon. Lady is doing on the new landscape of policing. She listed a number of the organisations and described how they would fit into the new landscape. Has she made a decision on whether counter-terrorism is to remain with the Metropolitan police, or will it be placed with the new National Crime Agency?

Mrs May: I thank the right hon. Gentleman for his early remarks, and for the work of the Home Affairs Committee in its consideration of the Bill. We value its work. The answer to his question is no. It is still a

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matter for decision. I was clear, at an early stage, that it would not be right to make a decision on where counter-terrorism should sit before the Olympics or before the National Crime Agency was properly up and running. The legislation has now passed and we are working towards the formal and final launch of the NCA later this year.

The Bill marks the next stage of our reform programme to deal with the challenges we face.

Richard Fuller (Bedford) (Con): Before my right hon. Friend moves on, will she take this opportunity to congratulate the retiring chief constable of Bedfordshire, Alfred Hitchcock, who manages one of the smallest forces in the country? Crime rates are down, detection rates are up and our budget has been reduced in line with Government expectations. As he rightly said:

“instead of an 82-page business plan we have a card that explains what we do and why.”

Mrs May: I am grateful—[Interruption.] I suspect there might be one or two more sedentary interventions; it was an interesting moment when I was told that Alfred Hitchcock was in my office at the Home Office waiting to see me. I congratulate retiring Chief Constable Alf Hitchcock on the work he has done in Bedfordshire. I congratulate all police staff who work in Bedfordshire on the impact of their work in ensuring that crime has gone down. We now see a much clearer focus for members of the public on what the police are doing and how they are delivering for my hon. Friend’s constituents and others.

Huw Irranca-Davies (Ogmore) (Lab): I cannot top Alfred Hitchcock, but will the Home Secretary join me in congratulating another eminent campaigner who has welcomed many aspects of the Bill that relate to dog law reform—Mr Dave Joyce of the Communication Workers Union? However, does she share his frustration that it has taken three years since the consultation closed in May 2010? In that time, 9,000 of his postal worker colleagues have been attacked by dogs. When will we see the measures in the Bill implemented?

Mrs May: I note the hon. Gentleman’s remarks, and I also note the efforts of the CWU on this matter. Sadly, in recent years we have seen a number of serious injuries from dogs, not just to postal workers but to other individuals. That is why I am pleased that the Bill contains measures on dangerous dogs. The first stage is for the Bill to be supported in its progress through this House and the other place.

Parts 1 to 5 will ensure that the police, local authorities and others have a comprehensive set of fast, flexible and responsive powers to tackle the scourge of antisocial behaviour. We should not forget that much of what is labelled antisocial behaviour is in fact crime. Even low-level public order offences or criminal damage can be frightening and upsetting for victims, and can blight the appearance of a neighbourhood. If left unchecked, the cumulative impact of even a small number of repeat instances can have devastating consequences.

I would be the first to accept that legislation by and of itself is not the answer to antisocial behaviour. What is needed is for the police, councils, landlords and other

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agencies to work effectively together to address local problems before they get out of hand. In many cases, informal, non-statutory remedies can be used to nip a problem in the bud. There is clearly a need, however, for more formal powers. They need to be fit for purpose, quick and easy to use, effective at changing behaviours and capable of addressing the full spectrum of problems that can afflict communities. That does not describe the powers available under Labour’s legislation.

Miss Anne McIntosh (Thirsk and Malton) (Con): Will my right hon. Friend explain that this is the first opportunity the House has had seriously to consider revising the Dangerous Dogs Act 1991, which was good legislation but has required some revision? For what reason have her Department and the Department for Environment, Food and Rural Affairs drawn back from the full consolidation of the legislation, as possibly initially considered?

Mrs May: Many comments are made about the dangerous dogs legislation and its impact. It is right that we have looked simply at the area where we feel that more legislation is required. This is already a lengthy Bill covering several issues. Rather than trying to consolidate the existing legislation in this Bill, the important issue is filling in the gaps by addressing the powers that still need to be available to people.

The previous antisocial behaviour legislation provided a veritable alphabet soup of powers: the ASBI—antisocial behaviour injunction; the DBO—drinking banning order; the ISO—individual support orders; the DPPO—designated public places order; and of course the ASBO and many more. I am sure that each of the nine major pieces of antisocial behaviour law passed by the previous Administration was enacted with the best of intentions, but that piecemeal approach, with each new Bill responding to the latest manifestation of antisocial behaviour, has left practitioners with 19 separate powers. The result has been not effectiveness but confusion about which of those powers should and could be used in any particular case.

Alok Sharma (Reading West) (Con): I think that the Home Secretary has started to make this point already, but does she agree that what victims of antisocial behaviour want is not a complicated smorgasbord of options open to agencies, but a quick and effective remedy that can make real changes in their local area, which is exactly what the Bill will give us?

Mrs May: I am grateful to my hon. Friend for his remarks. I will come on to explain the various new powers in the Bill, the whole point of which is to provide a remedy that is effective, easier and quicker, enabling us to remedy the problems of antisocial behaviour from which too many of our constituents suffer.

The Bill sweeps away the existing powers and replaces them with a streamlined, flexible framework: just six powers that will equip practitioners with the tools they need to keep their communities safe. The criminal behaviour order and the injunction to prevent nuisance and annoyance will stop antisocial behaviour by individuals and address the underlying causes of their actions. The dispersal power will enable the police to move on groups or individuals causing problems at particular locations.

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The community protection notice, the public spaces protection order and the new closure power will deal with environmental problems or disorderly conduct at particular localities or premises.

Huw Irranca-Davies: Will the Home Secretary give way?

Mrs May: I shall indulge the hon. Gentleman.

Huw Irranca-Davies: The right hon. Lady is indeed indulging me with her generosity. How will she seek to balance the public spaces protection order against the legitimate interest of users of public spaces and rights of way, including the Ramblers Association, which, for understandable reasons, is concerned that it could lead to the blocking off of areas that people have sought access to, legitimately, for many years?

Mrs May: I do not see that being a problem as a result either of the public spaces protection order when dealing with environmental problems in public spaces or of the collection of orders when dealing with people who behave inappropriately in public spaces. This is about ensuring that public spaces are available to people; that they feel able to use those public spaces; and that antisocial behaviour or environmental problems do not prevent it.

Part 5 will strengthen the powers of landlords to evict individuals who blight the lives of their neighbours. These provisions have had the benefit of pre-legislative scrutiny by the Home Affairs Select Committee—as I said earlier, I am grateful to the right hon. Member for Leicester East (Keith Vaz) and his colleagues for their thorough examination of the draft Bill. The evidence they heard reinforces our view that the existing powers are often slow, difficult to deploy and in need of rationalisation. There are those in the Opposition who seek to characterise the provisions in the Bill as a weakening of the powers to tackle antisocial behaviour. Perhaps that is from a sense of parental loyalty to the ASBO, but it is certainly not the result of credible analysis of the reforms we propose.

On examination, it can be seen that in recent years there has been a significant decline in the use of the ASBO. That is essentially because it can take months to secure an order and because, once obtained, over half of all orders are breached. For some, the ASBO became a badge of honour rather than an instrument for changing behaviour, which does not suggest it was an unalloyed success. In contrast, the criminal behaviour order and the new injunction may contain, as well as restrictions, positive requirements to address offending behaviour. As a purely civil order, a part 1 injunction may be granted by a court on the basis of evidence judged to the civil standard of proof, thereby significantly speeding up and simplifying the application process.

Moreover, in the event that either the order or the injunction is breached, both will attract tough penalties—up to and including a custodial sentence. Far from weakening the current powers, we are replacing them with powers that will be speedier to obtain, have a wider reach and, crucially, be more effective in addressing the underlying problems.

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Dr Julian Huppert (Cambridge) (LD): The Home Secretary is right that ASBOs did not have the desired effect, but I am concerned about clause 17 on naming and shaming children and young people involved in such behaviour. Will she confirm that the Government’s intention is that young people should be named—in breach of the normal principles—only where absolutely necessary and that it will not become a routine step?

Mrs May: We think it is right that the power should be available, but of course we would expect it to be used proportionately. We would expect the courts to adopt such an approach.

Part 6 provides for the community remedy and community trigger, which will put victims at the heart of the response to low-level crime and antisocial behaviour. The community remedy will give victims a powerful voice in determining the appropriate punishment to be attached to an out-of-court disposal. The community trigger will ensure an effective power to compel local agencies to review their response to repeated instances of antisocial behaviour. The public have a right to expect an appropriate and proportionate response to each reported incident.

Yvette Cooper (Normanton, Pontefract and Castleford) (Lab): Will the Home Secretary confirm that in the areas where the community trigger was piloted there were 44,000 incidents of antisocial behaviour, but that the trigger was successfully activated only 13 times? Does she regard that as a success for the pilots?

Mrs May: The whole point about our approach is that we expect the police and other relevant agencies to act when an instance of antisocial behaviour is reported to them. As I am sure hon. Members across the House will have experienced, all too often several instances will be reported without any action appearing to be taken. The community trigger will ensure that a community can get a response. I would hope and expect that the community trigger was not necessary in many instances, because the police and other agencies had reacted to the first report, rather than waiting for several.

Yvette Cooper: If the Home Secretary is right that the trigger will guarantee a more rapid response, why does the Bill say it will happen only when there have been at least three complaints, which means that there could be five, 10 or as many as the local police and crime commissioner and council decide?

Mrs May: The reason is simple: the Government believe in local discretion in some areas. There is a fundamental difference between the Government and the Opposition over the ability of local areas and police and crime commissioners to be involved in determining what is right for their circumstances and local area. As the right hon. Lady says, we have put a figure in the Bill to indicate when we think a trigger would be appropriate, but it would then be down to the local area to determine. For some time, the Opposition have been saying that the fact that there have not been many instances of community triggers is somehow a failure. Actually, we want antisocial behaviour dealt with on the first report, rather than people waiting and feeling that they have to use the community trigger.

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Nick de Bois (Enfield North) (Con): Does my right hon. Friend accept that in some instances severe antisocial behaviour leads almost to a fear of reporting incidents, and will she therefore welcome the idea that councillors, MPs and third parties may implement the trigger under those circumstances?

Mrs May: I understand the point my hon. Friend is making. The point about the community trigger is that it is not just about the individual on the receiving end of antisocial behaviour. It is called the community trigger precisely because others in the community may be able to exercise it, as opposed to the individual who has been subjected to such behaviour.

Where local agencies respond effectively, few victims would need to resort to using the trigger, so it was not surprising that the recent pilots showed relatively few people taking advantage of it. When agencies fail to act, it should be possible for persistent antisocial behaviour to be dealt with and for a response to be required from the relevant agencies. That is real empowerment for victims and contrasts with the Labour party’s proposal of a 24-hour guarantee, which in practice may amount to no more than an e-mail acknowledging a complaint. The arrival of an e-mail telling someone that their complaint has been logged is of little comfort, and still less use to anyone suffering from a failure to do anything about the antisocial behaviour that is blighting their lives.

For many, owning a dog will be a source of companionship and, in the case of working dogs, valued support and assistance. However, where owners do not take responsibility for their dogs—by failing to clear up after them or to ensure they are properly trained and socialised—those dogs can become a menace, spoiling local amenities and putting people at risk of harm. The Bill tackles irresponsible dog owners in two ways. First, it strengthens the provisions in the Dangerous Dogs Act 1991, to which hon. Members have referred. In particular, we are extending the offence of having a dog that is dangerously out of control in a public place to cover all places. That will mean that the police can take action when a person is attacked by a dog in the home. The Bill also provides that an attack on an assistance dog is an aggravated offence under the 1991 Act.

Secondly, through the new flexible powers to tackle antisocial behaviour, the police and local authorities will be able to take preventive measures to tackle specific local issues. My hon. Friends the Members for Thirsk and Malton (Miss McIntosh) and for Ealing Central and Acton (Angie Bray), as well as other hon. Members, have argued for a bespoke “dog control notice”, but such an approach would once again lead us down the road of having a plethora of narrowly focused, inflexible powers to deal with particular problems. Although the provisions in parts 1 to 4 of the Bill do not provide for dog control notices in name, they provide for them in substance. For example, it would be open to the police or local council to issue a community protection notice against the owner of an aggressive dog. Such a notice could include a requirement to attend training classes, and keep the dog muzzled and on a lead in a public place. Alternatively, a public spaces protection order could prohibit all dogs from a particular locality, such as a children’s play area. Given the ability to use such powers to target specific dog-related issues, I hope the House will accept that there is simply no need for a separate dog control notice.

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Miss McIntosh: When we were in opposition there was a clear understanding that antisocial behaviour orders were not up to the job, as my right hon. Friend has said. So that the House can have a clear understanding, can she explain the difference between dog control notices, which seem to operate so effectively in Scotland, and the notices that form part of this Bill?

Mrs May: What I am trying to explain to the House is that the new orders and powers we are introducing in this legislation will make it possible to take the sort of effective action that can be taken under a dog control notice, albeit without having to introduce something that is specifically called a dog control notice, with limits around that. The flexibility will be there because we are introducing wider powers, but they can be used to address the specific issue of dangerous dogs and their behaviour.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I thank the Home Secretary for kindly giving way. I share the sentiment expressed by many Members, including the Chair of the Select Committee on Environment, Food and Rural Affairs, that the proposals in the Bill are woefully inadequate. On prevention, can the Home Secretary share with the House why the police do not support the proposals in the Bill?

Mrs May: I do not believe that the proposal to extend the offence of having a dog that is dangerously out of control from public spaces to all places, so that it covers private places as well, or that ensuring that it is possible under the new flexible powers for preventive action to be taken—I have given some examples—is, as the hon. Lady describes, “woefully inadequate”. What we are doing in this Bill is setting out a set of clear, flexible arrangements that can be used to ensure the sort of control of dogs that, I am sure, not just she, but other Members of this House wish to see.

Julie Hilling (Bolton West) (Lab): I thank the Home Secretary for giving way yet again. My question is about resourcing for such orders. If the control of dogs is simply subsumed into a raft of antisocial behaviour issues, how will she ensure that it has the priority it needs, with 210,000 or more attacks taking place each year?

Mrs May: I realise that the hon. Lady had a very sad case in her constituency in relation to dogs acting in a private place, and there have sadly been a number of other such cases. The Government have responded by introducing this new power, but dealing with the issue will come down to decisions that will be taken at a local level. Decisions will be taken by the police, local authorities and the agencies working together when the problem of a dangerous dog has been identified. The point about these powers is that they are sufficiently flexible to enable people to take a decision about what will work and what action needs to be taken in a particular circumstance. The fact that we have not attached the words “dog control” to the powers in the Bill does not mean that they will not be there. I believe they will be.

Part 8 targets the middlemen responsible for supplying illegal firearms to street gangs and organised crime groups. Thankfully, firearms offences are relatively rare, but the police still recorded more than 5,000 of them

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in 2012. We need to target those who, through their callous disregard for the lives of others, hire out guns as if they were just another tool. The Bill will accordingly introduce a new offence of possession of a firearm for sale or transfer. That offence, together with the existing offences dealing with illegal importation, exportation and manufacture, will be subject to a maximum sentence of life imprisonment. The Select Committee on Home Affairs has addressed this issue in the past. Under the arrangements we are introducing in the Bill, those who supply illegal weapons will be dealt with. Morally, they are every bit as culpable as those who pull the trigger, and they should therefore face the same penalties.

Part 9 deals with one of the manifestations of modern-day slavery: forced marriage. This country is a world leader in tackling this horrendous practice, including through the exemplary work of the forced marriage unit and a number of charities working in this field. The introduction of the civil forced marriage protection order has afforded some protection to victims and potential victims, but people who seek to consign their victims to a life of miserable servitude should face the full rigour of the criminal law. The new offences of forced marriage and of breach of a protection order will act as a deterrent and ensure that those found guilty of such practices face fitting punishment.

Alok Sharma: Does my right hon. Friend agree that it is incredibly important for the wider public—and, indeed, everyone in this House—to understand that there is a clear difference between an arranged marriage, where there is consent on the part of both parties, and a forced marriage, which is wrong on every level? It is absolutely right that the Bill includes proposals to deal with that.

Mrs May: My hon. Friend makes an important and valid point. All of us who talk about this issue should be clear about the difference and careful in the language we use. As he says, there is a real difference between an arranged marriage, where there has been consent, and a forced marriage, where there has not.

Part 10 contains a number of important policing reforms. First, it transfers to the College of Policing key statutory functions that are commensurate with, and appropriate to, its role in setting standards in policing. It will fall to the college to determine such matters as the qualifications for the appointment and promotion of police officers, and to issue codes of practice. In the longer term, we are continuing to explore how best to enshrine the college’s independence in law. This is properly a matter for debate in the context of the Bill, and I have no doubt it will be the subject of further discussion in Committee.

Keith Vaz: I am most grateful to the Home Secretary for giving way a second time. Is she as concerned as I am that the cost of a certificate in knowledge of policing will be £1,000? Does she think that will have an impact on her desire, and that of the whole House, to increase diversity in policing?

Mrs May: The right hon. Gentleman has cited a figure concerning the work being done by the College of Policing, but it is for the college to determine what requirements it will put in place for individuals regarding their initial ability to operate as a police officer, and the

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development they need to undertake as they progress through the ranks and acquire the necessary skills. It will be for the college to look carefully at the balance that will need to be struck to ensure that people can undertake that training and not be put off doing so. I believe that the College of Policing represents an important development in the policing landscape. As well as setting standards for training, development and skills, it will be a body in which best practice can be shared between police forces. That will have an impact on the ability of the police to fight crime.

On police reform, this part of the Bill will further strengthen the capability of the Independent Police Complaints Commission. I have already mentioned that we will build up the commission’s capacity by transferring resources from forces’ professional standards departments, but we also need to ensure that the IPCC has the appropriate remit and powers to operate effectively. Critically, the Bill will ensure that the IPCC has oversight of complaints made against those who are contracted to provide front-line services on behalf of the police.

Nicola Blackwood (Oxford West and Abingdon) (Con): I very much welcome the extension of the IPCC’s powers to include private contractors. That will become increasingly important, but will that increase in powers include an ability to interview such contractors under caution?

Mrs May: I will need to come back to my hon. Friend on that point. I do not think that we go into quite that issue in the Bill. The Bill will give the IPCC the powers, but there will obviously be subsidiary ways of operating in relation to this. I will look into the point for her. That is me standing here at the Front Bench and being honest!

This part of the Bill will also require forces, police and crime commissioners and others to respond promptly and publicly to IPCC recommendations. Also, as recommended by Tom Winsor, we shall replace the existing cumbersome and ineffective police negotiating machinery. The new police remuneration review body will help to ensure that we can deliver pay and conditions that are fair to police officers and to the taxpayer.

We are also building on the role of police and crime commissioners as local victims’ champions by conferring on them new powers to commission victims’ services. PCCs are best placed to determine the needs of victims in their communities, and they should be empowered to provide the appropriate support. Finally in this part of the Bill, we will continue the work that we started in the Protection of Freedoms Act 2012 to ensure that counter-terrorism powers protect the public, but that they do so in a fair and proportionate manner. As David Anderson, the independent reviewer of terrorist legislation, has reaffirmed, the port and border security powers in the Terrorism Act 2000 are

“an essential tool in the protection of the inhabitants of this country from terrorism”.

Reducing the maximum period of detention from nine to six hours and providing for persons detained at ports to have access to legal advice will ensure that these powers can continue to be exercised proportionately.

We have long needed to make changes to the Extradition Act 2003 in order to make it operate in a fairer and more efficient fashion. Part 11 of the Bill introduces a number of such changes. They are in line with

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recommendations made in Sir Scott Baker’s independent review of our extradition arrangements and build on the introduction of a forum bar to extradition, which we enacted in the last Session. Among other things, the Bill addresses the current unfairness that can arise from the strict operation of the time limits for serving an appeal against extradition.

The Baker review also confirmed that some of the concerns that have been expressed, including by a number of my hon. Friends, about the proportionality of the European arrest warrant were well founded. As the House will know, this is one of the pre-Lisbon policing and criminal justice measures that we are examining to determine whether it is in the best interests of the British people to continue to be a party to the current arrangements. I hope to make a statement to the House soon about the conclusions of that review and the 2014 decision.

Yvette Cooper: Will the Home Secretary confirm that about 900 suspected foreign criminals were deported under the European arrest warrant last year? Does she not think that quite a good thing?

Mrs May: It is important that we have the powers that we need to deal with criminality. I am on record as saying that we need to see the deportation and extradition of foreign criminals, but it is also right for the Government —and, in due course, this House—to look at whether the current arrangements are appropriate. Concerns have been raised, not only by Members of Parliament but by Sir Scott Baker, about a number of issues relating to the European arrest warrant, and it is absolutely right that the Government should look at them.

Finally, I want to draw the House’s attention to a couple of the provisions in part 12 of the Bill. One way in which we can free up resources is by increasing the number of police-led prosecutions. Having to pass low-level offences to the Crown Prosecution Service wastes police time. The police already deal with more than 500,000 cases a year in which people plead guilty. Under the provisions in this part, up to a further 50,000 prosecutions for low-level shoplifting offences will be able to be handled by the police, empowering front-line officers and bringing swifter justice for retailers.

In this part of the Bill, we have also clarified the test for determining eligibility for compensation when someone has been the victim of a miscarriage of justice. The absence of a clear statutory definition of what amounts to a miscarriage of justice for these purposes has led to repeated legal challenges and shifting case law. As well as providing greater certainty, the new statutory test will ensure that compensation is paid only to those who are clearly innocent.

Since the day I was appointed Home Secretary, I have had one simple priority for the police: to cut crime. The Bill will help to ensure that the police, working in partnership with others and focusing on the rights of victims and communities, can continue to do precisely that. I commend the Bill to the House.

6.36 pm

Yvette Cooper (Normanton, Pontefract and Castleford) (Lab): We have another parliamentary Session and another Home Office Christmas tree Bill. Last year’s Bill had a

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bit of crime, a bit of judicial reform, a bit of extradition and a bit of drugs. This year’s has a bit on police standards, a bit on guns and a bit on dogs, but in none of those areas does it go far enough. The Christmas tree decorations cannot hide the fact that the Bill is weak on tackling antisocial behaviour, at a time when the Office for National Statistics shows concern among the public that antisocial behaviour is going up.

There are areas of the Bill that we will support, as well as areas in which we want the Government to go further. We called for the Independent Police Complaints Commission to cover private companies, and we are glad that those provisions are in the Bill. We support the measures relating to the College of Policing, too, although we believe that the Government should go further on police standards. We agree with the Home Affairs Select Committee that new firearms offences are needed for possession of firearms with intent to supply, and we are glad that they are in the Bill.

We agree that forced marriage should never be tolerated. It is a terrible violation and can destroy people’s lives. The law should be strengthened to build on the work done to stop forced marriage, although the Government need to work with experts to get the detail right and also to ensure that cuts to refuges or to legal aid do not undermine the support that victims need in practice.

The central claim for the Bill, as we can see from its title, is that it will tackle antisocial behaviour, and here there are many false promises. Three years ago, the Home Secretary said that she was determined to take action on antisocial behaviour, yet the figures from the Office for National Statistics show that eight out of 10 people say antisocial behaviour is going up, that nearly half say it is going up a lot, and that only one in 10 say it is going down in their area.

So what have the Government done to help? They have cut the community safety funding by nearly two thirds, even though those are the funds that help communities to pay for extra police community support officers, for youth activities, for action against gangs, for extra street lighting and for CCTV. This is the crime prevention investment that helps to save money and police time later on, yet the Government have cut it severely. They have cut it not just by 20% in line with police cuts, or even by 23% in line with the Home Office budget, but by over 60%.

This is all happening at a time when the Government are cutting 15,000 police officers, including more than 7,000 from the most visible units of all. The Home Secretary claimed earlier, in Home Office questions, that a higher proportion of police officers were now on the front line. However, a slightly higher proportion of a much lower number still means fewer police officers, and the proportion who are visible has gone down from 12.3% to 11.8%. The Government are not just cutting police numbers; they are making things harder for them, too.

Alok Sharma: I thank the right hon. Lady for giving way, but I really wish she would not keep undermining the police force, which is doing a fantastic job. In the Thames valley, we have had crime down and detection rates up year after year. Why can she not just acknowledge that we have police forces that are doing a great job in some difficult circumstances?

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Yvette Cooper: Police officers certainly are working extremely hard in very difficult circumstances. Many of them are finding themselves stretched in very different directions. Chief constables are also working immensely hard to keep their area safe and to reduce crime. However, we need to recognise that at the same time as 15,000 police officers are being cut from the force, we are seeing 30,000 fewer crimes being solved and a big increase in the use of community resolutions for serious and violent crimes. I have to tell the hon. Gentleman that I find that to be a matter of serious concern. It is important to get justice for victims, and that is being put at risk by the Government’s approach.

Dr Huppert: It is always very tempting to offer to spend more money to fix all sorts of problems. Is the right hon. Lady making a commitment that the Labour party would spend a huge amount more money on the police, and where would that cash come from?

Yvette Cooper: We have said very clearly that we would have reduced the policing budget by around 12% rather than 20% over the course of the current spending review. That would not have led to the reduction of 15,000 police officers over the course of this Parliament. I would also say to the hon. Gentleman that he promised to increase the number of police officers by 3,000—it was in his party’s manifesto. That is what he called for, and he has done the absolute opposite. Government Members have not only reduced police officers on the street; they are making it more difficult for them to fight crime.

Robert Flello (Stoke-on-Trent South) (Lab): On that point, when I talk to police officers in Stoke-on-Trent, who are doing a fine job in extremely difficult circumstances because of all the cuts, and not just to their positions—[Interruption.] I wish the Minister of State, Home Department, the hon. Member for Taunton Deane (Mr Browne) would stop chuntering while I am trying to ask a question. Police officers already find themselves in difficult circumstances, yet they also tell me that the toolkit of the various powers available to them is being reduced at the same time. How can that help?

Yvette Cooper: My hon. Friend makes an important point. Looked at across the board—whether it be what is happening with DNA or CCTV—Government Members are making it harder for the police to do their job.

After the London riots, CCTV helped to secure huge numbers of convictions. We all know from our constituencies of communities and estates that have worked hard to get CCTV and how it has helped to provide security in those areas, cutting down on antisocial behaviour and abuse. Yet the freedom of information requests put in by my hon. Friend the Member for Ashfield (Gloria De Piero) have shown that one in five councils is now cutting CCTV under a Home Secretary who is wrapping CCTV in a whole load of new red tape. There are already safeguards for residents’ privacy, but the Home Secretary wants a whole load of extra checks, rules and administration just to make sure. The impact assessment produced by the Home Office has found that these new regulations will cost the police and councils £14 million to comply with—and it could be as much as £30 million at a time when resources are so stretched. The Home Secretary, who has already wasted £100 million

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on the November police and crime commissioner elections now wants to waste up to £30 million making it harder, not easier, to get CCTV. The Home Secretary welcomed extra CCTV in her own constituency three years ago; she should stop making it harder for everyone else to get it.

Luciana Berger: Does my right hon. Friend share my pride in the fact that City Watch in Liverpool does such a formidable job with its extensive CCTV network, which is visited by people from not only other cities across the UK, but from across Europe because it is so advanced? It has managed to prosecute people successfully for the crimes that they have committed. Would it not be a shame if other cities and places across the UK could not benefit in the same way as the people of Liverpool have, making ours one of the safest cities in the country?

Yvette Cooper: My hon. Friend is right. We have seen the impact in a whole series of areas—as I said, during the London riots, for example. In fact, at the time of the riots, the Prime Minister said of CCTV:

“We are making technology work for us…And as I said yesterday, no phoney human rights concerns about publishing photographs will get in the way of bringing these criminals to justice.”

It would seem, however, that the Home Secretary is tying herself up in exactly those so-called “phoney human rights concerns” that she has pledged to abolish.

This Bill will not make it easier to tackle antisocial behaviour. The Government are indeed making changes to powers: antisocial behaviour injunctions will be replaced with crime prevention injunctions; public space orders will be replaced with public space protection orders; acceptable behaviour agreements will be replaced with acceptable behaviour contracts; premises closure notices will be replaced by closure notices; and noise abatement notices will be replaced by community protection notices. No set of powers will be perfect, and everyone wants to make sure that the system is as swift and easy to use as possible. The trouble is that the Bill will not achieve that. There is a lot of changing of names and a lot of tinkering at the margins. Some changes may help and make it simpler; others may make it harder while agencies work out how the new processes are supposed to work.

Housing associations, for example, have warned that it will take five years to develop the case law for the new powers to work. The Government’s own figures admit that it will require at least 150,000 hours of police training to use these powers, even though many of them are remarkably similar to the old powers they replaced. The fact is that communities, councils, housing associations, the police and the courts need a wide range of tools to deal with very different problems. The risk for the Home Secretary is that, by trying to squeeze a wide range of problems into a narrow number of powers, she may make it harder to achieve that.

On the one hand, many organisations have written to The Times today to say that they fear this will mean too heavy-handed treatment for the lowest level of antisocial behaviour or nuisance, while on the other hand police officers have raised with me their concern that the powers will not be strong enough to deal with the worst problems. The one-size-fits-all approach has risks.

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We need early intervention. We do not want to see young people unnecessarily criminalised or dragged through the courts for low-level problems when it can be sorted out on the spot. We do want to know that persistent, aggressive antisocial behaviour that can terrorise neighbours or residents will be dealt with properly, including by criminal sanctions where needed. Yes, we should have community resolutions and remedies for antisocial behaviour, but they must not be abused.

We know that community resolutions are now being used for serious and violent crimes, including for domestic violence. Last year, community resolutions were used for 33,000 serious and violent crimes, including in 2,500 domestic violence cases, where the Association of Chief Police Officers was clear that they should not be used.

Alok Sharma: The right hon. Lady is talking about the views of the police, so let me quote what ACPO said:

“In broad terms the proposals contained within the draft bill are practical, positive, reasonable and balanced.”

What is there not to like?

Yvette Cooper: I have to tell the hon. Gentleman that ACPO, like chief constables across the country, will make the best of the approach put to them, but many practitioners across the country have raised the concern that, with changing case law, it will take some time to be able to use the powers as effectively as the previous powers were used.

The Bill does nothing to make sure that community remedies and resolutions are focused on low-level crime. It does nothing to ensure that proper restorative justice, putting victims at the heart of the process, will be pursued or guaranteed. Instead, it risks creating loopholes to let offenders off because overstretched councils and police have not had the resources to sort the problem out.

Robert Flello: Does it not send a worrying message to the families of the, on average, two women who die every single week as a result of domestic homicide when 2,500 cases of domestic violence will be treated in this way? Does that not somehow suggest that their loved ones do not count? What sort of message does that send?

Yvette Cooper: My hon. Friend makes an important point. Community resolutions and the purpose of the restorative justice approach, which can be valuable in dealing with antisocial behaviour, are about getting offenders to say sorry to the victims and make it up to them. Yet that is exactly what we do not want in domestic violence cases. We do not want a police-sanctioned process of the perpetrator somehow apologising and making it up to the victim, who will then be expected to accept and go along with the apology, as if that makes it all right. Community resolutions should not be used for domestic violence cases. It is still a serious matter of concern that they continue to be used, despite ACPO’s guidance to the contrary. This is an area where the Home Office needs to step in and make sure that stronger guidance is sent out to chief constables and police forces across the country to make it very clear that community resolutions should not be used for domestic violence.

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There are many cases in which ASBOs are not appropriate, but it must also be said that in some of the most serious examples of repeated abuse, they have made a significant difference. For example, an aggressive thug who had repeatedly intimidated residents and shopkeepers in a town centre, had repeatedly ignored warnings from the police and the courts, and had breached his ASBO was taken to the criminal courts and given a custodial sentence, but under the new system he would only be served with an injunction. The council would have to pursue expensive civil action to enforce the injunction, and there would be no criminal offence.

Nor will the community trigger solve the problem. The Home Secretary has made the grand promise that

“The trigger will give victims and communities the right to demand that agencies who had ignored a problem must take action.”

However, the trigger is not strong enough to help. For a start—as I pointed out to the Home Secretary earlier—although the Bill specifies that there must have been “at least three…complaints”, the number could be far higher. Police and crime commissioners could decide on five, 10 or 20. The Home Secretary said that it would be a matter for local discretion, but that local discretion already exists. If it were simply a matter for local discretion, she would allow people to choose to set up community triggers, and she would not be legislating. Either she thinks that this is a matter for local discretion and it is up to those people to decide, or she thinks that there should be minimum standards, but something as weak and wishy-washy as “at least three…complaints” is not really a minimum standard at all. This is a con. Even if the magic threshold is passed, what are residents entitled to? A review. How reassuring.

In the five areas that have piloted the community trigger, where there have been 44,000 incidents of antisocial behaviour, the trigger has been successfully activated 13 times—in response to not just less than 1% of complaints, not just less than 0.1%, but 0.03%. This measure will not have a big impact on the antisocial behaviour problems that persist in communities throughout the country.

When the Home Secretary made her speech on antisocial behaviour three years ago, she said:

“The solution to your community’s problems will not come from officials sitting in the Home Office working on the latest national action plan.”

That is certainly true. If the Bill is the nearest that the Home Office gets to its latest national action plan, it will make it harder, not easier, to solve community problems.

There are two respects in which the Bill has missed the opportunity to deal with some serious problems, and I urge Ministers to look at those again. The first is the problem of dangerous dogs, a subject on which a series of interventions were made on the Home Secretary’s speech. We support the measures that will extend the law to private property, but that is not enough. As the Home Secretary will know, the number of attacks has been rising, and there have been tragic fatal attacks. In the last two years, we have seen killings such as those of 18-month-old Zumer Ahmed and 71-year-old Gloria Knowles, who was mauled by dogs. Last week I met the family of 14-year-old Jade Anderson, who was tragically

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killed in an attack by dangerous dogs. I pay tribute to Jade’s family, who are campaigning for the strengthening of the law.

The Environment, Food and Rural Affairs Committee, a number of charities, and the families of victims killed in dangerous dog attacks want dog control notices to be introduced. I listened carefully to what the Home Secretary said, but the problem is that experts have not been convinced by her argument that wider powers can be used, and that it will not take long to build up case law and make it easy for those powers to be applied. Of course dog control notices will not stop every attack, but they could make it easier for earlier preventive action to be taken. They are working in Scotland, and I urge the Home Secretary to consider the issue again during the Bill’s passage.

I hope that the Home Secretary will think again about firearms as well. As she will know, last year Susan McGoldrick, her sister Alison Turnbull and her niece Tanya were murdered by Susan’s partner, Michael Atherton, with a shotgun that he was licensed to own. Michael Atherton had a history of violence and abuse towards Susan McGoldrick, and he should never have been allowed to own a gun. Alison’s son, Bobby Tumbull, is campaigning for a change in the law.

The Home Office has rightly strengthened the guidance for gun applications, but it does not go far enough. It relies on interviews with family members who may still be living in fear of abuse. Why should anyone with a history of domestic violence be allowed to own a gun? Why should that guidance not be underpinned by legislation? We cannot legislate in Parliament to prevent every tragedy or every terrible crime, but we can seek to learn lessons when tragedies happen. We can listen to victims and their families, and we can work with them to make things safer in future.

We will not vote against the Bill’s Second Reading, but we think that it needs to be stronger. People want stronger action against antisocial behaviour, rather than the watering down of powers. They want more protection for victims, not just delayed reviews and loopholes for offenders if police resources are tight. They want more action against domestic violence, and more action against dangerous dogs. That requires more action from the Home Office, and more action from the Home Secretary. They need to do more to support communities, and they should do so in this Bill.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. May I suggest that Back Benchers speak for about 12 minutes? I do not intend to enforce that limit, but I am sure that we can manage between us.

6.55 pm

Kris Hopkins (Keighley) (Con): I welcome the Bill, and congratulate the Home Secretary on her introduction of it.

Let me begin by making a comment about the issue of forced marriage, which was raised by my hon. Friend the Member for Reading West (Alok Sharma). My constituency contains a large Kashmiri Muslim community, and I believe that we should not tolerate forced marriages.

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It is important to separate that issue from the issue of arranged marriages, a process in which people should be supported.

Today, as Members will know, the Home Affairs Committee published a report on the sexual exploitation of children, including street grooming. The Committee’s Chairman, the right hon. Member for Leicester East (Keith Vaz), said, in what I consider to have been very carefully chosen words,

“Children only have one chance at childhood, once that childhood is stolen by the horrific crime of sexual exploitation, it cannot be returned. Protection of these vulnerable children must be our first priority.”

I am extremely grateful for that timely report, because it puts into context an issue that I believe the Bill can begin to address.

In March this year, Shazad Rehman and Bilal Hussain were imprisoned for a total of 36 years for drugging and raping schoolgirls whom they had picked up on the streets of Keighley. The two men committed some of their hideous offences, unchallenged, in local hotels. More recently, in May, seven men were found guilty at the Old Bailey of 43 charges relating to six victims aged between 11 and 15. The men plied their victims with drink and class A drugs, took them to guesthouses and bed-and-breakfast establishments, and—again, unchallenged —raped and tortured those children.

Nicola Blackwood: As my hon. Friend will know, during the grooming inquiry the Home Affairs Committee has heard some harrowing evidence of incidents such as those that he has described. In Oxford, we have found it very difficult to come to terms with the fact that such horrific crimes can happen in our own community. Does my hon. Friend agree that it is time for every area in the United Kingdom to accept that it is not immune from child sexual exploitation, and to ensure that it protects vulnerable children and prosecutes any criminals who seek to target those young children?

Kris Hopkins: I entirely agree. I know from my hon. Friend’s work on the Committee, and from the terrible issues that she has had to face in her constituency, that she understands the situation that confronts many communities.

The investigation to which I referred, and the Keighley conviction, mirrored investigations in Rochdale, Derby and Telford, in that hotels and bed-and-breakfast establishments enabled the crime to be committed.

Since the briefing given to me by police officers in Keighley, Detective Chief Inspector Darren Minton from the Bradford safeguarding unit has contacted the police forces of North Yorkshire, South Yorkshire, the Met police, Lancashire, Greater Manchester and Thames Valley. All have, or have had, numerous or significant numbers of child sexual exploitation cases in which hotels, bed and breakfasts and guest houses have been used.

With the support of my local police officers, who are on the front line trying to tackle these criminals and attempting to protect these children, I am asking the Home Office to consider introducing in the Bill, first, a new police power to require specific hotels or B and Bs to collect the details of identity and proof of relationship of any persons under the age of 18 who book into the accommodation. Secondly, that information should be immediately passed on to the police. The premises

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would be identified by past intelligence or conviction, or present intelligence or investigation. Authorisation would be given by a county court judge in chambers. It would not be a blanket request—it would be about specific accommodation based on knowledge.

Nicola Blackwood: My hon. Friend is being incredibly generous in giving way again. I strongly endorse his proposals. He will be aware that the Home Affairs Committee report found that there was one particular problem which meant that victims fell through the cracks: the failure to share data. The proposal to ensure, wherever we can, that data are shared effectively so that victims do not fall through the cracks should be considered and implemented as soon as possible.

Kris Hopkins: I thank my hon. Friend for her comments. I have asked my local police officers whether there are any laws or measures in place that could be used to do what I have proposed. They do not believe that there are such powers in place. However, I am willing to be—

Mrs May: My hon. Friend is making a powerful contribution. Certainly I am happy for the Home Office to take away his proposal and consider it seriously. We will come back to him on the matter, but he has made an important point about the relevance of those places to what is happening in terms of child sexual exploitation. We are happy to look at his proposal.

Kris Hopkins: To that end, I am grateful for the opportunity to speak and I look forward to working with the Home Office on the issue.

7.2 pm

Keith Vaz (Leicester East) (Lab): It is a pleasure to follow the hon. Member for Keighley (Kris Hopkins) in this important debate. I thank him for his kind comments about the Home Affairs Committee’s report on child grooming, which was published this morning. I pay tribute to all members of the Committee, who have worked so hard on the report, especially the hon. Member for Oxford West and Abingdon (Nicola Blackwood), who originally suggested that the Committee conduct the inquiry and who has been so assiduous in helping us to determine which witnesses should give evidence and in preparing the final report. It would not have been as powerful or important had it not been for what she has done.

I, too, am very interested in the hon. Gentleman’s proposals. He is right that this is one of the areas we have looked at. At the moment, the anecdotal evidence and the evidence of people who see with their own eyes that there is a problem are not sufficient to catch the terrible perpetrators of these horrific crimes. If we had legislation, that would help the situation enormously.

I am glad that there is agreement between the Front-Bench teams that there will be no vote on this measure. I agree that it is an important measure, but I also agree with the shadow Home Secretary that there are ways we can improve the Bill. It is important when we have such Bills that we use the Committee stage to do that. That will help to make it an even stronger and more powerful Bill.

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I am glad that the Select Committee had the opportunity to scrutinise the draft Anti-social Behaviour Bill in a number of sessions. That happened not only because that was the decision of the Select Committee but because of the case of Fiona Pilkington, who committed suicide in October 2007 with her daughter after suffering years of abuse from local youths. The Independent Police Complaints Commission found in May 2011 that she had contacted the police 33 times in seven years. They failed to act accordingly and, as a result, she committed suicide with her daughter. I am glad that the new Leicester chief constable has changed things. Simon Cole has made this one of his priorities and we have accepted his assurance that that kind of situation will never happen again. Obviously, if we pass the Bill, that assurance will be even stronger.

Sadly, however, even though we had the case of Fiona Pilkington, four years later we had the inquest into the death of Dr Suzanne Dow, a lecturer in French at Nottingham university, who killed herself in 2011 after suffering antisocial behaviour from the crack house next door to her. The council ignored her pleas for over a year.

In January, the Select Committee recommended that there should be a national backstop of three complaints to set off the community trigger. We believe that that would guard against people such as Fiona Pilkington slipping through the net. Of course the Home Secretary is right: we also have to have a degree of local accountability. That has been one of the great features of her term as Home Secretary: she sets guidelines and a vision, and then she leaves it very much up to local people to complete the vision. She has done that with police and crime commissioners, to which I will come later. However, we believe strongly that, unless we have a national backstop, a figure that everyone could sign up to, there is a risk that locally people could make their own decisions, and we would end up with the trigger not being as great in Devon and Cornwall as it was in Somerset, Leicestershire and Derbyshire. That is why we felt that the trigger was important. I hope that, as it scrutinises the Bill, the Committee will look seriously at the Select Committee’s proposals. I am convinced that they will strengthen the Bill. That was the unanimous view of the Select Committee.

We should also, in looking at the Bill, express our concern about the cuts to youth services. It is right that we should be wary of young people who are involved in antisocial behaviour, but it is also important that we should not stigmatise them. A letter in The Times today was signed by practically everybody who is anybody in the voluntary sector that deals with these issues. It said that an injunction to prevent nuisance and annoyance could be used differently in different hands.

The annoyance and nuisance I feel would be different from that felt by someone else. I am 57 years of age this year—[Interruption.] Yes, it is true—just checking whether the House was still awake. The annoyance I feel in my office in Norman Shaw North may be different from that felt by younger Government Members with offices in Norman Shaw North who have just been elected. They may find the nuisance and annoyance not as great as I would because of my age. The same could be said for my hon. Friend the Member for Walsall North (Mr Winnick), who has an office next to mine. His threshold may be different even from mine. We should

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look at the matter because the thresholds are different. It is important to read what those who signed the letter say. At the end they say: