The respondents were not only asked whether they supported the proposals but split into two groups. The first group were told they that the measures had been suggested by some unspecified people and the second group were told that they were being proposed by Conservative politicians. Seventy-one per cent. of people in sample A—those who thought the measures had been proposed by unspecified people—agreed with the

17 Jan 2014 : Column 1148

proposition that we should record the nationality of benefits claimants. The negative Tory effect, as it was called, was minus 3%, in that even if people were told that those nasty Conservatives were making the proposal, 68% still said, “I’m not bothered who puts it forward—it’s still a damn good idea and I want to support it.” Lord Ashcroft then took into account the people who said, “Frankly, I’m not that interested in politics and I can’t give a view—I neither agree nor disagree”; he called it the “Meh” effect. Twenty-one per cent. of respondents said they were not bothered either way, which, if one takes into account the 71% of those in sample A, leaves just 8% of the population disagreeing with the proposition that it is a good idea that we should record someone’s nationality when they wish to apply for a national insurance number.

The proposition on restricting welfare benefits to UK citizen, which is perhaps more important, was, I am pleased to say, even more popular, because 74% of people in sample A said they agreed with it, and 70% still thought it was a good idea even when they were told that it was being put forward by Conservative politicians. The figure for people who neither agreed nor disagreed—the “Meh” effect—was 13%.

These are enormously popular propositions, whichever way one looks at it. Our own anecdotal experience will tell us that if we go out into the street and discuss this with people they will say, “Of course British benefits should be paid to British citizens.” Nothing annoys people more than the thought of the taxes that they have paid as a result of hard work being paid to claimants who have not contributed to the system at all and have just come to this country saying that they are looking for work. Frankly, they are bound to say that; they are hardly likely to say, “I’ve come here because you’ve got a better benefits system.” I have no doubt, to be fair, that it may well be true that most people come here looking for work, but that does not negate the fact that the overwhelming majority of the British people think that British benefits should go only to British citizens.

As my hon. Friend the Member for Christchurch has said, this House is now, in essence, unable to deal with this matter, as is the case with so many other issues.

Philip Davies: We restrict access to benefits for people who come to this country from outside the European Union, so the idea that foreign nationals should not have access to our benefits does not appear to be controversial. Everybody seems to agree that we should restrict benefits for people from outside the EU, so is there any reason at all why the same principle should not apply to non-British citizens from within the EU?

Mr Nuttall: My hon. Friend is absolutely right. I think that this is one reason why there is so much antagonism towards our membership of the European Union. This House is impotent in these matters. As my hon. Friend the Member for Christchurch has said—I fear the Minister will say the same thing—the most we can do is restrict for three months the benefits of people who come here from other EU countries. To be frank, that is neither here nor there. It is no wonder that people are not satisfied with that response. Of course, they agree with it—it is better than nothing and we agree entirely that we should do it—but it is nowhere near

17 Jan 2014 : Column 1149

being a sufficiently robust response to the complaints we hear every day of the week, such as, “I know very well that there are people living down the road who have moved here and made no contribution to the system, and yet they are claiming benefits.” I do not think that making them wait for a few weeks before they can claim will be enough to assuage people’s concerns.

I do not want to go down another avenue, but, to be honest, our relationship with the EU goes to the very heart of the problem, and unless we deal with that relationship, we will not be able to solve the problem. When this country joined the EU, it was not, of course, the European Union, but the Common Market. People thought that they were joining a free trade area. It had nothing to do with lots of people coming here and claiming benefits. As my hon. Friend has said, over the years we have seen a general competence creep on the part of the EU. It has gradually taken over more and more competences: more and more things have become its responsibility rather than the responsibility of this Chamber. It is, therefore, no wonder that people feel that it is not worth voting in elections and say, “There’s no point, because you can’t change anything.”

We have yet to hear what the Government’s red lines are in renegotiating our EU terms of membership, but such matters should be brought back within the control of this Parliament. I venture to suggest that if any party put that in its manifesto, it would be extremely well received and very popular, as shown by the evidence that I have given. The popular nature of the measure would be demonstrated if we put it in a manifesto and voted on it in a general election, knowing that it could be brought into law and that its introduction could not be stopped by the European Union.

If the measure is prevented by our membership of the EU and that fact is not changed in any renegotiation, the British people would be absolutely right to vote to leave the EU so that we can get back control over such matters as deciding who we pay benefits to. That is the heart of the matter. The measure is popular and would receive widespread support right across this country. I will not detain the House with the details, but the poll shows that it is supported by all age groups, sections of the public and parts of the country. It is absolutely wrong that this House has no power to bring in the measure because of our membership of the European Union, which is really what this boils down to. There is no other reason why we cannot do it; we are stopped from doing it by being members of the European Union.

I hope that the Minister will say something different—that he entirely agrees that the measure is popular and that it will receive the Government’s full support—but I fear that will not be the case. Nevertheless, the Bill has my full support. It will receive if not universal, then very widespread support from my constituents, and I wish it well.

Karl Turner (Kingston upon Hull East) (Lab): The hon. Gentleman has suggested that some people come to this country purely to claim benefits. Frankly, I disagree with that contention, but will he estimate what percentage of people coming from the European Union do so purely to claim benefits?

17 Jan 2014 : Column 1150

Mr Nuttall: The hon. Gentleman makes a fair point in that we can only estimate or guess, because nobody keeps a check or monitors the situation: there are no figures. We do not know the percentage, because we do not check. That is why I accept that if people are asked why they come to this country, nobody says, “Just to claim your benefits”; they all say, “I’ve come here to look for work, of course.”

Karl Turner: Frankly, I think that the figure is probably zero. Does the hon. Gentleman agree, because he can only guess, can he not?

Mr Nuttall: We do not know. I suspect that the figure is probably not zero, but some people will do so. Human nature being what it is, some people will want to work the system, just as there are some in this country who want to work the system and bend the rules to get the best deal they can. To be fair to them, the current EU rules permit those people to come here. They will say, “I’m not doing anything wrong. I’m not committing any offences. I want to improve my English language skills”—those skills are very useful to have—so they can give lots of reasons for wanting to come to this country. When they are asked, I suspect 0% of them would say, “Well, I’ve come here to claim benefits”, but the reality is that they are doing so. It does not matter what they say; what matters is what is actually happening.

Frankly, if there is no problem, it does not matter if the Bill passes, does it? If nobody is coming here for that purpose, the Bill will not matter. However, when they are asked, the vast majority of people think that there is a problem that this Parliament should be doing something about. It is a travesty that, because we are members of the European Union, we cannot do anything about it. As I say, I hope that the Bill receives a fair wind from the Government and that it finds its way speedily on to the statute book.


12.39 pm

Philip Davies (Shipley) (Con): I intend to speak only briefly to put on the record my full support for my hon. Friend the Member for Christchurch (Mr Chope) and his excellent Bill. I am proud to be one of its sponsors.

I had always thought that the concept that benefits in this country should be paid only to UK citizens was not particularly contentious. I thought that everybody across the political divide agreed with that. If the hon. Member for Kingston upon Hull East (Karl Turner) wants to say that he does not support that principle—as a shadow Minister, he must speak with some authority on behalf of the Labour party as a whole—he is at liberty to do so.

If the hon. Gentleman does not think that there should be a restriction on the payment of benefits to people who are not UK citizens, he will presumably campaign for every non-EU citizen who comes into this country to have full access to the benefits system, unless he thinks that people from outside the EU are lesser people than those who are from within the EU. Perhaps he wants to discriminate against people from south Asia when they come into this country. In his interventions on my hon. Friend the Member for Bury North (Mr Nuttall), he seemed to be suggesting that all the people who come in from the EU are decent coves and

17 Jan 2014 : Column 1151

should have full access to our benefits system, but that all those who come to this country from outside the EU are foul, swindling people whom we should stop at every turn. That appeared to be the thrust of what he was saying.

I do not subscribe to that view. I think that this country should treat all people who are not UK citizens exactly the same, irrespective of where they are from. It should not matter whether they are from India, Pakistan, South Africa or south America, or from Poland, Bulgaria, France or Germany. As far as I am concerned, we should treat them all the same. To me, they are all non-UK nationals. We should not be picking and choosing which countries have better people than others. The hon. Gentleman might want to go down that line, as he indicated in his interventions, but I do not. I think that we should treat them all the same.

Karl Turner: The hon. Gentleman knows for a fact that that is not what I was suggesting. I was making the point, which I think was a valid one, that the suggestion by the hon. Member for Bury North (Mr Nuttall) that vast numbers of people are coming here with the sole motivation of claiming benefits is just not true.

Philip Davies: I am grateful to the hon. Gentleman. He is leading with his chin on these matters. He is getting out increasingly bigger spades with which to dig himself into a hole. He has now suggested that nobody from the EU comes here to claim benefits, but that everybody who comes here from outside the EU does so to claim benefits and that we need to restrict access to benefits for them. If he is not saying that, presumably his argument is that we should allow a free-for-all of benefits for anyone from anywhere around the world. That is certainly not an argument that I support, and I do not think that the majority of my constituents would support it.

Mr Chope: Does my hon. Friend agree that the question is not just whether people arrive here with the intention of claiming benefits, but whether, having been here for a bit of time and seen our generous benefits system, people decide not to seek employment but to claim benefits? For example, I had a constituency case in which a person came here from another European country and, after a year, gave up work and went on housing benefit, saying, “There’s no need for me to work.”

Philip Davies: My hon. Friend is absolutely right. I suspect that many Members have had similar cases. A man from Poland came into my constituency surgery who had come here to work, as he was entitled to do. He had heard on the grapevine in his local community that he was entitled to claim child benefit for his four children who were still residing back home in Poland. He thought that seemed like a good wheeze and that, if all his colleagues were doing it, he might as well do it himself. Of course, he found that, bizarrely, he was entitled to child benefit for his four children, who had never in their lives set foot outside Poland and who were living there with his wife, their mother. There is absolutely no justification for anybody from another country in the EU claiming child benefit for children who have not even had the decency to come over to this country and who are still residing in their home country.

17 Jan 2014 : Column 1152

The reason I support the Bill so strongly is that I believe we should treat all non-UK citizens the same, irrespective of where they are from. To me, that means restricting their access to benefits in this country. That is a simple proposition that I think most people in this country would support. We cannot afford to carry on handing out benefits willy-nilly to people who choose to come here from all over the EU—it is not sustainable for the welfare state or for our citizens. It will collapse the welfare state for UK citizens if we keep having to add to the burden.

Dr Julian Lewis: On a point of clarification, let us suppose that someone had come from abroad and been in genuine employment, and had paid some contributions towards social security, but then lost his job through no fault of his own. Does my hon. Friend agree that that person ought to have some entitlement to appropriate levels of benefit?

Philip Davies: No, I do not necessarily agree with that proposition. I do not know whether my hon. Friend has in mind how long that person might have had to work to be able to access benefits—it was not clear whether he felt that there should be a certain time span. As far as I can see, he is describing a non-British citizen who has come here not out of the goodness of his heart and concern for the UK’s economic well-being but, presumably, out of concern for his own economic well-being. It sounds as though he would have done rather well. Once the job is no longer available, I do not see any particular reason why we should then sustain such people in unemployment. It seems to me that at that point, we should be perfectly entitled to say, “If you can’t support yourself, we are not responsible for your continued upkeep.” I do not see why that should be unacceptable.

The UK Government’s primary duty should be to look after UK citizens, not to look after anybody who chooses to come here, works for five minutes and then expects us to sustain them on benefits for the rest of their life. I therefore do not necessarily agree with my hon. Friend’s premise—and +even if it were desirable for the British Government to make such promises, I do not think it is affordable.

I ask that the Government accept the Bill promoted by my hon. Friend the Member for Christchurch. I do not doubt that the consequence of it would be that we would have to leave the European Union, and I do not have a problem with that—I want to leave the European Union at the first opportunity. If the Bill would hasten our exit from the EU, that is an even greater reason to support it.

The Bill seems to me a statement of common sense and of what, as we have seen from Lord Ashcroft’s polling, the British public not only want but, I suspect, expect from their Government. I cannot understand how anybody could possibly be opposed to it, and I look forward to the Minister and shadow Minister doing some kind of gymnastics to explain why on earth it is not a sensible Bill. I suspect that most of their constituents think it is.

12.48 pm

Stephen Timms (East Ham) (Lab): The Bill is, of course, directly incompatible with our membership of the European Union. [Hon. Members: “Hear, hear!”]

17 Jan 2014 : Column 1153

The hon. Member for Christchurch (Mr Chope) proposes that European Union citizens who are working legally in the UK should not be entitled, for example, to help with their housing costs, which UK citizens are entitled to. That direct discrimination against EU citizens is clearly incompatible with our obligations as a member state—I noted the enthusiasm for that proposition on the Conservative Benches.

One puzzling aspect of the Bill is that under its terms, contrary to what the hon. Member for Shipley (Philip Davies) said, people from outside Europe would continue to receive the help that citizens of the European Union would be prevented from receiving. He said that he wanted anyone who is not a UK citizen to be denied access to benefits, and I think he is under the impression that that is what the Bill would do. In fact, it would have that effect only on EU citizens, not on citizens from countries elsewhere in the world.

Two million citizens of other European countries are living in the UK. Many will have lived in the UK for a long time, and some will be in receipt of housing benefit or council tax benefit, alongside other UK residents whose circumstances are similar. Under clause 2 they would suddenly stop receiving that help. Some will be in receipt of other non-contributory benefits such as pension credit, so we are talking about some pensioners being affected, perhaps after a lifetime of working in the UK. Some are in receipt of child benefit, which is not insurance based, or tax credits, but under clause 4 they would suddenly lose them. European Union citizens would suddenly be disadvantaged not only relative to UK citizens, but also relative to citizens of non-European countries. The hon. Gentleman has told the House that that is not his intention, but that is the effect of the Bill he supports.

Mr Chope: If, as the right hon. Gentleman suggested, a citizen of another country has been in the United Kingdom for a lifetime of work, they would be able to qualify for British nationality if they have been resident here for more than five years.

Stephen Timms: They may be entitled to do that, but many do not. Is it not the case that London has one of the largest French populations in the world? I think only two or three cities in France have more French citizens living in them than London does. The hon. Gentleman may feel that they should all apply for UK citizenship, but that seems to me an unreasonable demand.

Philip Davies: The right hon. Gentleman seems already to have started the gymnastics as to why he is against the Bill. Is he saying that if the same restrictions that the Bill places on people from within the EU were imposed on people from outside the EU, he would support it on the basis that it would be consistent? Is that what he is saying, or is he just trying to give a bogus reason for why he is against the Bill?

Stephen Timms: I am simply seeking to assist Conservative Members who—clearly, in the hon. Gentleman’s case—do not understand the effect of the Bill. He said that he wanted benefits to be taken away from anyone who is not a UK citizen, but that would

17 Jan 2014 : Column 1154

not be the effect of the Bill. I am simply seeking to be helpful, as I always am, to him and other hon. Members, and to explain the effects of the Bill they are supporting.

It would be interesting to know whether the hon. Member for Christchurch has made an assessment of the Bill’s impact on the large number of UK citizens living elsewhere in Europe, if such a policy were adopted in other member states. There are 1 million UK citizens living elsewhere in the European Union, and if other countries adopted the policy set out in the Bill, many would find themselves much worse off. Some pensioners in other European countries would find their pensions drastically reduced, and I wonder what the impact on the Exchequer would be if large numbers of retired Britons, who currently depend on health services in other European Union member states, suddenly returned to the UK and became dependent on the national health service.

There are, of course, perfectly justified reasons for concern about how the benefits system works in respect of European countries. We certainly agree that the Government should act now to deal with the exploitation of migrant workers from the EU and provide apprenticeships and training for unemployed young people targeted specifically at sectors recruiting from abroad. It is also perfectly appropriate to make sensible changes to the rules for jobseeker’s allowance, so that it is clear that people should not simply claim benefits on arrival, but contribute first. We also support reforms at EU level so that family benefits, such as child tax credit and child benefit, are not sent abroad.

In our view, there should also be action outside the benefits system. We have argued that fines for breaching the minimum wage regulations should be doubled. Local authorities should be allowed to take enforcement action over the minimum wage. I hope we can debate that in our deliberations on the Employment Opportunities Bill, which appears in the name of the hon. Member for Christchurch further down the Order Paper. The value of the minimum wage has fallen relative to other incomes since the general election, and it is welcome that the Chancellor has indicated his change of heart and is speaking now about significantly raising it. Furthermore, the rules for gangmasters should be strengthened, and the Gangmasters Licensing Authority should have its remit extended to sectors where there is currently abuse. Steps should be taken to stop the exploitation of migrant workers by rogue landlords. It should be illegal to cram migrants into grossly unsuitable accommodation, such as garages, sheds, barns and overcrowded mobile homes.

The benefits system needs to be fair, and to be seen to be fair. Over many decades, people have come from European countries to Britain and made a huge contribution to our economy and our society. There are quite a number of EU citizens working here in the Palace of Westminster, and it would be absolutely wrong suddenly to place them at a drastic disadvantage, relative to other workers, whether UK citizens or citizens of non-European countries, such as China and India, who would not be affected by the Bill. For all those reasons, we firmly oppose the Bill.

12.57 pm

The Minister of State, Department for Work and Pensions (Mike Penning): It is a privilege to serve in the House this afternoon as the duty Minister at the Department

17 Jan 2014 : Column 1155

for Work and Pensions. I am sure that hon. Members on both sides of the House will not be surprised to hear that I and the Government support much of what has been said today. I was accused earlier of probably having a carefully worded statement to read out which had been prepared after hours of works by civil servants. Anybody who knows me since I have been a Minister knows that I have never read out anything carefully worded in my life, which is why I get in trouble so much—but there we are.

As the shadow Minister and several colleagues alluded to, I am trapped, not so much, interestingly, by our membership of the EU, but by the interpretation of that membership by the courts over the years, which has extended the powers of unelected bodies over this country and this House. I am also slightly restricted in that, if I, as a Minister of the Crown, have legal advice that the Bill would be a breach for which I could be infracted, I am required, as the shadow Minister will know, being a former Minister, not to get the Government into that position. The ministerial code prevents me from doing that.

The Government will, therefore, be opposing the Bill today. I shall explain why and what we are doing. As announced already, we are doing as much as we can, within the established framework, to ensure that people who come to this country from the EU and the EEA come here to work from the outset and that they are restricted from getting benefits for the first three months.

I heard during today’s debate that that is not much of a restriction. I would have thought that people from different countries being in this country for 12 weeks with no income whatever would provide quite a restriction and would mean bearing a lot of financial hardship. Getting here and then having to live here for three months without benefits would be quite restrictive. I accept that there might be sponsorship for some, but three months is as far as we could go, although we continue to look at other measures while negotiations with our European partners are taking place.

Mr Chope: When someone asks for benefits, how are the Government going to find out whether that person has been in the country for less than three months? How will the Government know even that the person is a foreign national?

Mike Penning: I was coming on to that, as it was one of the questions I was asked. Indeed, it is a question that I have asked as a Minister in the Department. Although employment benefits are not exactly my—

Madam Deputy Speaker (Dawn Primarolo): Order. I am sorry, Minister, but every time you turn around from the Chair and the microphone to face your hon. Friend, I have difficulty hearing you. Not only that, but turning away from the microphones will cause difficulties for Hansard. I would be grateful if the Minister kept facing the House rather turning around. I am sure that the hon. Member for Christchurch (Mr Chope) will not be offended; it is the Minister’s words that he is listening to.

Mike Penning: Of course, Madam Deputy Speaker. I shall try to speak up, too, so that Hansard can get every last nuance of what I say.

17 Jan 2014 : Column 1156

As I was saying, I was asked the same question when I became a Minister some three and a half months ago. That question is asked. I have officials of different nationalities who worked in Jobcentre Plus, but the difference is that it does not tie up directly with the Home Office systems at the moment. It will, however, when the excellent universal credit system comes into force. [Interruption.] I hear derogatory comments from a sedentary position coming from the Opposition side, so let me ask them whether they are going to scrap universal credit when they come into power—should this country be silly enough to allow a Labour Government back in again.

Stephen Timms rose—

Madam Deputy Speaker: Order. However tempted the right hon. Gentleman might be to respond, we are not discussing universal credit today. I am happy for him to speak from the Dispatch Box, but he should not take us off the subject of this Bill. I expect the House to return to it.

Stephen Timms: I am grateful to you, Madam Deputy Speaker, but I have to respond to the Minister. We have, of course, always supported the principle of universal credit; it is a shame that the Government have made such a terrible mess of implementing it.

Madam Deputy Speaker: Order. That is enough. We are not debating universal credit. I require the Minister to speak only to the Bill and to ensure that the Government’s view of it is clearly heard, before we return to the promoter for his final comments.

Mike Penning: I fully accept your ruling, Madam Deputy Speaker. I had to mention universal credit because that provides the answer to how we would know which country people claiming benefit come from. We are working closely, too, on making changes to the legal framework at the EU level, particularly in respect of family benefits for children who are not resident in this country. We think—and I think hon. Members would agree with me—that child benefit and child tax credit should not be paid to non-EU member families that are not resident in this country; we need to work on changing that.

The key issue is whether the scope of the Bill is such that the Government could support it. I am afraid that it is not. We sympathise with much of the intention—and so would my constituents—but as we run into the next election and the referendum, the Prime Minister will be participating in attempts to renegotiate our position to give this Parliament the sort of control over benefits and other issues that we would expect. Sadly, on behalf of the Government, I cannot support the Bill today.

1.4 pm

Mr Chope: That is both a surprise and a disappointment, although I am grateful to the Minister for saying that he agrees with a lot of the ideas behind the Bill. He says, in effect, that his hands are tied, he cannot do anything about it and we need to renegotiate these issues. My concern is that there does not seem to be any evidence that we will be able to command a majority in the European Union to renegotiate along the lines that we

17 Jan 2014 : Column 1157

seek. When I asked the Prime Minister whether this issue would be one on which we would be renegotiating, my question was passed to the Foreign Office and it replied by setting out priorities for renegotiation that did not include anything to do with the subject matter of the Bill. I hope that my hon. Friend the Minister has therefore been announcing new Government policy today in saying that this subject will be right at the forefront of our renegotiation of our terms of engagement with the European Union. If that is so, I have not been putting forward this Bill and arguing in vain.

In closing, I thank my hon. Friends the Members for Bury North (Mr Nuttall) and for Shipley (Philip Davies) for their support and encouragement on the Bill. I am also grateful to my nearby colleague in Hampshire, my hon. Friend the Member for New Forest East (Dr Lewis). Their presence and involvement shows that this subject will not go away and that a lot of people feel strongly about it. I asked the Minister how he will be able to find out whether somebody applying for jobseeker’s allowance has been in this country for less than three months, and whether they come from outside the United Kingdom and are a national of another EU country. In reply, he said that he would not be able to sort that out with a requirement as to nationality until universal credit came in, but on any view that is some many months or years away. Meanwhile, the Prime Minister, the Home Secretary and the Secretary of State for Work and Pensions are saying, “We are going to get tough, with effect from 1 January.” That is because people from Romania and Bulgaria were able to come here from 1 January and we were assured that we would be rigorous in ensuring that none of them would be able to apply for benefits within three months of their arrival. How are we going to know when people arrived and what nationality they are unless we have some means of asking the questions?

The Minister’s failure to answer that simple question drives a coach and horses through this aspect of Government policy. It is a charade; we are giving people the impression that we have got control over this when we have no control over it whatsoever. If that was not

17 Jan 2014 : Column 1158

apparent from what has been said already, the fact that the Government are being taken to the European Court on the issue even of the habitual residence test just shows that the European Union is working in the opposite direction from us. That is why I think I speak for most of my hon. Friends in saying that unless we can sort this out, we would be better off out of the European Union. That is why I think it would be useful, because of the ongoing European Union debate, to test the will of the House on this matter.

Question put, That the Bill be now read a Second time.

The House divided:

Ayes 5, Noes 30.

Division No. 182]

[

1.8 pm

AYES

Chope, Mr Christopher

Hollobone, Mr Philip

Lewis, Dr Julian

Murrison, Dr Andrew

Rees-Mogg, Jacob

Tellers for the Ayes:

Mr David Nuttall

and

Philip Davies

NOES

Campbell, Mr Alan

Eustice, George

Fallon, rh Michael

Gardiner, Barry

Gauke, Mr David

Goodwill, Mr Robert

Grant, Mrs Helen

Hammond, Stephen

Harper, Mr Mark

Harris, Rebecca

Hodgson, Mrs Sharon

Hopkins, Kris

Macleod, Mary

Murrison, Dr Andrew

Neill, Robert

Opperman, Guy

Penning, Mike

Perry, Claire

Phillips, Stephen

Poulter, Dr Daniel

Pound, Stephen

Reed, Mr Steve

Robinson, Mr Geoffrey

Shuker, Gavin

Simmonds, Mark

Swayne, rh Mr Desmond

Timms, rh Stephen

Turner, Karl

Vaizey, Mr Edward

Vara, Mr Shailesh

Tellers for the Noes:

Karen Bradley

and

Gavin Barwell

The Deputy Speaker declared that the Question was not decided because fewer than 40 Members had taken part in the Division, and the business under consideration stood over until the next sitting of the House (Standing Order No. 41).

17 Jan 2014 : Column 1159

Illegal Immigrants (Criminal Sanctions) Bill

Second Reading

1.21 pm

Mr Christopher Chope (Christchurch) (Con): I beg to move, That the Bill be now read a Second time.

Flushed by my success on the previous Bill, I start by saying that many Members will remember the Government’s publicity campaign in which vans went around telling people that, if they were here illegally, they should leave or face penalties or arrest. In fact, on closer examination, it is clear that the warning signs on those vans were of no more value than the sign that someone puts at the end of his garden saying, “Trespassers will be prosecuted.”

There is no criminal law against normal trespass. Likewise, it is not a criminal offence to be in this country having entered without authority or having overstayed once the legal authority to be here has expired. I do not think I am alone in finding it extraordinary that people can be in the United Kingdom without legal authority with impunity. They are not guilty of any offence because there is no offence. We are prosecuting hundreds of thousands of people for watching television illicitly without a television licence, but people who are here having broken our immigration laws are not subject to any criminal sanction.

When I raised the matter with the Immigration Minister, whom I am delighted to see on the Front Bench for this debate, he said, “Wouldn’t it be rather pointless to make it a criminal offence, because you would be prosecuting people and locking them up in prison when what you want is for them to go home?” I have built the Bill around that point. The penalties set out in clause 2 would accommodate his concerns.

Clause 1 states:

“Any person who is present in the United Kingdom after 30 June 2014 without legal authority shall be guilty of an offence…Any person who after 30 June 2014 enters or attempts to enter the United Kingdom without legal authority shall be guilty of an offence.”

We need to make it clear that the Government and our country do not tolerate people who break our immigration laws by coming into this country illicitly or by staying on after they should have left.

Philip Davies (Shipley) (Con): I am grateful to my hon. Friend for giving way and I very much support his Bill. Does he agree that there is currently no deterrent to somebody chancing their arm and trying to get into this country illegally, because the worst that can happen to them is that they will be sent back to where they come from? If his Bill was passed, the risk of losing their liberty might deter them from trying in the first place.

Mr Chope: My hon. Friend is absolutely right. Let me give a bit of background. I discovered that when a bystander in the port of Poole sees illegal immigrants from the continent getting out of the back of a van or lorry and decides to call the police, the police are not interested because they have no power of arrest as the person has not committed a criminal offence. All they can do, if they are feeling generous with their time, is tell those people to go to Croydon to report to the

17 Jan 2014 : Column 1160

immigration and nationality directorate, which will tell them how to get back home. Not surprisingly, such people do not go to Croydon but go elsewhere.

Philip Davies: Did my hon. Friend consider a more draconian measure for his Bill, such as saying that anybody who entered the country illegally would be greeted by the right hon. Member for Leicester East (Keith Vaz)?

Mr Chope: I do not think I can comment on that, particularly because the right hon. Member for Leicester East (Keith Vaz) is not in the Chamber.

We then come on to the question of penalties. Let me illustrate the point with an example. I have a constituency case of a person who came here on a visitor’s visa. As they are married to a British citizen, all they needed to do was keep renewing that visa but they did not apply for an extension within the specified time and as a result they have been refused a new visa. I discussed with them whether they should appeal against that refusal, but there is no power of appeal and the advice that is given is that if an in-country application for a visa extension is rejected the person should voluntarily make their own way back to the country from which they came as it is possible they might be subject to a deportation order in due course. Of course, under the law a deportation order is subject to appeal so the authorities do not want to make many such orders as the appeals would clog up the immigration tribunal system. People therefore overstay their visas with impunity as there is effectively no sanction against them. The only sanction arises if they want to visit their country of origin to see a relative or something like that, when they suddenly find that they do not have the right paperwork to get back into the country. They can lie low in this country with impunity for months or years.

I think it would be reasonable to say that somebody guilty of an offence on summary conviction should be subject to a maximum penalty of six months’ imprisonment or a fine that would be unlimited in England and Wales and would not exceed £5,000 in Scotland or Northern Ireland. A person would be brought before the court and, under the provisions of clause 2(2), would be ordered to be deported.

Unlike the present laws relating to deportation, which are rarely exercised, certainly for relatively minor offences—they are not applied in the cases to which I have referred—the deportation order would be mandatory unless the Secretary of State certified that it was against the public interest. In practice, the person would come before the court and, if found guilty, would be fined and deported or imprisoned, probably not for very long, pending deportation. The deportation would be ordered by the court, rather than the immigration authorities—the Border Agency—which is what happens at present.

An official from the Scotland Office contacted me, wondering what will happen in Scotland when the Bill is on the statute book. She pointed out that in Scotland deportation orders are not made by the courts; they merely make a recommendation to that effect. She agreed that there is nothing to stop the courts being given the power to make specific deportation orders, which I think is fundamental to clause 2. If people are here without legal authority, the most important thing is that they are deported as soon as possible, rather than

17 Jan 2014 : Column 1161

kept in custody at great expense. Rather than being subject to a recommendation of deportation, they should just be subject to deportation.

While driving to the House this morning, I saw a big, brand-new van on which were the words, “Home Office Immigration Enforcement”. I could not see whether there was anybody inside the van, other than the driver. I suspect that the large lettering was designed to reassure the public that something is being done about all this, but my experience, which I have referred to briefly today, leads me to believe that that is another game of bluff and bluster by the Government and that, in reality, they do not have the will to ensure that our borders are kept secure and that people who enter illegally are found guilty of an offence. [Interruption.]

The hon. Member for Ealing North (Stephen Pound) is chuntering from the Opposition Front Bench. He might think it unusual for me to be concerned about Government policy, but I think that this is another area of Government policy that could be tightened significantly. That would be in accordance not only with public interest, but with the will of the public. In the popular mind, illegality means being against the criminal law, and if someone is guilty of a criminal offence they should be subject to the consequences.

Dr Julian Lewis (New Forest East) (Con): It is unusual for my hon. Friend to reach this stage in the presentation of any of his multifarious Bills without making some reference in depth to the European Union. Will he explain what measures other European Union countries take when people overstay or enter illegally?

Mr Chope: Without having researched that in detail, and based upon my experience as Chairman of the Committee on Migration, Refugees and Displaced Persons of the Parliamentary Assembly of the Council of Europe, my answer is that practice varies significantly from one country to another. Some make being an illegal immigrant a criminal offence, but others do not. There is no uniform practice across the European Union—

Dr Lewis: So we cannot blame it for this one.

Mr Chope: I think that responsibility for this rests solely with the United Kingdom. While wearing the hat that I have just described, I have come across a lot of evidence of organised criminal networks bringing people into our country illegally. The networks are usually based overseas and take very large sums from often very unfortunate migrants.

Once the migrants get here, they can be assured that they are here with impunity, because they will be able to lie low and will not be subject to any criminal sanctions. That gives them a perverse incentive to come to the United Kingdom rather than go to another European country where the rules are stricter and being there without authority gives rise to criminal penalties and sanctions.

Mr David Nuttall (Bury North) (Con): My hon. Friend is making a compelling case for his Bill. Since it was given its First Reading, has he received any objections to it from any quarter, and, if so, from which groups has he received them?

17 Jan 2014 : Column 1162

Mr Chope: The short answer is no. This Bill, like the Benefit Entitlement (Restriction) Bill, was the subject of a survey by the noble Lord Ashcroft, and it was even more popular, with well over three quarters of respondents supporting it and only a handful opposing it.

The Bill accords with common sense. It is popular and sensible, and I hope the Government will let it go through and facilitate its passage so that we get it on to the statute book very quickly.

1.36 pm

Philip Davies (Shipley) (Con): I rise to put on the record my support for the Bill promoted by my hon. Friend the Member for Christchurch (Mr Chope). In all the words he used to describe it, he missed out “modest”, because it would merely strike a blow for common sense. I do not see why anybody could have any great objection to making being an illegal immigrant a criminal offence. Indeed, I would have thought that most people think that that is already the law of the land. I am sure we are all grateful to my hon. Friend for highlighting this issue.

I would like to raise a couple of additional points beyond what my hon. Friend said—I agreed with every word—regarding matters that go hand in hand with the Bill and that the Government need to address. First, there is the need to extricate ourselves from the European convention on human rights. One of the major problems that this country faces in kicking out illegal immigrants is the Human Rights Act 1998 and the fact that the European Court of Human Rights, time after time, compels the United Kingdom to keep people in the country who have no basis for being here. Unless we tackle that issue as well, even my hon. Friend’s best intentions will be thwarted. I make an appeal for us to scrap the Human Rights Act, which has become a charter for criminals and illegal immigrants, and to get ourselves out of the European convention of human rights, because it is no longer acting in the UK’s national interest.

My other point, which I particularly direct at the Minister, is that people who have served their prison sentence for being in this country illegally should then be automatically kicked out. Unfortunately, on too many occasions when illegal immigrants are sent to prison having committed other criminal offences, even those people are not automatically deported from the country, as most people would think is the blindingly obvious thing to do. Far too many of them are released back on to the streets to go into hiding or to go out and commit more crimes. The Government can do an awful lot to get their performance right in making sure that any illegal immigrant who is caught is kicked out of the country straight away, which, on too many occasions, does not happen.

As part of that overall strategy to stop people coming here illegally and to make it easier to kick out those who are here illegally, I hope the Government will make much more rapid progress on the e-Borders project, the contracts for which the previous Government made a complete pig’s ear of. We are way behind other countries and the project has the scope to help prevent people we do not want to come to this country from coming here. Surely we should be striving to stop these people coming here in the first place. The trouble is that once they are

17 Jan 2014 : Column 1163

here, the Government then have a job getting rid of them. The e-Borders project would make a massive difference if introduced properly and stop some of these people getting here in the first place. The Government could do a lot better.

The second issue on which the Government need to pull their finger out is exit checks. We are in the ridiculous situation whereby the Government keep absolutely no track of who leaves the country. This is slightly relevant to my hon. Friend’s previous Bill: we are already fighting with one hand tied behind our back, because we have absolutely no idea which of those people who have come here have left. I think I am right in saying that the coalition agreement said that exit checks would be in place during the course of this Parliament, but time is running out and I see no great sign that everything the Government said they would do to deal with these immigration problems is going to be sorted out.

The Government could do an awful lot more, irrespective of my hon. Friend’s Bill. There can be no doubt that making sure that being here illegally is a criminal offence and that people can be sent to prison for it would act as a deterrent to prevent them from trying to come here in the first place. As I said in my earlier intervention, there is nothing to deter somebody from chancing their arm, because the worst thing that can happen to them is that they will be sent back to the country they came from without receiving any punishment whatsoever, so of course lots of people are going to come here.

Many of my constituents tell me, “People come into this country illegally because we are so generous and give them too much money,” but I think that is a myth. I do not think it has anything to with that. I think that the reason why so many people chance their arm and come to the UK is that they realise that once they get here, the chances of their ever being kicked out are pretty remote. That is what drives them to come to the UK and we have to be much more robust at making sure that anybody who is here who should not be is kicked out. I am absolutely certain not only that the Bill will be very popular with the public, but that it will make a real difference in tackling a problem that my constituents are sick to their back teeth of hearing about and on which they feel that the Government are not taking any meaningful action.

1.42 pm

Mr Steve Reed (Croydon North) (Lab): It is right, of course, that those who seek to enter the country illegally should face criminal sanctions. It is right, too, that those sanctions should be tough enough to deter others from following a similar course and to punish appropriately those who commit the offence.

This Bill seeks to create criminal offences for anyone who comes into the country without any right to be here. The problem is that the offences exist already. There are existing offences for entering without leave, obtaining leave by deception, remaining beyond time limited by leave, failing to observe a condition of leave, assisting unlawful immigration, facilitating entry for gain, assisting entry in breach of a deportation or exclusion order, sham marriages, identity document offences and many others. Those are only some of the offences that are already on the statute books.

17 Jan 2014 : Column 1164

That being the case, it is fair to say that this Bill is superfluous and unnecessary. It is an exercise in pointlessness to promote new legislation that seeks to achieve what existing legislation already does.

Immigration is a serious issue of deep concern to the public, and rightly so. Therefore, we need a mature and sensible debate on immigration, not an arms race of rhetoric. Most people who come to Britain contribute positively to our economy and our communities. Illegal immigration is a problem that is already criminalised.

I accept that the Government could do more to cut illegal immigration, but this Bill misses that opportunity. There is a problem with the Government’s net migration target, because it does not target the right things. Two thirds of the drop in numbers since 2010 is down to the fact that more British people are leaving the UK than are returning here. Most of the rest relates to the falling number of foreign students who, in any case, would be here only temporarily. Illegal immigration is outside the Government target.

Under this Government, fewer illegal immigrants have been stopped, more have absconded and fewer have been deported, while the backlog of information on cases is not being pursued. We should do more to tackle illegal immigration, including by perhaps giving border staff a new power to enable them to act quickly when they find abuse. Alas, the Bill proposes none of that; it simply repeats existing provisions, and I fear that it would make no difference on a matter of concern to the British people.

In conclusion, the Opposition welcome the positive contribution made by legal immigrants to the life of our country. We want effective action to be taken against illegal immigration, but the Bill will contribute nothing new or useful to help achieve that.

1.45 pm

Mr David Nuttall (Bury North) (Con): On the points made by the Opposition Front Bencher, the hon. Member for Croydon North (Mr Reed), I cannot help but think that no similar points were made against the International Development (Gender Equality) Bill. When we considered that Bill earlier, it was suggested that its provision could easily be dealt with by Ministers without the need for legislation, but the Minister of State, Department for International Development, gave all manner of reasons why they should be enshrined in legislation. Let me put on the record that I support the Illegal Immigrants (Criminal Sanctions) Bill, and I am pleased to be one of its sponsors.

May I deal briefly with the point made by my hon. Friend the Member for Shipley (Philip Davies) about the human rights aspect? I want to refer to the case of Haroon Aswat, a suspected terrorist, whom the Grand Chamber of the European Court of Human Rights has prevented this country from returning to the United States of America. It comes to something when we cannot even return suspected terrorists to the US on the grounds that it is not a fit and proper country to which to return people. That really calls the whole system into question. It is the most developed nation on earth, so if the European Court of Human Rights says that it is not a safe nation—

Jacob Rees-Mogg (North East Somerset) (Con): Will my hon. Friend give way.

17 Jan 2014 : Column 1165

Mr Nuttall: Certainly.

Jacob Rees-Mogg: Did I hear my hon. Friend correctly? He said that the United States is the most developed nation on earth, but surely it is only the sixth, after all those of which the Queen is sovereign.

Mr Nuttall: My hon. Friend is, as ever, quite right. It is perhaps more accurate to say that the US is one of the most developed nations.

Mr Peter Lilley (Hitchin and Harpenden) (Con): The largest.

Mr Nuttall: It is certainly the largest developed nation.

I do not want to detain the House for too long, because I am keen that the Bill should proceed through the House today.

The Minister for Immigration (Mr Mark Harper): I will be brief, but I cannot resist intervening, because I do not often have the chance to put right my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) on a constitutional matter. Her Majesty the Queen is of course the sovereign of 16 nations, not only six.

Mr Nuttall rose

Jacob Rees-Mogg: I was excluding those that are basically still colonies.

Mr Nuttall: That is the solution, and we now have agreement on that issue.

My hon. Friend the Member for Christchurch (Mr Chope) has referred to the poll carried out by Lord Ashcroft on 28 and 30 June that asked 2,013 people about the merits or otherwise of various Bills. I obviously do not know why each of those individuals decided their views about each Bill, but on this one to introduce criminal sanctions against those in this country illegally, 86% of people said that it was a good idea, while only 9% said that they were not bothered either way. Therefore, only one in 20 people did not think that this was a sensible measure.

I am not surprised by that, because I see no reason why the Bill should not be on the statute book. It makes perfect sense that if somebody has entered this country illegally, through whatever means, it should be possible to find them guilty of having committed a criminal offence. For that reason, I fully support the Bill.

1.50 pm

The Minister for Immigration (Mr Mark Harper): I have listened carefully to the debate. Although the Bill is not enormous, a wide range of issues have been touched on, including the scale of illegal immigration to Britain, why people may come here and the effectiveness of Government policy in removing people. My hon. Friend the Member for Christchurch (Mr Chope) spoke about some of the visible enforcement activity that he has seen.

Before I turn to the detailed provisions of the Bill, it might be helpful to the House if I set out a little of the context, which Members can bear in mind when they

17 Jan 2014 : Column 1166

consider how they will vote on the Bill if my hon. Friend decides to test the will of the House. Immigration is an important subject, as is the question of those who have no right to be in Britain. Some illegal immigrants never had the right to be here, but still entered the United Kingdom. A more significant number of immigrants came here lawfully, but overstayed their welcome.

Why are people concerned about this matter? It is perfectly reasonable to be concerned, given the significant amount of migration, both legal and illegal, that we saw during the period of the last Labour Government. We only have statistics on legal migration because, by definition, it is very difficult to get a good handle on the level of unlawful migration. Net migration during that period was 2.2 million people. Despite what Labour likes to lead people to believe, the majority of those people came from outside the European Union, so it had full powers to do something about it.

We know that people are concerned about immigration and that they want tougher immigration controls. That was my party’s policy before the election and it is this Government’s policy. We have had a fair bit of success, with net migration down by nearly a third since 2010. I am afraid that it is not true, as the hon. Member for Croydon North (Mr Reed) said, that that is to do with a change in the number of British citizens. The most significant change is the fall in immigration. That has been put clearly on the record by the independent Office for National Statistics. Non-EU immigration to the United Kingdom is at its lowest level since 1998.

To be frank, it is true that the most recent figures showed a small increase. That was largely because of an increase in migration from the EU. However, that has come not from the parts of the EU that have recently been giving the press in this country the vapours, but from more traditional EU member states such as Spain and other countries in southern Europe which have economies that are performing less well. It is important to put that in context.

On illegal migration, which is the subject of the Bill, I want to put two points to my hon. Friend the Member for Christchurch that I hope he will find reassuring. A significant number of people who want to come to the United Kingdom illegally try to get here through our sea ports or the channel tunnel. He will be familiar with the fact that we have juxtaposed controls, which means that our border is effectively in France. We check freight vehicles, passenger transport that comes through the tunnel and transport on the ferries. Our UK Border Force officers, whom he mentioned, do an excellent job of preventing people from entering the UK illegally in the first place. In the year to the end of March 2013, for example, they prevented more than 11,000 people from entering. That is important, because if people cannot enter the United Kingdom illegally in the first place, the provisions in his Bill are unnecessary. We stop them at the border, which, with the juxtaposed controls, is in France, so they never get to our shores.

Mr Chope: The Minister says that 11,000 people were prevented from coming, but how many of them have subsequently got in without detection?

Mr Harper: My hon. Friend asks an unanswerable question, but it is also worth considering the checks that our immigration enforcement officers make. When

17 Jan 2014 : Column 1167

they encounter people who are working illegally, they look at when those people entered the United Kingdom to test whether they got through our juxtaposed controls. When we examine both sets of people—those we stop and those we encounter in-country—the evidence is that our controls are effective. I would not pretend that they are 100% effective, but they are very effective in reducing the number of people coming into the country.

As I said, most people who are in the United Kingdom illegally did not come here illegally. They came here lawfully but for a limited period. They are either a visa national—someone from one of the countries where we have visa controls—who has applied for a visa either to study or to work here and has overstayed, or a non-visa national from whom a visa was not required, but who has been allowed to come into the UK for only a limited period, perhaps as a visitor, and has overstayed. In one sense, my hon. Friend was right to raise his concern, because under the previous Government, if someone applied in-country for the renewal of a visa and was refused—I believe that was the example he gave—nothing happened. That was quite wrong. With our immigration enforcement organisation, we have started to change that.

It is worth mentioning in passing one change that I believe was generally welcomed in the House, including by the Chairman of the Home Affairs Committee, the right hon. Member for Leicester East (Keith Vaz), who has already been mentioned in this debate despite his not being here. Many people criticised the UK Border Agency, and when the Home Secretary split it up last year, one benefit was that our immigration enforcement operation—the part of the business that enforces the law and deals with illegal immigrants—was given a clear and separate identity. It still works closely with its colleagues in the rest of the Home Office, but we are creating much more of a visible law enforcement culture, which I think is what my hon. Friend the Member for Christchurch is looking for. He said that he had seen some immigration enforcement vans with their livery, which is a deliberate strategy to make people aware that we have legal powers and are taking action. In a moment, I will set out for him some statistics showing that we are stepping up that activity so that people know that we are being effective.

If we are to deal with overstayers, it is no good just having more effective controls at the border, because they were legal when they arrived in the UK. Clause 1 of my hon. Friend’s Bill refers not just to people who enter the UK without authority but to people who are present here, so it covers overstayers. He referred to overstayers being attracted to the UK because of their chances of being removed, but I will set out in a moment why I do not believe that was a correct conclusion. In the Immigration Bill, which is currently before Parliament and waiting for business managers to agree the timing of Report—that is well above my pay grade as a humble Minister of State, as he will know—there are a number of provisions to deal effectively with overstayers. For example, we will make it impossible for someone who is in the country unlawfully to rent property. They will not be able to get a driving licence, and if they have one we will be able to revoke it. They will not have access to a bank account, and we are toughening the law governing whether or not they will be able to work lawfully.

17 Jan 2014 : Column 1168

Importantly—several hon. Members have mentioned this—we are putting into primary legislation clear rules about the impact of article 8 of the European convention on human rights on our ability to remove foreign nationals, particularly if they are offenders. Judges have told us that despite having included such measures in secondary legislation, we have not given a clear enough steer to the judiciary. They have asked us to put that into primary legislation, and if my hon. Friend the Member for Christchurch and other hon. Members have taken the trouble to look at the Immigration Bill—I am sure they have—they will know that it contains clear statements about what the public interest requires, particularly regarding those guilty of criminal offences. Except in the most exceptional circumstances, we would expect someone guilty of an offence to be removed from the United Kingdom, and the Immigration Bill will contribute well to that.

My hon. Friend might also have spotted last October that we created the National Crime Agency, so as to be more effective in dealing with serious and organised crime. One part of that agency is the border policing command, part of which deals with the issues he raised about organised crime groups—based both inside and outside the United Kingdom—who are involved in people trafficking. Such trafficking could be either completely against someone’s will or when people effectively con others into coming to the United Kingdom by suggesting that all will be well, and perhaps charging them a fee. When people get to the UK, they then discover that things are not quite as they were led to believe, and sometimes they are almost in some kind of slavery or bonded arrangement, and are indebted to those organised crime groups. Hopefully, my hon. Friend will welcome the measures we have introduced.

My hon. Friend the Member for Shipley (Philip Davies), and my hon. Friend the Member for Christchurch when he introduced the Bill, spoke about exit checks. My hon. Friend the Member for Shipley said that we currently have no idea about who leaves the country, but that is not correct. Around 80% of those going into and out of the United Kingdom do so by air, around 10% by rail, and 10% by sea. For the vast majority of those travelling by air we have what is called advance passenger information, not only for those coming into the United Kingdom, but also for those leaving it. We use those data to protect ourselves from people coming in and to detect people who have perhaps had no right to be here and are leaving. We have that ability, but it needs to be improved.

My hon. Friend the Member for Shipley will know—I think he drew attention to this—that implementing exit checks was one of the commitments in the coalition agreement, and we are in the process of improving the coverage and the amount of data we collect. He will also know that the Immigration Bill contains provisions about outbound journeys, so that where we do not collect advance passenger information, the Home Secretary has the power—if we are not able to do it on a voluntary basis—to direct the carriers to work with the Home Office and perhaps collect some of that information. Such information is already collected for other reasons such as security and booking information, and so that we have more effective information about those coming to and from the United Kingdom. I do not pretend to my hon. Friend that the current position is perfect—it is

17 Jan 2014 : Column 1169

not, and there is more work to do—but it is not as bleak as he set out. We have also had meetings with those in the rail and maritime sectors to consider what more we can do for those modes of travel.

I detected in the debate one or two remarks from my hon. Friends the Members for Christchurch, for Shipley and for Bury North (Mr Nuttall) about European Union nationals, and the extent to which there are legal provisions to deal with those coming from the European Union. I know that all three hon. Friends take a close interest in such matters, and they will have spotted that in December I laid before Parliament amendments to regulations covering the European economic area. We have taken steps to restrict access to benefits for EEA migrants—that was the subject of the previous Bill, and I am not sure that my hon. Friend the Member for Christchurch has caught up with the extent to which we have already changed the law, but I will not dwell on that.

We have already defined in those regulations some abuses of free movement, such as when people are not exercising their treaty rights—for example, not working, not looking for work, not studying, not self-sufficient, but rough sleeping, begging or taking part in criminality. In those cases, we have given ourselves the legal power—the Immigration Bill is about putting provisions in statute to deal with offences—to remove those individuals from the UK and, importantly and for the first time, to prevent them from returning for at least a year, unless they can demonstrate that they will immediately be exercising their treaty rights. That is a significant new power that EU Schengen countries cannot put into effect because they do not have internal border controls. We can put it into effect because we do have those controls. I hope that gives my hon. Friend some confidence that we can deal with those abusing the free movement rules.

Finally, before turning to the detailed provisions in the Bill, I want to touch on serious criminality. I think my hon. Friends the Members for Christchurch, for Shipley and for Bury North all talked about people committing not just offences to do with their immigration status, but more serious offences. In case they are not aware, I draw to their attention the joint working that the immigration enforcement directorate is doing with police forces, starting with the Metropolitan police, as part of a project called Nexus. It is not surprising, given that one third of London’s population are foreign nationals, that one third of criminals in London are also foreign nationals—they are not more likely to be criminals, but they are not less likely either.

We have opened up a new set of powers, and we are helping the police to use their powers more effectively. It is sometimes difficult to get the required level of evidence to prosecute a person even for serious criminality—for example, if they are involved in gang-related activity, it can be difficult, because of intimidation, to persuade witnesses to come forward—but if that person is a foreign national, it is sometimes possible to use our immigration powers to remove them from the UK and prevent them from returning. Since we started Nexus a year ago, we have removed more than 1,000 high-harm criminals and are now rolling it out to other parts of the UK with significant foreign national populations. We are working with West Midlands and Great Manchester

17 Jan 2014 : Column 1170

police and—this will be of interest to you, Madam Deputy Speaker—Avon and Somerset constabulary to help them deal more effective with criminality perpetrated by foreign nationals, which is welcome. I hope my hon. Friend the Member for Christchurch welcomes those provisions, if he was not otherwise familiar with them.

When talking about how attractive the Bill was, my hon. Friend, like my hon. Friends the Members for Shipley and for Bury North, mentioned the noble Lord Ashcroft’s extensive polling on these subjects. I am not sure what terms he used in his polling—whether he referred specifically to the Bill or just to its provisions—but it was probably correct to point out that the provisions were overwhelmingly supported by the general public. I am not at all surprised by that. One of my hon. Friends also said that the general public would be surprised that these things were not already against the law. I do not often agree with the Labour party, but the hon. Member for Croydon North was right that the provisions are already effectively in statute.

The general public are hugely in favour of these provisions—quite rightly; I would expect them to be—but, as I think my hon. Friend the Member for Shipley said, the general public are also right if they think that they already exist in law, because they do exist. It may be helpful, in trying to persuade my hon. Friend the Member for Christchurch not to pursue his Bill, briefly to set out the existing powers.

The Immigration Act 1971 provides for the two criminal offences set out in the Bill. Section 24(1)(a) of the 1971 Act makes an offence of

“knowingly entering the United Kingdom in breach of a deportation order or without leave”,

while section 24(1)(b) makes it an offence to “knowingly overstay or breach” the conditions of leave. The maximum penalty for both those offences on summary conviction is a fine of £5,000 and/or six months’ imprisonment, which is the same as proposed in the Bill—a spooky coincidence. Under section 24A of the Immigration Act 1971, it is an offence to obtain or seek to obtain leave to enter or remain in the United Kingdom by deception, or to secure or seek to secure the avoidance, postponement or revocation of enforcement action by deception—and the maximum penalty for that offence is £5,000 and/or six months’ imprisonment on summary conviction. On indictment, the penalty is two years’ imprisonment or an unlimited fine or both. I hope that Members can see that the offences proposed in the Bill are already on the statute book.

Mr Chope: I asked the Minister a question about the incidence of offences. Can he tell us how many people have been prosecuted and convicted in respect of each of the offences to which he has referred? In replying to the parliamentary question I asked him, he said that the information could not be obtained because it would be too expensive.

Mr Harper: My hon. Friend anticipates what I was about to say. He refers to a question he asked me a few Home Office Question Times ago. He basically asked me whether there was an offence in relation to this issue and why we did not prosecute people who are in this country unlawfully. I replied that that was against the law, but that our strategy was to secure such people’s removal from the United Kingdom. I think I made the

17 Jan 2014 : Column 1171

point during that session of Home Office questions that it was not sensible, on the grounds of cost of the process, to prosecute everybody who is here unlawfully. My hon. Friend will know—he has expressed opinions about this before—that legal aid being what it is, the taxpayer would, even with our reforms, be likely to have to pay both prosecution and defence costs. Putting such offenders in prison would also be at taxpayers’ expense, and that would be necessary before we could remove them from the UK.

Philip Davies: The Minister talks about the cost of throwing these people into prison, but he was also bandying around the fact that £5,000 fines could be imposed, which I would have thought amounted to getting money into the Exchequer. If he does not want to send these people to prison because of the cost, will he tell us how many £5,000 fines have been levied on these people since he has been the Minister and since these marvellous laws that he has talked about have been in place?

Mr Harper: My hon. Friend will know, because he follows criminal justice matters intently, how much it costs to keep someone in prison. He knows that it costs very much more, even for six months, than £5,000. We are talking about costing the taxpayer significant amounts of money. I shall come on in a few moments to the number of people who are removed from the country; I would certainly not want to fund the cost of keeping them all in prison.

The current strategy is that we try to remove people who are in the United Kingdom illegally. Every year of this Government more illegal migrants have departed from the UK than in any year before 2010, and that trend was continuing in 2013. We remove two groups of people from the UK. Our preference is that people who are here unlawfully leave of their own accord. There is a clear reason for that: if someone leaves of their own accord, it does not put a huge financial burden on the taxpayer. If we have to go through the process of arresting and detaining someone, and going through an enforced removal, sometimes including escorts, the cost of removal can be upwards of £15,000 per person. I would rather not burden the taxpayer with that. In 2012-13, 44,000 people were removed from the country. It is worth repeating that figure of 44,000, because the polling seems to show that people think that nobody is removed from the UK, whereas the actual figure is significant. The number of people removed voluntarily because they found that it is not easy to be in the UK illegally increased by 30% between 2009-10 and 2012-13. That is the right approach to take. Part of the reason for the measures in the Immigration Bill is to make it more difficult to be in the UK unlawfully, so that more people will choose not to come here unlawfully in the first place and so that those already here will find leaving the UK a more attractive proposition than staying here unlawfully.

Philip Davies: Has the Minister not considered the fact that being much tougher on illegal immigrants might deter others from coming here? He seems to be suggesting that the worst thing that will happen to someone who comes to this country illegally is that the Minister, like Sergeant Wilson in “Dad’s Army”, is going to say, “Would you mind awfully leaving?” How is

17 Jan 2014 : Column 1172

there any deterrent to stop anybody coming here in the first place illegally if that is the worst that is ever going to happen to them?

Mr Harper: Not only do 40,000 people a year leave, but in addition to those who leave voluntarily we enforce the removal of about 15,000 others, and that demonstrates that we are very effective. Part of the reason for the measures in the Immigration Bill is to make coming here illegally less attractive. We are also seeking to make it clear that people who come here unlawfully will find it difficult to be able to work; they will not have access to free treatment on the national health service; and they will not be able to have a bank account or a driving licence. In other words, it will be very difficult for them to be here. So it will be both less attractive to come here unlawfully and more attractive for those already here to leave, and the evidence shows that we are making progress on that.

The Bill contains another set of penalty provisions. The first set of penalties are the imprisonment and the fine, which of course are already in legislation. The Bill also proposes provisions on deportation and makes reference to the “public interest”. That doubtless relates to the points that my hon. Friend the Member for Christchurch made about the convention and the public interest test. Immigration legislation already provides for removal powers without the need to pursue a prosecution, so we have not only administration removal powers but deportation powers in criminal cases. Under schedule 2 to the Immigration Act 1971, immigration officers have the power to remove an illegal entrant. An illegal entrant is for these purposes defined as a person unlawfully entering or seeking to enter the United Kingdom in breach of a deportation order or of the immigration laws, or entering or seeking to enter by means which include deception. Unlike with the criminal sanction, there is no requirement for the migrant knowingly to be an illegal entrant. That is important, because it removes a defence which there would be in a criminal case in relation to the person having to know that they were breaching the law. Section 10 of the Immigration and Asylum Act 1999 gives immigration officers a power to remove a person who remains beyond the time limited by the leave—in other words, an overstayer. Once again, for the purpose of removal there is no requirement for the overstaying to have been knowingly committed.

Part I of the 1971 Act sets out the Secretary of State’s power to deport an individual where it is deemed to be conducive to the public good or where there is a court recommendation for deportation, and the UK Borders Act 2007 further sets out that, subject to the exemptions listed, where a foreign national is sentenced to at least 12 months’ imprisonment the Secretary of State must make a deportation order.

That is the point, welcome though it is, that has fallen foul of the provisions of the European convention on human rights. I agree with what my hon. Friend the Member for Shipley said when he expressed frustration about that, but that is why I hope that he welcomes the provisions in the Immigration Bill, which I set out. If he has not looked at them already, I can tell him that we have set out very clearly in them the public interest test. In other words, judges can weigh up the private interests of the people concerned against the public interest test that Parliament will set out, if it passes that Bill. If

17 Jan 2014 : Column 1173

someone is a foreign national offender and they have committed a crime, the normal position is that they will be removed from the United Kingdom.

I think that my hon. Friend will also welcome the fact that the test makes it clear that if someone is here unlawfully or in a precarious immigration position—in other words, they are not here for very long—the court should put very little or no weight on any private or family interests built up during that period. Someone cannot come here unlawfully, create a family relationship and then expect that relationship to count, and to be a way of their avoiding being removed from the United Kingdom. That is very welcome, because I think that most Members, and most members of the public, will have the same view that I do: if someone has committed a serious offence, it is not right that they are able to stay in the United Kingdom because they have created some sort of family relationship while they should not have been here. I think that provision will be very welcome, and I hope that it will receive my hon. Friend’s support.

It is also worth saying that the removal powers that I have set out do not carry an in-country right of appeal before removal can take place. In the Immigration Bill, we propose extending the use of non-suspensive appeals so that we can remove more criminals whose article 3 rights are not engaged—in other words, those who would not suffer torture or worse in the country we are removing them to—before they are able to appeal. They will still have an appeal right, but it must be exercised out of country. My hunch is that appeals will not then take place, because most of those appeals are filed by people to try to delay their removal.

My hon. Friend the Member for Christchurch and other hon. Friends who support the measure are usually assiduous—this is a position that I welcome—and particularly on Fridays in persuading the House, whether by dint of argument or through their use of time, that where legislation is not necessary, it should not be passed by the House. I frequently marvel at their creativity. Sadly, as a Minister, it is an activity in which I am no

17 Jan 2014 : Column 1174

longer able to partake. They give the House many reasons why many Bills which other Members may support should not be put on the statute book.

My plea to my hon. Friend the Member for Christchurch and my other hon. Friends is this. I hope that I have effectively demonstrated, as the hon. Member for Croydon North (Mr Reed) did, that these provisions are already on the statute book and are well supported by members of the public, as one would expect, given that they are sensible measures. Knowing my hon. Friends’ general sense that we should not burden the statute book with unnecessary legislation, I hope that they will acknowledge that the offences are already on the statute book, and will think it not worth troubling Parliament to pass legislation that does not give us any more tools to deal with those who abuse the law.

Finally, I hope that I have demonstrated that this Government, through some of the operational measures we are taking and the provisions in the Immigration Bill, are absolutely determined to address this issue, although we welcome those who come to the country lawfully. The hon. Member for Croydon North was right to put on the record that those who wish to come here lawfully to work, study and contribute to the country, and to pay taxes that make us all wealthier, are very welcome indeed. The Government are absolutely determined that those who have no right to be here or those who abuse our laws should be dealt with.

Having provided that clarity, I hope that my hon. Friend the Member for Christchurch will feel able to tell the House that he does not wish to proceed with the Bill, and I hope that I have not failed to convince him that that is the right course of action.

Mr Chope: I am grateful to the Minister for his thorough response. I shall look at it in great detail, along with the Immigration Bill, which I hope we will be able to discuss on Report sooner rather than later, because it is an important matter for the Government. I am surprised that they have delayed it so long. Taking into account what the Minister has said, I seek the leave of the House to withdraw the motion.

Motion and Bill, by leave, withdrawn.

17 Jan 2014 : Column 1175

Control of Offshore Wind Turbines Bill

Second Reading

2.25 pm

Mr Christopher Chope (Christchurch) (Con): I beg to move, That the Bill be now read a Second time.

We do not have much time to discuss this Bill, but I am delighted that the Minister is on the Front Bench. I hope that, even if he cannot respond today to my points, we will have the chance to discuss these things informally.

On 4 January, an article in the Economist called Rueing the Waves said:

“Unfortunately, offshore wind power is staggeringly expensive. Dieter Helm, an economist at Oxford University, describes it as ‘among the most expensive ways of marginally reducing carbon emissions known to man’”.

Under a subsidy system, which was unveiled in late 2013, the Government guarantee farms at sea £155 per megawatt-hour. That is three times the current wholesale price of electricity, 60% more than goes to onshore turbines and far in excess of the £92.50 available to the new nuclear plant at Hinkley Point. The Bill would restrict those subsidies, along with a lot of other worthwhile things that would be popular with my constituents who are absolutely incensed at the prospect of having the Navitus Bay wind farm set in Christchurch bay, within sight of the cliffs of Christchurch and Highcliffe and within a short distance of a heritage site.

My Bill would also restrict to 100 metres the height of the turbines. At the moment, turbines are proposed in excess of 200 metres—higher than 600 feet—which is more than the height of Beachy Head. It means that they will be seen from tens of miles away, in the same way that one can see the cliffs of Dover from Calais. The turbines will be very visible, and my Bill would restrict their size, number and location.

2.28 pm

The Minister of State, Department of Energy and Climate Change (Michael Fallon): I congratulate my hon. Friend the Member for Christchurch (Mr Chope) on tabling this Bill, which would, as I understand it, restrict the location, the number and the height of wind turbines situated offshore within 20 miles of our coast.

The thrust of this Bill would run counter to our policy of supporting a range of different renewable technologies to increase the part that renewable energy plays in our energy mix. It would also, therefore, run counter to our policy that follows from that, which is that we should offer to offshore wind projects the same type, if not the same price, of strike prices that are on offer to other technologies. My hon. Friend directly referred to the draft heads of terms, the commercial agreements that we have reached with EDF Energy in respect of Hinkley. Of course the final electricity market reform delivery plan that we published in December confirmed a range of strike prices for all the different technologies, including onshore wind, offshore wind, which my hon. Friend wants to restrict, solar power and tidal and wave energy.

Turning specifically to offshore wind, it would not be right for us to restrict the deployment of offshore wind in the way that my hon. Friend suggests.

17 Jan 2014 : Column 1176

2.30 pm

The debate stood adjourned (Standing Order No. 11(2).

Ordered, That the debate be resumed on Friday 24 January.

Business without Debate

Employment Opportunities Bill

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.

Bill to be read a Second time on Friday 24 January.

Extension of Franchise (House of Lords) Bill [Lords]

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.

Bill to be read a Second time on Friday 24 January.

EU Membership (Audit of Costs and Benefits) Bill

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.

Bill to be read a Second time on Friday 24 January.

Asylum (Time Limit) Bill

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.

Bill to be read a Second time on Friday 24 January.

Foreign Nationals (Access to Public Services) Bill

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.

Bill to be read a Second time on Friday 24 January.

House of Lords (Maximum Membership) Bill

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.

Bill to be read a Second time on Friday 24 January.

House of Commons Members’ Fund Bill

Motion made, That the Bill be now read a Second time.

Hon. Members: Object.

Bill to be read a Second time on Friday 24 January.

17 Jan 2014 : Column 1177

HMRC (Company Liquidations)

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

2.32 pm

Robert Neill (Bromley and Chislehurst) (Con): I am grateful for the opportunity to introduce this debate on the behaviour of Her Majesty’s Revenue and Customs in relation to company liquidations. HMRC has cynically abused the system, which is a disgrace to any public Department. HMRC’s behaviour also indicates serious flaws in policy, which I hope Ministers will address.

I am conscious of the fact that HMRC is operationally independent of Ministers, so my fire is not directed at my hon. Friend the Exchequer Secretary; my fire is directed at HMRC officials. There are concerns about individual injustice and about the operation of policy and governance within HMRC, which I submit are found to be woefully lacking on these matters. The concerns stem from an understandable change of policy through which HMRC has, over a number of years, used civil proceedings to pursue allegations of evasion of duty against individuals and corporate bodies. The proceedings frequently involve allegations of fraud that are thought to be more advantageous to pursue through the civil courts, where of course the burden of proof is lower—the balance of probabilities—than for proceedings in the criminal courts, where the Revenue would have to prove the matter to the criminal standard. Dealt with proportionately and properly, I can see that that is a legitimate tool in the box for protecting public revenue. The difficulty is that if it is not used proportionately and properly we do not get the real offenders. That was precisely what happened in the case of a company run by constituents of mine, of my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), who is in the Chamber today, and of my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith). I shall refer to a particular case, but there are general principles too. I am conscious that there are still some matters of litigation, but I do not think I will be trespassing on any of them in what I say about the history.

The case concerns a company called Abbey Forwarding Ltd, a reputable and established bonded warehouse operation that operated in east London from 1971 until 2009. It employed 23 people. The directors were constituents of mine and my right hon. and hon. Friends. In February 2009, Her Majesty’s Revenue and Customs raised assessments against the company for a sum of just short of £6 million, alleging that excise duty had been evaded on the importation of alcohol. They went to an ex parte hearing and successfully applied to have the company placed in provisional liquidation on the basis that there had been participation in what was alleged to be a diversion fraud.

The court appointed Louise Brittain, a senior partner at Deloitte, as the liquidator. She apparently had a great deal of experience in the field, which might be surprising in the light of what comes later, and had been appointed in a number of other liquidations in which the Revenue had been involved. Of course, the Revenue says, “It wasn’t us but the court,” but we know that that is a play

17 Jan 2014 : Column 1178

on words. The appointment was made and she immediately brought proceedings against the directors for breach of fiduciary duty, alleging fraud.

When that had been done the business was shut down with no forewarning, the staff were sacked and the business was effectively run down. The Abbey directors were not present at the ex parte hearing and as they had been dismissed as employees of the company they had no recourse to appeal against the allegations or the assessments, which they have contested from the very beginning. The liquidator, with the connivance of the Revenue, I would say, deliberately sought to shut them out from pursuing any avenue of appeal against those assessments.

It seems to me that the liquidator showed a remarkable lack of interest in pursuing the interests of the company or the creditors, and to that end she embarked on a fire sale of the company’s remaining assets to the extent that vehicles worth £38,000 were sold for £2,000 and alcohol stock worth £30,000 for £1,000. There was intimidating behaviour towards the directors and their families as friends and acquaintances were rung up, including on ex-directory phone numbers, and asked whether they were owed money.

That was all being done in a litigious war of attrition against the directors, funded in effect by the taxpayer as HMRC gave the liquidator indemnity from her legal costs and any damages that might be awarded against her should the directors be successful. That seems to me to be a very questionable use of public money.

Civil proceedings were used to pursue what might have been criminal matters, and two matters of concern arose. The first is the extraordinary conduct of the liquidator, as I have discussed already, and the second is the cynical conduct of HMRC in hiding behind the liquidator when things went wrong. That is exactly what it did. It might be legitimate to use such a device to deal with fraudsters, but my constituents were not fraudsters and were found not to be by the courts. Great care must be taken with the governance of this procedure, as HMRC can end up as judge, jury and executioner.

In this case, the claim was brought in due course on 30 July 2010, nearly a year or so later, before Mr Justice Lewison—now, I think, Lord Justice Lewison—in the High Court. The judge in the High Court dismissed the claims against the former directors in their entirety and said—one might have hoped that this would have sunken in with the Revenue, but it clearly did not—that the liquidator’s case had “crumbled to dust”. That is a very striking phrase. The case was not just thrown out on a technicality; it fell apart at the seams.

The allegation had been that there were 301 transactions amounting to a diversion. It became apparent that there had only ever been evidence of three potential diversions—interceptions, as they were called. As the judge observed, it was an exaggeration of a hundredfold. Even more extraordinarily, it became apparent in subsequent proceedings that the liquidator, Ms Brittain, had been aware of that throughout the 12-day trail, during which she gave evidence under oath, but at no point did she seek to correct the misleading information, despite signing a statement—it had a certification of truth on it—that included the inaccurate figure. She was thoroughly criticised by the judge, and rightly so. She consequently left Deloitte and no longer practises independently without

17 Jan 2014 : Column 1179

supervision. Frankly, she should never be appointed as a liquidator again, because that ineptitude led to serious injustice for my constituents.

Unfortunately, rather than recognising that harm had been done and seeking to rectify it, HMRC sought simply, and disingenuously, to distance itself from the matter, saying, “All that was conducted by the liquidator. We had no more involvement once she had been appointed.” That is betrayed by the facts, even though the assertion is misleadingly contained in a letter sent to my hon. Friend the Member for Old Bexley and Sidcup and myself by Jennie Granger, HMRC’s operations director.

In fact, all the evidence that the liquidator relied upon, including the false allegation of 301 interceptions, came from witness statements provided by HMRC officers. HMRC officers and their representatives attended every single court hearing, and they were in regular correspondence with the liquidator throughout. E-mails that have come into my constituents’ possession indicate a social relationship between some of those officers and the liquidator, which some of us would raise an eyebrow about in a professional context. Against that background, it seems to me that Ms Granger—I do not doubt that she signed the letter in good faith—was seriously misinformed. I hope that my hon. Friend the Minister will ensure that HMRC’s management looks seriously at the conduct of the officials involved.

The situation has now progressed to a stage where all that remains—I will not talk about this, because litigation is ongoing—is a ruination claim brought by the directors against HMRC. Tens of thousands of pounds—the total cost is disputed—have already been awarded, either against HMRC or the liquidator that HMRC is identifying. In other words, the money has come from the public purse.

Some 30 years’ work of my constituents has been destroyed, their workers have lost their livelihoods, and to this day HMRC has sought—happily, unsuccessfully—to obstruct their obtaining a new licence to operate a fresh business and rebuild their lives. A disgraceful vendetta has been carried out against them. It does a public body no good to try then to pretend that that did not happen. I am sorry that my hon. Friend the Minister has to respond to a debate that must be cast in those terms, but my worry is this: what is a legitimate tool to be used that can be discredited if it is not used properly?

There has been a failure ever since this began, which was nearly two years ago, despite a detailed request from my hon. Friend the Member for Old Bexley and Sidcup, supported by me, for the internal report on what happened in the investigation to be published. I hope that my hon. Friend the Minister will ensure that it will be made available. I hope that he will recognise that simply hiding behind the ongoing ruination litigation will lead only to the suspicion that it is a further attempt at delay and backside-covering, to put it bluntly, by those responsible in HMRC. This is not a case of there being a reasonable judgment and things going wrong in the course of litigation; the evidence clearly never justified the allegations made. If that was the case, one hopes that HMRC would say, in a constructive spirit, “We will carry out a full review, and we will be transparent about it and share the results with those who have been wronged as a consequence. We will apologise and ensure that appropriate arrangements for redress, such as there can be, are made.”

17 Jan 2014 : Column 1180

None of that has been forthcoming within, disturbingly, a culture of an unwillingness to engage realistically not only with the directors of the company but with their Members of Parliament. That does no credit to those involved. For the sake of those of us who do not wish the reputation of a public agency such as HMRC to be damaged, I hope that the management of HMRC—who are listening, I trust—will take serious action. Although the Minister does not have operational control, I hope that he will not only do what he can to facilitate ensuring that appropriate meetings take place with my hon. Friends and I, and others, to try to seek a resolution that does not needlessly cost the taxpayer any more money, but give us more detail on the changes in governance arrangements that I am told have taken place within HMRC since this case started.

I would like to say that this is an isolated instance, but I am afraid that other hon. Members have given me examples of a number of other instances where this tool—the use of liquidation to pursue claims—has been used and has been found wanting. Another well-reported case in 2013 led to another High Court judge seriously criticising the way in which HMRC had operated through this procedure. That suggests that problems still arise despite the changes in governance about which we were assured in the letter from Ms Granger.

The only way to reassure people that this will not happen in future is to be up-front about what happened, to make the report available, to make available to everybody the information about the changes in governance, and to instigate the fullest possible review to make sure that the vast majority of honourable and hard-working employees of HMRC do not have their reputations damaged by something that clearly went wrong and that, at the very least, demonstrates a high degree of incompetence. Even worse, it demonstrates a degree of complacency on the part of the senior management of HMRC. It is almost as though they said, “We will not admit that we were wrong. We have deeper pockets than they do. We will put them out of business, in effect, and hope that they go away.” That is what was happening, and they were doing it through the use of public money. That is not a proper and fair means of protecting public revenue.

Against that background, I hope that the Minister will insist that this is investigated within HMRC at the highest possible level. Although he does not have day-to-day operational responsibility, I hope that he will have passed to him the details of what happens, make sure that the details of any review are shared with my constituents and others, and make sure that my hon. Friend the Member for Old Bexley and Sidcup and I are given full details about the changes in governance arrangements so that we can be satisfied that the lessons that have been learned are genuinely acted on. I also hope that the Minister will prevail on those responsible to say that if an error has been made, the best thing to do is to recognise that lessons have been learned, apologise, and move on. None of that has happened so far.

As regards those who have been wronged, there should be a resolution of the claims they are seeking to make. I am not asking for anything as regards what those claims should be, because that is not appropriate in these circumstances. However, there should be a recognition that there needs to be some redress where it is clearly demonstrated that injustice has occurred. The High

17 Jan 2014 : Column 1181

Court judge said that, prima facie, there was a strong case for injustice having been done to my constituents—and, ultimately, HMRC did not appeal his decision.

I hope that the Minister will take on board the fact that I do not raise this issue lightly or with any pleasure, but in the interests of the reputation of the public service, it needs to be addressed with more vigour than it has been so far.

2.48 pm

The Exchequer Secretary to the Treasury (Mr David Gauke): I thank my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) for securing a debate on this matter, which he has raised with me and with HMRC on a number of occasions in the past few years. As he pointed out, I can say the same for my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) and my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), who is here today.

My hon. Friend made his case very powerfully in his capacity as a constituency MP. He also, in many respects, brought to bear on these matters his considerable experience as a barrister, and a criminal barrister at that. He rightly said that I am constrained by the principle of taxpayer confidentiality and the fact that Ministers and politicians do not interfere in operational matters; there is good reason why that is the case. I hope my hon. Friend will forgive me if I am not able to delve too deeply into this particular matter, given the principle of taxpayer confidentiality, although I will say what I can.

I can, however, discuss the use of provisional liquidations, which my hon. Friend has highlighted, and I hope it will be helpful if I do so. Liquidation is a court-driven process that takes time. It can take several weeks after the presentation of a winding-up petition for a liquidator finally to be appointed. Where the company is being controlled by fraudulent individuals, that delay can provide a perfect opportunity for them to destroy the evidence of their fraud and move assets out of the company. In such cases, any creditor, including Her Majesty’s Revenue and Customs, may petition the court for provisional liquidation. This allows the winding-up petition to be presented without any notice to the company. If the court is persuaded of both the company’s insolvency and the potential for fraud, it will appoint a liquidator to take immediate control of the company, its assets and its records. This protects creditors’ interests. The company directors will have a chance shortly afterwards to argue that the company is not insolvent and so should not be wound up. If they succeed, the provisional liquidator is removed. Where there is clear evidence that a company is perpetrating significant tax or duty fraud, HMRC will apply to the court for an order that the company be placed into provisional liquidation, to stop the fraud and recover assets.

Provisional liquidation orders can be made only by the court and HMRC applies to the court only in the most serious of cases, such as alcohol diversion fraud, whereby alcohol is purported to be exported lawfully without payment of duty or VAT to another European Union country but is then diverted unlawfully for consumption in the UK without payment of duty or VAT. The cost to the Exchequer of this type of fraud is

17 Jan 2014 : Column 1182

estimated to be more than £1 billion. Provisional liquidation action stops the fraud continuing, because trade ceases, and allows assets to be recovered. It has also been used in cases of VAT missing trader fraud and ongoing pay-as-you-earn and national insurance fraud in the construction industry.

Provisional liquidation is an exceptional action and it is worth highlighting one or two statistics. In 2009, five provisional liquidations were instituted by HMRC. In 2010, there were just two cases and in 2011 there were four, while 2012 and 2013 had just one case each. In total since 2009, there have been only 13 applications to put companies into provisional liquidation, although in some of the cases, associated companies were liquidated simultaneously. In not one of those cases has any company successfully argued before the court that the provisional liquidation order should not have been made. Although my hon. Friend has raised concerns in this regard, I could, if I were so inclined, quote judges stating that HMRC’s behaviour in respect of bringing a provisional liquidation was entirely reasonable and well-evidenced.

It can take a long time to bring cases to a conclusion, but I am informed by HMRC that it considers that the 13 actions have prevented Exchequer loss of at least £150 million. I would not therefore wish HMRC to restrict its use of provisional liquidations in appropriate circumstances.

Before a case gets to court, HMRC has rigorous internal processes, which include the involvement throughout of an independent governance team that is separate from the case team. The specialist team challenges and considers the available evidence and strategy. It is made up of externally qualified insolvency specialists with a great deal of experience of insolvency matters. During the whole process, legal advice is provided by HRMC internal solicitors and, where appropriate, additional external insolvency specialist solicitors, and the final sign-off is at senior level. I hope that I have given a degree of reassurance about the general use of provisional liquidations.

Returning to the case that my hon. Friends have raised with me on several occasions, I will deal with the specific issue of the internal report referred to by my hon. Friend the Member for Bromley and Chislehurst. He is absolutely right that HMRC promised an internal review of the case. The review will be conducted by people separate from the operations directorate, and they will report to the HMRC commissioners. The litigation is still ongoing, as my hon. Friend has mentioned, so HMRC’s position is that it would be appropriate for the review to consider the entirety of the issue and to take into account the conclusion of the outstanding litigation. HMRC will consequently be able to respond not only on the litigation and court hearings that have already occurred, but on the one last outstanding piece of litigation. It therefore wants to undertake the review only once that point has been reached.

Robert Neill: Will the Minister help me on this point? In correspondence with my hon. Friend the Member for Old Bexley and Sidcup, HMRC indicated that the review had been commenced, but not concluded. My concern is that some factual matters that must be the subject of the review go back to the very early stages of the process, when assessments were raised in February 2009 or not long thereafter. One would obviously hope that investigations into those matters had taken place already,

17 Jan 2014 : Column 1183

while the evidence was still fresh in people’s minds, rather than that they should be reviewed five years or so later. Will the Minister reassure me that work has already started on the review? If he cannot do so today, will he write to my hon. Friends and me about the progress, if not the conclusion, of the review?

Mr Gauke: The best thing that I can do is to take up his invitation to write to him to set out the exact status of the review, the evidence that needs to be assessed and the progress that has been made.

Notwithstanding the outstanding litigation on this matter, may I say to my hon. Friend that I am more than happy to facilitate a meeting of whatever type is

17 Jan 2014 : Column 1184

appropriate so that his concerns can be raised at this stage? As I am sure was his intention, he has put his thoughts and concerns on the record very clearly and powerfully, and I know that HMRC will look at his every word with great care and attention. As I have said, there is a limit to how much I can say about such an operational matter, but I am grateful to my hon. Friend for raising the case. Let me assure him that his concerns will be taken most seriously.

Question put and agreed to.

2.59 pm

House adjourned.