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House of Commons

Tuesday 1 March 2016

The House met at half-past Eleven o’clock


[Mr Speaker in the Chair]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Oil and Gas Industry

1. Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP): What fiscal steps he is taking to support the oil and gas industry. [903815]

The Exchequer Secretary to the Treasury (Damian Hinds): This Government are clear that the broad shoulders of the United Kingdom are 100% behind our oil and gas industry and the thousands of families it supports. Last March, my right hon. Friend the Chancellor announced a wide-ranging fiscal package, including reducing the headline rates of tax and a new investment allowance, further expanded at the summer Budget to drive investment and support maximising economic recovery.

Stuart Blair Donaldson: Oil and Gas UK has highlighted that headline tax rates of 50%, or 67.5% for companies paying petroleum revenue tax, are no longer sustainable. As the UK continental shelf enters an new, ever more mature phase, and the oil price remains lower for longer, the fiscal burden needs to reflect these changing circumstances and to be permanently reduced. Will the Government listen to the industry, and what fiscal support will they bring forward for the oil and gas industry in this year’s Budget?

Damian Hinds: In the “Driving investment” paper, the Government absolutely recognise the need over time to change the fiscal structure. The scale of what my right hon. Friend did reflects the fact that the figure stood at £1.3 billion. The most recent of the headline tax reductions took effect on 1 January this year.

Peter Aldous (Waveney) (Con): I echo these points. The North sea oil and gas industry is facing very serious challenges at this time. Working with the industry and the Oil and Gas Authority, the Treasury can help to overcome the problems. May I urge the Minister to include in the Budget tax-cutting initiatives and support that build on last year’s measures and help to attract investment to this basin and to ease the worries of many very worried people?

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Damian Hinds: My hon. Friend highlights the fact that many jobs supported by the sector are in England as well as in Scotland. I commend the work he has been doing with New Anglia local enterprise partnership on supporting companies that have found themselves in difficulties, working particularly on skills and so on. I assure him that we continue to listen to the industry, to the Oil and Gas Authority, to Oil and Gas UK, and to many individual companies to see what more can be done to support this vital sector.

Mary Glindon (North Tyneside) (Lab): OGN in North Tyneside has now shed all its 2,000 jobs. The company has been in touch with the Government to ask for help with a rather difficult contract to develop wind farms, but as yet has heard nothing about any help that can be given. Will the Minister see whether there is going to be any help, or will he meet me and representatives of OGN for the sake of these jobs?

Damian Hinds: I thank the hon. Lady. I would of course be very happy to meet her and the company to see what proposal it would put forward.

Kevin Hollinrake (Thirsk and Malton) (Con): An application for shale gas exploration in my constituency may result in many millions of pounds in community benefits. Does the Minister agree that those community benefits should go to the communities most affected by development?

Damian Hinds: My right hon. Friend the Chancellor has said that the shale wealth fund could deliver up to £1 billion of benefits to communities hosting shale gas development. This is in addition to the existing industry scheme. My hon. Friend is entirely right that it is important that communities see those benefits and have the reassurance of additionality.

European Union

2. Dr Roberta Blackman-Woods (City of Durham) (Lab): What recent assessment he has made of the potential effect on the economy of the UK leaving the EU. [903816]

12. Nic Dakin (Scunthorpe) (Lab): What recent assessment he has made of the potential effect on the economy of the UK leaving the EU. [903826]

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): My responsibility as Chancellor is for jobs, livelihoods and living standards. It is clear to me that a UK exit from the EU would be a long, costly and messy divorce that would hurt all those things. We have already seen sterling fall, and yesterday HSBC predicted a further 15% to 20% slump in the event of a vote to leave. The finance Ministers and central bank governors of the G20 concluded at the weekend that a British exit would cause an economic shock not just to the UK but to Europe and the world. What people are asking for in this referendum campaign is a serious, sober and principled assessment from the Government setting out the facts. I can announce today that the Treasury will publish before 23 June a comprehensive analysis of our membership of a reformed

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EU and the alternatives, including the long-term economic costs and benefits of EU membership and the risks associated with an exit.

Dr Blackman-Woods: Given that up to 140,000 jobs and half of the north-east region’s exports rely on Britain’s membership of the European Union, does the Chancellor agree with me and the majority of members of the North East chamber of commerce that an exit from the EU would be extremely damaging for north-east economic growth and regeneration?

Mr Osborne: Yes, I agree with both the hon. Lady and businesses in the north-east. Of course, the north-east has thrived by attracting big inward investment for car manufacturing and train manufacturing, most recently in Newton Aycliffe. One of the things that those who are advocating exit from the EU have to answer is what the alternative arrangement is for, for example, a large car factory in north-east England. Could it export its cars to mainland Europe without tariffs? It is not obvious that it is possible to do that without paying towards the EU budget and accepting the free movement of people.

Nic Dakin: Will the UK steel industry have a brighter future if we remain in the EU or if we leave the EU?

Mr Osborne: I believe that the best way to help the UK steel industry is both to take action at home and through being part of a large economic bloc—in other words, the European Union—raising our concerns about, for example, Chinese steel dumping. Frankly, when we make that argument with China, our voice will be amplified if we make it as part of the EU as opposed to making it alone.

Mr Andrew Tyrie (Chichester) (Con): In the event of a no vote, the Government have committed themselves to triggering article 50 straight away. I cannot see the point of that. Why do not the Government give some time between a no vote and the triggering of article 50, to enable a discussion to take place with counterparties and see the extent to which good faith could be established with the countries of the European Union? It seems illogical to restrict ourselves in that way.

Mr Osborne: It is not illogical that if the country votes to leave, we leave the European Union. That is the choice for the people of this country. The only available mechanism is the triggering of article 50, which gives a two-year time limit. Of course, we would try to negotiate in good faith and an extension can be achieved, but only with the consent of 27 other nations. People need to be aware that there are not going to be two referendums. It is decision day on 23 June. People need to choose and I think that voting to remain in the EU is the best outcome for our economic and national security.

Mr Steve Baker (Wycombe) (Con): Is it not extraordinary that the Chancellor asked the G20 to make that statement, and is it not the case that he made that request so that it could tee up this element of “Project Fear”?

Mr Osborne: The idea that the US Treasury Secretary, the head of the International Monetary Fund and, indeed, the Governor of the Central Bank of China dance to a British tune is, I am afraid, fanciful. Governors

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of central banks and the Finance Ministers of the G20 are saying the same thing as every major independent economic institution: that a British exit would cause an immediate economic shock and have longer economic costs. I totally understand why many of the people advocating exit want to do so, but, to be frank, they accept that there would be a short-term and potentially long-term economic cost. We should have that on the table, which is why the Treasury is going to produce its analysis.

Rob Marris (Wolverhampton South West) (Lab): Despite the recent gulag debacle, does the Chancellor agree that UK membership of the European Union should make it easier to clamp down on immoral tax avoidance by multinational companies?

Mr Osborne: I know that Russia Today is the favoured channel of the Labour leadership, but this is Treasury questions. We are raising with the European Union—this is another example of where being part of a bigger club helps—the possibility of getting a pan-European agreement for country-by-country public reporting so that we can see what multinational companies are paying in different countries. Of course, our ability to achieve that is amplified by being part of the EU.

Mr Jacob Rees-Mogg (North East Somerset) (Con): If my right hon. Friend’s rather apocalyptic view of our leaving the European Union is correct, was it not irresponsible and inaccurate of the Prime Minister to say that he ruled nothing out prior to the completion of the most unsatisfactory renegotiation?

Mr Osborne: We have secured a renegotiation that I think addresses the principal British concerns about our membership of the European Union, and now we can advocate membership of this reformed EU. I think we will be stronger, safer and better off in that European Union.

19. [903834] Margaret Greenwood (Wirral West) (Lab): Between 2007 and 2013, more than 8,000 businesses in the north-west were able to start up, thanks to EU funding. I welcome the Chancellor’s comments this morning about the analysis that he will put forward before 23 June. Will that include specific detail about the impact of leaving the EU on the economy of the north-west?

Mr Osborne: I am happy to take on board the hon. Lady’s request about the impact that an exit would have on the north-west of England. I am a north-west MP, and I know that many businesses in the north-west have access to that big free trade single market, which is the largest market in the world. All the alternatives on offer, whether we go for the approaches taken in Norway, Switzerland, Canada or the World Trade Organisation—of course, those who advocate withdrawal have not been able to settle on one approach—would involve some kind of barrier to entry, or we would have to pay into the EU budget, as Norway does, and accept free movement of people, which is one of the complaints about EU membership. Examining the alternatives, as we will do in the coming days, will throw a spotlight on the choice facing the country.

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Mr Nigel Evans (Ribble Valley) (Con): Should the British people decide to vote leave on 23 June, what arguments would the Chancellor deploy on 24 June in favour of the United Kingdom to attract investors and encourage them to invest in the United Kingdom rather than in other countries in Europe?

Mr Osborne: I will always fight, and the Government will always fight, for the best interests of the United Kingdom, and we will do whatever we can in response to the verdict of the people. My recommendation, and the recommendation of the British Government, is that we are better off in the reformed EU—

Mr Evans: I did not ask that.

Mr Osborne: The point I make to my hon. Friend is that, of course, we will have to handle the situation if the British people choose to exit, and I would always want to stress that we are a great country to invest in, but I think that that argument will be weaker if we are not in the EU.

Mr Speaker: We are deeply grateful, but we must try to attend to the questions asked, and to do so in a timely way, because progress is desperately slow. Members can do better than that, one would hope.

Chris Leslie (Nottingham East) (Lab/Co-op): Would there not be a double whammy if Britain left the EU? First, there is the widely predicted risk of depreciation, which will lead to higher interest rates. Secondly, any notion that our exporters would benefit from a cheaper pound is more than offset by the additional tariff barriers that those firms would encounter worldwide.

Mr Osborne: The former shadow Chancellor is right to point to both the immediate economic shock, which I think is generally accepted—even those who advocate withdrawal, for perfectly honourable reasons, accept that there would be an immediate economic dislocation—and the longer-term costs. If we tell Britain to make this leap in the dark, we have to be able to answer the question: what is the alternative? How do we reassure the car manufacturer in north-east England that tariffs will not be imposed on its cars, as a result of which it will not be so competitive and there will not be so many jobs in its factory? Those are the questions for this big national debate.

Andrew Bridgen (North West Leicestershire) (Con): Those who wish us to stay in the European Union say on the one hand that we are an insignificant economy and too small to stand on our own, but on the other hand that if we leave the European Union it will cause an economic meltdown around the world. They cannot both be true, Chancellor.

Mr Osborne: Our argument is that we will be stronger and better off inside the European Union. That is the positive choice that we face as a country. I, personally, do not think that we should leave the EU, but even those who contemplate leaving the EU should think about this. With the economic situation that the world faces at the moment, and with the geopolitical situation that we face in Europe with Putin on our doorstep and the crisis in the middle east, is this the right moment to

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leave? My strong advice, the advice of the British Cabinet and the advice of the British Government is that we remain in this reformed EU.

Stewart Hosie (Dundee East) (SNP): The Scottish First Minister Nicola Sturgeon was in London yesterday making the case for the UK to remain in the EU. She made the point that access to that market supports some 300,000 jobs in Scotland and some 3 million jobs in the UK. May I ask the Chancellor to agree with me—I am sure he will—that in terms of EU membership, trade deals are easier to agree as a bloc, harmonised regulation helps businesses to export and, notwithstanding the fact that improvements can always be made, being a member of the EU benefits consumers as well?

Mr Osborne: I agree that Scotland benefits from both being part of the United Kingdom and being part of the European Union. The hon. Gentleman is right to highlight the fact that EU agreements on things such as air travel and mobile phone charges have reduced costs for consumers. It is also the case that a depreciation in sterling leads to increased inflation.

Stewart Hosie: The extent to which the EU has succeeded is actually quite remarkable in terms of free trade, free movement—we think it is a boon—and, indeed, the commensurate protections for the environment, social protection and employment rights. These substantial achievements of the European Union are to be celebrated, not renounced. That is the positive case we are making. May I urge the Chancellor and his right hon. Friend the Prime Minister to make a positive case, because the in campaign does not have a 20-point lead to squander with a negative campaign?

Mr Osborne: I am making the positive case that we will be stronger, safer and better off, which are all positive outcomes for our country, and I am pointing out that there are question marks over the alternatives. It is perfectly reasonable to point out that we do not know what the leap in the dark would entail, but of course I want to do this in a positive way. There is a healthy debate across our political system as well as across our country, but I take the view of Ronald Reagan’s 11th commandment, which is that “I won’t speak ill of a Conservative.”

National Living Wage

3. Royston Smith (Southampton, Itchen) (Con): What assessment he has made of the potential effect of the national living wage on wage growth. [903817]

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): The national living wage will mean that a full-time minimum-wage worker benefiting from the policy will earn over £4,000 more by 2020 in cash terms, a rise of more than 35%. Due to the ripple effects on those on higher incomes, up to 6 million workers will benefit. The national living wage will drive up productivity; it will make sure that work pays; it is progressive and fair; and I am proud it is being introduced by a Conservative Government.

Royston Smith: I thank the Chancellor for his response. I am delighted that the national living wage will come into force from 1 April because Southampton has a

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high number of low-paid workers, which this policy addresses. What assurances can my right hon. Friend give my constituents that their jobs will be protected as a consequence of this wage rise and a strong local economy?

Mr Osborne: The assurance I can give is that, alongside the national living wage, we have cut taxes for businesses so that they have more money to invest in their workforce. We have introduced and increased the employment allowance, which helps small businesses in particular. I introduced that increase at the same time as announcing the national living wage. We are of course making big investments in the Southampton economy so that it is a great place to grow a business and employ people. All those things will help the hard-working people my hon. Friend represents so well.

Alison McGovern (Wirral South) (Lab): Wage growth matters, but surely it is the bottom line of your payslip that really counts. That is why the Chancellor is wrong to say that this is progressive. The Resolution Foundation has found that, over the next Parliament, those in the top half of our income distribution will benefit more than those at the bottom. How can the Chancellor say that what he has done will help those with the least?

Mr Osborne: The hon. Lady seems to be opposing the national living wage. I think it is a progressive policy. Indeed, it was based on work by the Resolution Foundation. If you want a regressive policy, I will give you one. How about increasing the basic rate of income tax? That is what the Labour party is proposing in Scotland—the first sign of what an economic policy would look like under this new Labour leadership. How can an increase in the basic rate of income tax, which would hit people earning over £11,000, be remotely progressive or fair?

22. [903838] Nigel Huddleston (Mid Worcestershire) (Con): Most businesses, as well as workers, in my constituency warmly welcome the introduction of the national living wage and the increased spending power it will deliver. Will the Chancellor and his team carefully monitor the implementation of the national living wage to see whether there are any unintended consequences, particularly in sectors where margins are already small, such as farming, social care and hospitality?

Mr Osborne: We will of course monitor the impact of all our policies on the economy and on particular sectors. That is one of the reasons why, alongside introducing the national living wage, we have introduced the new council tax supplement for the social care sector. The Office for Budget Responsibility analysis when we announced the national living wage was that, while in theory 60,000 jobs could be lost in the future that might otherwise have been created, the other policies we were pursuing would see over 1 million new jobs created, so the overall effect is an increase in employment of over 1 million.

Ms Margaret Ritchie (South Down) (SDLP): How can the Treasury ensure that employers do not reduce the hours of work of their employees, many of whom are in receipt of low incomes?

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Mr Osborne: Many employer organisations and businesses have welcomed the national living wage, and many studies suggest that having a higher floor for wages drives up productivity, which, as the hon. Lady will know, is one of Britain’s great economic challenges.

Charter for Budget Responsibility

4. Mark Garnier (Wyre Forest) (Con): What progress has been made on implementing the charter for budget responsibility. [903818]

The Chief Secretary to the Treasury (Greg Hands): As part of our long-term economic plan, the Government’s charter for budget responsibility was approved by Parliament on 15 October 2015. The charter sets a path to this country’s long-term financial health and to a surplus. Unlike other parties in this House, we will be strong and consistent in our support for the charter. The Budget is on 16 March.

Mark Garnier: In 2010, the budget deficit stood at 11.1% of GDP. This year, it is set to be down by two thirds at 3.9% of GDP, which is a remarkable achievement given the economic headwinds coming from outside the UK. Will my right hon. Friend tell the House what discussions he is having with other parties, in particular those on the shadow Front Bench, about how to reduce the budget deficit and turn it into a surplus, and are they proving to be helpful?

Greg Hands: I thank my hon. Friend for his support for our budget reduction efforts. I have had no such discussions so far, nor any submissions from those on the Opposition Front Bench. I have, however, received a submission from Ed Balls’s former head of policy, Karim Palant, who said of the shadow Chancellor’s changing position on the charter:

“This kind of chaos less than a month into the job is the kind of blow even significant political figures struggle to recover from.”

Rachel Reeves (Leeds West) (Lab): I agree that we need to reduce the debt and the deficit, but with interest rates at record lows and the International Monetary Fund forecasting that public and private investment will fall from 30th to 31st in the OECD league table, should we not be taking advantage of low interest rates to invest in our creaking infrastructure, airport capacity, road and rail, and flood defences?

Greg Hands: I welcome the hon. Lady’s support for deficit reduction. It is good to have her back. I must remind her, however, that in the last Parliament she voted against virtually every single deficit reduction measure the Government took. We have a big programme of infrastructure investment worth £100 billion over the course of this Parliament, which includes transport infrastructure and other measures that will help her constituents and people across the country.

Jeremy Quin (Horsham) (Con): As the IMF has just been mentioned, does the Chief Secretary agree that its statement last week that we have

“delivered robust growth, record high employment, a significant reduction in fiscal deficits, and increased financial sector resilience”

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is all good news that we should be welcoming? There is more to be done and I wonder whether he is looking forward to the pearls of wisdom that might come from the Opposition, now that they have the benefit of Mr Varoufakis.

Greg Hands: The IMF has been clear in its endorsement of the charter for budget responsibility:

“The transparency of the new rule—with a focus on headline balances and a simple and well-defined escape clause in the event of very low growth—is welcome.”

It goes on to commend us on having the “appropriate level of flexibility” in the charter. In respect of any external advisers that are taken on by the Labour party, it would appear from this morning’s The Sun that Labour MPs are extremely unhappy—

Mr Speaker: Order. Sit down. It is a terrible waste of time—long-winded, boring and unnecessary.

John McDonnell (Hayes and Harlington) (Lab): In the debates at the time of the charter, I and many others warned the Chancellor of the potential impact of global adverse headwinds. The Chancellor responded by boasting

“of having an economic plan that actually produces better results than were forecast”.—[Official Report, 25 November 2015; Vol. 602, c. 1385.]

Since then, we have seen business investment fall, his export target recede into the distance, the trade deficit widen, manufacturing and construction enter recession, and the biggest productivity gap for a generation. Last week, to crown it all, the Chancellor told us the economy is smaller than we thought. I say to him that if his economic plan is now producing worse results than forecast, imposing more stealth taxes and cuts in the Budget will only—[Interruption.]

Mr Speaker: Thank you. We need a question mark. [Interruption.] Order, order. I said what I said because Ministers are responsible for answering for Government policy, not that of the Opposition. People who ask questions, be they from the Front or the Back Bench, must do so pithily. A pithy reply, Chief Secretary.

Greg Hands: All forecasts at the moment still show the UK performing extremely well, with strong rates of growth compared with other G7 countries. The Chancellor was right to say over the weekend that we may need to undertake further reductions in spending because this country can afford only what it can afford. He went on to say:

“I’m absolutely determined that first and foremost in this uncertain time we have economic security. That’s what people rely on.”

I am equally clear that it would be a fundamental disaster for this country if we pursued the policies that the hon. Member for Hayes and Harlington (John McDonnell) has been promoting in the six months that he has been shadow Chancellor.

John McDonnell: Can we address one of the domestic threats to our economy? This week the former Governor of the Bank of England warned that bankers have not learned the lessons from 2008, and without reform of the financial system, another crisis is certain. Will the Chancellor take responsibility for the domestic

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vulnerabilities within our economy that have built up under his watch? Will he withdraw his proposals to water down the regulatory regime for senior bankers?

Greg Hands: I remind the shadow Chancellor that, over the past five and a half years, this Government have been fixing the problems in our banking system, after the poor regulation and tripartite regime that we inherited from the previous Government. We have been taking action. On economic policy, I just have to look around at the Labour party and see what kind of reactions there are.

Mr Speaker: Sit down. This is about Government policy, and progress is slower than at previous Treasury questions. The Minister should try to stick to Government policy, upon which briefly he can, and should, speak.

First-time Homebuyers

5. Huw Merriman (Bexhill and Battle) (Con): What fiscal steps he is taking to help first-time homebuyers.

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): The Government want to make home ownership a reality for as many people as possible, which is why we are building 400,000 new homes and have extended Help to Buy. Our new Help to Buy ISA, launched a year ago at the Budget, is already being used by almost one third of a million families to save for their first home—confirmation that the Conservative Government are on the side of home ownership.

Huw Merriman: Recent figures show that 82% of buyers who used Help to Buy would not have been able to buy their home without that scheme. Does my right hon. Friend agree that the Conservatives are helping hard-working people to realise their dreams of home ownership? Is he aware of alternative economic policies and the risk that they pose to families in my constituency?

Mr Osborne: My hon. Friend is right, and 130,000 people have made use of our Help to Buy scheme, which has helped people in his constituency and elsewhere to get on the housing ladder. At the same time, we are seeking to increase supply by building more homes for people to buy. First-time buyers were down by more than 50% under the previous Labour Government, but they are up by 60% with us.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): The Chancellor makes great claim for his policy, but in inner-London in my constituency, housing is a real crisis. This morning I met the head of our clinical commissioning group. We have a crisis in GP recruitment and in hospital doctor appointments. Even highly paid doctors cannot afford to get on the housing ladder in my constituency, and that is causing a crisis in public services. What will he do about that?

Mr Osborne: We are doing two things about that. First, we are building more homes in London than were ever built under the previous Labour Government, and we have also just introduced Help to Buy London, so that we help Londoners deal with the very high cost of housing in the capital.

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Seema Malhotra (Feltham and Heston) (Lab/Co-op): After six years as Chancellor, will the right hon. Gentleman confirm whether home ownership went up or down between 2010 and 2015?

Mr Osborne: When I first became Chancellor we were in the aftermath of a collapse in the housing market, so it took a couple of years to get house building going again. House building starts are now up, and the number of first-time buyers has risen by 60% since I became Chancellor. It was down by 50% under the last Labour Government.

Seema Malhotra: There you have it, Mr Speaker. We know from the English housing survey that 201,000 fewer households owned a home in 2015 than five years ago, compared with an increase of 1 million under Labour. By 2025, nine out of 10 Britons under 35 on modest incomes will not be able to afford a home. Rents in the private sector are soaring, and the housing benefit bill is likely to be £350 million more than the Chancellor forecast last year. Is his record on housing investment one of failure, with British families now literally paying the price?

Mr Osborne: Housing starts are higher than they were when I became the Chancellor, but what people need—homeowners or people who are building houses—above all is economic security, which is what the Government are seeking to deliver. Frankly, the fact that the Labour party is now getting its advice from Yanis Varoufakis and the revolutionary Marxist broadcaster Paul Mason does not suggest to me that it has an answer to economic security. Presumably Labour chose those two because Chairman Mao was dead and Micky Mouse was busy.

Tax Disputes

6. Neil Gray (Airdrie and Shotts) (SNP): What support his Department provides for British citizens involved in tax disputes with other countries. [903820]

The Financial Secretary to the Treasury (Mr David Gauke): Tax treaties provide protection for UK citizens from discriminatory taxation in other countries. The UK has one of the largest treaty networks, with more than 120 treaties in force. Her Majesty’s Revenue and Customs cannot intervene where a taxpayer is in dispute with a foreign revenue authority on a domestic issue. However, where a UK resident believes that a treaty partner is not applying the treaty properly, they can request HMRC to raise the issue with the other revenue authority.

Neil Gray: I thank the Minister for that helpful answer. My constituent David Duncan is currently being pursued by HMRC’s mutual assistance in the recovery of debt team for a tax payment relating to a time when he was residing in Germany but working in South Korea. Mr Duncan had been assured by his employer that he would have to—

Mr Speaker: Order. I am sorry but this is just too long. This is a story, not a question. One sentence. What is it?

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Neil Gray: Will the Minister advise on what help is available to my constituent at this time in dealing with and resolving that issue between Germany and South Korea?

Mr Gauke: As I said in my answer, it depends on the nature of the dispute, but if the hon. Gentleman wishes to write to me, I will look at it and get back to him.

Mr Speaker: Thank you.

Spirits Duty

7. Mr Alistair Carmichael (Orkney and Shetland) (LD): What assessment he has made of the effects on the economy of the reduction in duty on spirits announced in the 2015 Budget. [903821]

The Exchequer Secretary to the Treasury (Damian Hinds): The 2% duty cut at the March Budget 2015 continues to support the 296,000 people across the sector, including such distilleries as Highland Park in the right hon. Gentleman’s Orkney and Shetland constituency.

Mr Carmichael: The Minister will recall that, last year, the Red Book estimated that the cuts in alcohol duties would lead to a reduction of £185 million in revenue. In fact, from April 2015 through to January 2016, we have seen a £190 million increase in revenues. Will he therefore look very carefully at the request from the Scotch whisky industry for a further 2% cut in spirits duties this year?

Damian Hinds: I know how much the sector values the cut in the duty—it was the first since 1996—and it is great to see the industry in good health, with the number of distilleries and exports to other parts of the world growing strongly. I have received representations from the Scotch Whisky Association among others in relation to the upcoming Budget.

Mr Speaker: On spirits, Mr Andrew Griffiths.

Andrew Griffiths (Burton) (Con): Any changes or reductions in spirit duty will impact on the market for other drinks, such as beer. I draw the House’s attention to my entry in the Register of Members’ Financial Interests, but this Government and this Chancellor scrapped Labour’s hated beer duty escalator and cut beer duty three times, which led to more beer sales and more revenue for the Treasury, and which saved hundreds of pubs. Will he continue that support in future?

Damian Hinds: My hon. Friend speaks in exactly the right spirit. He is the representative of Burton, the home of beer, and nobody has done more to advocate for that important British industry. The Budget is on 16 March. My right hon. Friend the Chancellor makes any and all changes to any duties at such fiscal events.

Margaret Ferrier (Rutherglen and Hamilton West) (SNP): Scotch whisky is the biggest net contributor to UK trade in goods. Without it, the UK’s trade deficit would be 11% larger. Manufacturers across Scotland, including Spey in my constituency, that have experience of exporting know that domestic rates of tax have an

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impact on the attitude of international markets. What consideration has the Chancellor given to industry calls to reduce the excise in the upcoming Budget?

Damian Hinds: My right hon. Friend the Chancellor is always very alive to representations from the Scotch whisky industry. Of course, that product accounts for some 25% of UK food and drink exports. Japan has been a strong export market for the sector, but others have not worked out so well. We continue to listen to what that important sector has to say.

Employment Trends

8. Alex Chalk (Cheltenham) (Con): What assessment he has made of recent trends in the level of employment. [903822]

The Chief Secretary to the Treasury (Greg Hands): The employment level stands at 31.4 million, which represents more people in work in the UK than ever before. In the past year, employment growth has been driven by full-time workers and by high and medium-skilled occupations. That demonstrates that we are now moving into the next phase of our recovery, with high-quality employment helping to boost productivity and raise living standards across the country.

Alex Chalk: The number of people in my constituency relying on key out-of-work benefits has fallen by more than 70% since 2010. Does the Minister agree that continuing to invest in GCHQ is key to safeguarding that progress, as it supports the high value cyber-jobs in the state sector and, crucially, the civilian sector?

Greg Hands: The Chancellor announced in the spending review that we would be investing more in cyber and that Cheltenham would see those benefits. My hon. Friend is right to praise the employment picture and performance in Cheltenham. It has seen more than 4,000 people get into work, as well as 3,000 fewer people in unemployment. Across the UK as a whole, the Office for Budget Responsibility forecast an increase in employment of 1.1 million over the course of the Parliament.

15. [903829] Dawn Butler (Brent Central) (Lab): Christians Against Poverty has found that 72% of people on prepayment meters, who are often working, fall behind in their council tax and other bills. What assessment has been made of the impact of this kind of tariff on household debt?

Greg Hands: We monitor household debt on an ongoing basis. If the hon. Lady has specific cases she would like to show me, I am sure we could look at them and pass them on to the Department for Work and Pensions and others. I have to say, however, that overall the employment picture remains extremely strong. We have an employment rate of 74.1%. Since the first quarter of 2010, the UK employment rate has grown more than in any other G7 country.

Michelle Donelan (Chippenham) (Con): What more support, pension-wise, can the Chancellor give to the self-employed? Recent trends suggest that in five years’ time 4.7 million British people will be self-employed and will not benefit from auto-enrolment.

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Greg Hands: My hon. Friend raises a very interesting point. Helping the self-employed is one of the Government’s key priorities. We will have to see what is in the Budget on 16 March.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Is the Minister aware that I, like many Members, represent a university town? The university is one of the best and biggest employers in my constituency. Universities up and down the country are terrified of our leaving the EU. Our universities receive the most money for research and collaboration of any country in the EU. They will be destroyed by leaving the EU.

Greg Hands: I join the hon. Gentleman in campaigning for the UK to remain a member of the EU. That is the right thing for us to do both for the public finances overall and for the future of the UK economy, as the G20 communiqué made clear over the weekend. It may well have an impact on the university sector, too. I am sure that that will be one of the questions featured in the forthcoming debate leading into the referendum.

Equitable Life

9. Mr Laurence Robertson (Tewkesbury) (Con): If he will reopen the compensation scheme for Equitable Life policyholders. [903823]

The Economic Secretary to the Treasury (Harriett Baldwin): The Equitable Life payment scheme has now successfully traced and paid 90% of eligible policyholders. Payments to with-profits annuitants will continue for the life of these annuities. The scheme is now closed to new claims.

Mr Robertson: I thank the Minister for that response, but given that many policyholders lost out because of a failure of regulation, which should be overseen by not just this Government but any Government, is it not fair that those policyholders should receive compensation? If they do not, how can any investor have any confidence in the regulatory system that is put in place?

Harriett Baldwin: The Chancellor has done more than anyone else to tackle the regulatory failure of the 1990s with regard to Equitable Life. For example, with-profits annuitants will receive full compensation for the life of the annuity, pre-1992 annuitants have received ex gratia payments of up to £10,000, and £775 million has been paid out tax-free to others, despite the constrained public finances. Those on pensions credit got a doubling of their payment just before Christmas.

John Pugh (Southport) (LD): Will the Minister clarify how much of the £1.5 billion promised by the Government has been delivered and handed over?

Harriett Baldwin: I regularly update Parliament on the precise figures. So far, we are at almost £1 billion. Of course, the payments for the annuitants will continue for the rest of their lives.

Small Businesses

10. Neil Carmichael (Stroud) (Con): What fiscal steps he is taking to encourage small businesses to grow. [903824]

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The Financial Secretary to the Treasury (Mr David Gauke): The Government are cutting taxes to encourage small businesses to grow. Corporation tax will fall to 19% in 2017 and 18% in 2020—the lowest in the G20. The employment allowance will rise by 50% this April, giving employers a £3,000 discount on national insurance contributions, and the Seed enterprise investment scheme supports investment in small, early-stage companies, helping more than 2,900 companies to raise over £250 million.

Neil Carmichael: Does the Minister agree that that impressive package for small businesses will equip them to benefit from the extension of the single market as negotiated by the Prime Minister, including in energy and services, and that this provides an even more emphatic case to remain in the European Union?

Mr Gauke: There are nearly 100,000 firms employing fewer than 50 people that export goods to the European Union, and we want to assist them. Access to the single market is very important to those businesses and the 800,000 people they employ.

Richard Burgon (Leeds East) (Lab): The plans to move towards quarterly online tax reporting are proving to be deeply unpopular with small businesses, so will the Chancellor confirm the impact on administration costs for small businesses of the Government’s plans for quarterly reporting to Her Majesty’s Revenue and Customs?

Mr Gauke: Overall, the Government are clear that HMRC’s target is to reduce the burden on businesses by £400 million by the end of this Parliament. Moving towards a digital taxation system is something that can help businesses to reduce their costs. We are consulting on the details, but let me make it absolutely clear that there will be no quarterly tax returns, as it has been wrongly reported that there will be in some cases.

Mr Speaker: I call Stella Creasy. Not here.

Taxation of Earnings

13. Jack Lopresti (Filton and Bradley Stoke) (Con): What fiscal steps he is taking to help people keep more of their earnings. [903827]

The Financial Secretary to the Treasury (Mr David Gauke): The Government have committed to raising the personal allowance to £12,500 and the higher-rate threshold to £50,000 by the end of this Parliament. At the summer Budget, the Government took the first steps towards meeting these commitments by increasing the personal allowance to £11,000 and raising the higher-rate threshold to £43,000 in 2016-17. Twenty-nine million people will pay less tax after these changes and 570,000 will be taken out of income tax altogether.

Jack Lopresti: Does the Minister agree that it would be better to encourage savings by allowing people to keep more of their own money by increasing the tax limit on pensions rather than reducing it, particularly at a time when savers are struggling to get decent returns?

Mr Gauke: As a Government, we want to encourage more saving. We have taken steps to reform our tax system so that pensions become more attractive, but we also need to ensure that the costs of pension tax relief are targeted in the right direction.

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14. John Mc Nally (Falkirk) (SNP): What steps he is taking to improve productivity in the UK. [903828]

The Chief Secretary to the Treasury (Greg Hands): The Government have published their productivity plan, “Fixing the foundations: Creating a more prosperous nation”. This plan outlines the steps we are taking to encourage further investment in the drivers of productivity growth, including science, education, skills and infrastructure. It also sets out the way in which the Government are promoting a dynamic economy through reforming planning laws, boosting competition and creating a northern powerhouse.

John Mc Nally: According to the latest figures from the Office for National Statistics, UK productivity measured by output per hour is now 18 percentage points below the average of the rest of the G7 economies—the widest gap since records began. Why is productivity deteriorating under this Chancellor?

Greg Hands: I do not accept that. We accept that productivity is a problem, but productivity output per hour is now 0.7% higher than its pre-crisis peak. Productivity is improving at the moment. Clearly, we need to do more, which is why we have laid out a national productivity plan with a set of key targets in key areas such as research infrastructure by creating the National Infrastructure Commission, cutting corporation tax and doing a lot more besides.

Topical Questions

T1. [903805] Kirsten Oswald (East Renfrewshire) (SNP): If he will make a statement on his departmental responsibilities.

The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne): The core purpose of the Treasury is to ensure that the economy is stable and prosperous.

Kirsten Oswald: Has the Chancellor had a chance to read last week’s National Audit Office report on financial services mis-selling? Does he agree that it draws attention to a missed opportunity to deliver a financial advice sector that protects small-scale investors when things go wrong, as they did in the case of the Connaught fund, with devastating results for a number of my constituents?

Mr Osborne: We have sought to increase consumer protection by introducing a powerful new consumer protection agency in the form of the Financial Conduct Authority, and we have sought to give more financial advice to individuals through, for instance, the Money Advice Service and Pension Wise. However, if the hon. Lady has any specific further ideas that we can consider, I shall be happy to do that.

T3. [903807] Mrs Flick Drummond (Portsmouth South) (Con): The Government are making some of the biggest investments in road and rail in our nation’s history. Is my right hon. Friend aware of any alternative investment

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policies, and of the impact that they would have on our nation’s economic security and, in particular, the southern powerhouse?

Mr Osborne: My hon. Friend is right to draw attention to the big investment that is being made in our nation’s infrastructure, especially transport infrastructure. We have the biggest rail programme since the Victorian age and the biggest road programme since the 1970s, which the hon. Lady is seeing in the improvements to the A27 and M27 in her area. Of course, an economic policy that destroys all confidence in the British economy would mean no investment.

T2. [903806] Mike Kane (Wythenshawe and Sale East) (Lab): The OECD has estimated that tax havens are costing developing countries three times the global aid budget. Does the Chancellor share my frustration over the fact that the UK overseas territories have ignored the pleas of the Prime Minister, and have not introduced beneficial ownership registers? What more can be done to end the secrecy and inaction?

The Financial Secretary to the Treasury (Mr David Gauke): The United Kingdom is leading the way in respect of a public register of beneficial ownership, but other countries, including the overseas territories, are not committed to that. We continue to engage with them, because we believe that they should follow the same direction as us—as, indeed, should other countries.

T8. [903812] Stuart Andrew (Pudsey) (Con): Tackling the deficit should rightly be a priority for the country. What steps is my right hon. Friend taking to ensure that everyone pays a fair share in meeting that objective?

Mr Osborne: My hon. Friend is absolutely right. We want to ensure that this is done fairly. Under the present Government, the richest pay a higher proportion of income tax than they did under the last Labour Government. Figures published this morning by HMRC contain, for the first time, the income tax data for 2013-14, which was when the 50p rate was reduced to 45p. The data reveal that in that year there was an £8 billion increase in revenues from additional-rate taxpayers, which completely defies the predictions made by the Labour party at the time, and shows that we have lower, competitive taxes that are paid by all.

T4. [903808] Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP): Figures from the Public and Commercial Services Union show that 2,000 HMRC staff in Scotland face redundancy, including 150 experienced and dedicated people in Inverness. At the same time, the HMRC overtime bill is about £6 million a month. Can the Chancellor explain to my constituents how that makes any sense at all?

Mr Gauke: HMRC is engaged in changes that will be focused on 13 regional centres across the United Kingdom. The same proportion of its work force will continue to be in Scotland, which is actually a larger percentage than the population of Scotland. We are seeking to improve the efficiency of HMRC, and we believe that regional centres will enable it to achieve more for less. It is already bringing in more money and a better rate of return than we have ever had before.

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Mr Alan Mak (Havant) (Con): About 40,000 people in my constituency have benefited from the rise in the personal allowance since 2010. Can the Chancellor confirm that the Government will continue to help hard-working people to keep more of the money that they earn?

Mr Osborne: That is absolutely what the Government were elected to deliver. We have manifesto commitments to deliver not just the £50,000 threshold for the higher rate, but a £12,500 personal allowance, so that more people can see the benefit of either paying no tax if they are low paid, or paying less tax if they are better paid.

T5. [903809] Neil Gray (Airdrie and Shotts) (SNP): Will the Chancellor tell us when he is due to publish the proposals for the distribution and calculation of the apprenticeship levy to the devolved nations, and whether the Governments in those nations have agreed to it?

Mr Osborne: We are working to get those arrangements right. They are clearly complex, because of cross-border companies that will pay a single levy rate, but we are having good discussions with the Scottish Government. I think that, as with the agreement on the fiscal charter, we can work together for the benefit of the United Kingdom.

Craig Tracey (North Warwickshire) (Con): I welcome the fact that my constituents have been given more control over their finances, thanks to changes implemented by the Government. Can the Minister advise me on what steps have been taken to ensure that the regulation applied to small high street financial advisers and insurance brokers is both fair and proportionate, given the important service that they provide?

The Economic Secretary to the Treasury (Harriett Baldwin): I thank my hon. Friend for raising this point. We have launched something called the financial advice market review, which will be reporting around the time of the Budget. We will be looking at how to make financial advice more affordable and more available, and also at how to get the right kind of regulatory balance for smaller firms.

T6. [903810] Matthew Pennycook (Greenwich and Woolwich) (Lab): Following reports that Hinkley Point C faces further delays, will the Chancellor revisit his decision effectively to write the French an extremely generous long-dated option and instead bring forward fall-back options?

Mr Osborne: We are working with the French Government, and all the signs are that they are committed to this project. This is a good example of how the United Kingdom, working with France and indeed attracting investment from Asia, is getting a new generation of nuclear power under way. That was promised for 20 years or more and did not happen, but it is now going to take place in Somerset.

Michael Fabricant (Lichfield) (Con): I am proud to have been part of the Government who introduced the national living wage, but I wonder whether my right hon. Friend has had a chance to look at the report from the British Retail Consortium entitled “Retail 2020”, which talks about that and about the impact of internet shopping.

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Mr Osborne: I did see that report yesterday. We all have to accept that the retail industry faces an enormous amount of change, particularly because of what is happening on the internet and the way in which people are shopping online. I personally think that one of the biggest changes we can make right now is to allow shops to open on a Sunday, which is the biggest single day for internet shopping. We cannot say that we want to protect our high street shops while in the same breath saying that they cannot open on one day every week, given that the internet is open 24 hours a day. We shall have a chance to vote on that question next week.

T7. [903811] Paula Sherriff (Dewsbury) (Lab): The Chancellor’s statement on ECOFIN referred to the UK seeking a multilateral agreement on making the details of the tax paid by companies publicly available on a country by country basis. Will he tell us what measures he will take to achieve that, and on what timetable? As a first step, will he admit that his Google tax deal was not a great success, and does he accept the Public Accounts Committee’s call for full transparency?

Mr Osborne: The Public Accounts Committee has investigated HMRC deals in the past and it is of course welcome to do so again. It gave HMRC a clean bill of health on its approach to these things. We are introducing country by country reporting, and the regulations came into force last week. That is happening only because this Prime Minister put the matter on the agenda in this country and internationally, and I have been calling, at the EU and at the G20, for an international agreement on public reporting so that we can know what companies are paying in different jurisdictions rather than just reading reports about it.

Dame Angela Watkinson (Hornchurch and Upminster) (Con): The local economy in Hornchurch and Upminster comprises thousands of small businesses. Can the Chancellor offer any encouragement to the Federation of Small Businesses, which is pressing for tax simplification in order to reduce the burden of tax administration for small businesses?

Mr Gauke: One of the areas in which we can make progress is the digitisation of the tax system, which could help a lot businesses. I would also make the point that the Office of Tax Simplification has been strengthened and we are putting it on a statutory footing. We are looking forward to seeing a couple of reports from it over the next few days on what we can do to help small businesses in particular.

T9. [903813] Dr Philippa Whitford (Central Ayrshire) (SNP): When services that have been removed from local authority control and centralised in England have been granted the right to reclaim VAT, does the Chancellor accept that the refusal to grant that right to Police Scotland—making it the only UK force to pay VAT—just looks vindictive? Will he not reconsider that decision?

Mr Gauke: To be fair, the position on reclaiming VAT was made perfectly clear when the Scottish Government made the decision to go down this course. The UK Government are simply pursuing the policy that we always said we would pursue.

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Byron Davies (Gower) (Con): The Chancellor will be aware that debates have been held and questions asked in the House regarding serious allegations of collusion between banks and valuers in order to deliberately undervalue and seize assets. Has he considered the current regulations on such banks and valuers, and whether there needs to be a broader remit for the Serious Fraud Office and other organisations to investigate these serious allegations, whose number is growing?

Harriett Baldwin: I am aware of the points my hon. Friend has raised in Westminster Hall and obviously I am keen for our system to have a tough set of rules on conduct in the banking system. I would welcome the opportunity to meet him to discuss these specific allegations in more detail.

T10. [903814] Nic Dakin (Scunthorpe) (Lab): If the Chancellor believes that a strong steel sector is fundamental to a strong northern powerhouse, what steps is he taking to level the playing field for the steel industry, the foundation of our manufacturing and defence industries, so that it can have a prosperous future to match its prosperous past?

Mr Osborne: The steel industry faces a big challenge at the moment, and that is true in many other countries in the world, as the price of steel has collapsed. We have taken a number of steps to ensure the level playing field that the hon. Gentleman speaks of. First, we have taken the industry out of the energy levies that were imposing additional costs on it. Secondly, we have made sure that local areas that have had redundancies get the support they need. Thirdly, we have changed our procurement rules so that we can make sure we are buying British steel and taking into account the social impact of those steel purchases in making our value-for-money assessments. Fourthly, as I said in reply to an earlier question from him, we are working, through our partners in the EU, to make it clear that we do not and cannot support Chinese steel dumping, and that we need to take action against it.

Caroline Nokes (Romsey and Southampton North) (Con): My right hon. Friend the Chancellor will be well aware of the widespread and cross-party support for a children’s specialist accident and trauma department at Southampton general hospital, so may I urge him to give careful consideration to the bid put together by clinicians? I know they have sent it to him and are looking for support for a match funding bid.

Mr Osborne: I am aware of the case being made—a strong case, in my view—for the children’s facilities at the Southampton hospital. It is a case advanced by my hon. Friend and other colleagues, notably my hon. Friend the Member for Winchester (Steve Brine), who has pushed it, alongside her. We are looking closely at it and I will make an announcement in due course.

Danny Kinahan (South Antrim) (UUP): Let me follow the hon. Member for Airdrie and Shotts (Neil Gray) by raising the key issue of the apprenticeship levy, because the devolved Governments are moving towards elections and we need to know about this as soon as possible. Will there be a Barnett consequential attached to it?

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Mr Osborne: Our intention is to use the principles of the Barnett formula to make sure that the devolved Administrations, not only in Scotland, but in Northern Ireland, do get the resources they need. Of course we would urge them then to spend those resources on training, but that is ultimately a matter for them and the people to whom they are accountable.

Kit Malthouse (North West Hampshire) (Con): Given the importance of family investment in start-up businesses, particularly science and technology businesses, where a leap of faith is often required, will the Chancellor, in the Budget, consider lifting the restrictions on family investment under the enterprise investment scheme and the seed enterprise investment scheme, so that mum and dad can invest alongside everybody else on the same terms?

Mr Osborne: I am happy to take that as a Budget representation. I am sure my hon. Friend will understand that if he turns up on Budget day, he will see my response to it. The SEIS and EIS have been enormously successful. We have to make sure that the rules are tight enough so that they are supporting the kind of entrepreneurial activity we want, rather than being used as a vehicle for tax avoidance. I think we have got the balance right so far, but I am aware of good, positive proposals that people have put forward to improve it.

Helen Goodman (Bishop Auckland) (Lab): The Chancellor chose to give a puff to his desire for Sunday trading liberalisation, but is he aware of the study produced yesterday which showed that all there will be is a switch of activity from small shops to big shops, and that that will mean a loss of thousands of jobs? [Interruption.]

Mr Speaker: The hon. Member for Lichfield (Michael Fabricant) says that the Chancellor has already dealt with that question. As I have often had cause to observe, repetition is not a novel phenomenon in the House of Commons.

Mr Osborne: To repeat myself, Mr Speaker, I do not agree with the hon. Lady, because it has been the case that when we have extended opening hours we have not seen not a displacement of jobs, but an increase in jobs. That is the assessment from the retail industry. Of course, these arrangements exist in Scotland, in many European countries and in the United States. Many of those are countries with strong Christian faiths, so I do not think there is a contradiction there. We cannot in this House constantly say that we worry about our high street and then not allow high street stores to open on the day when the biggest level of internet shopping takes place. This is one of the answers to helping our high street. It is not the only one, but it is an important one.

Martin Vickers (Cleethorpes) (Con): North Lincolnshire and North East Lincolnshire councils are currently preparing detailed regeneration plans. Can the Chancellor

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assure me that he will give them serious consideration, so that my constituents can gain maximum benefit from the northern powerhouse initiative?

Mr Osborne: Absolutely. We will give careful consideration—as I always do—to the proposals that my hon. Friend comes forward with to support North Lincolnshire and his own constituency. We have been able to make investments in new roads, reduce the tolls on the Humber bridge, and introduce enterprise zones. I would love to hear of any new ideas that he has.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Happy St David’s day to you, Mr Speaker.

The Chancellor often talks about repairing the roof when the sun is shining. Norway, a country the size of Scotland, managed to amass £810 billion in an oil fund when the sun shone. Just how much have the broad shoulders of the UK saved for a moment such as this to help north-east Scotland? Is the figure indeed zero?

Mr Osborne: We are providing support to Scotland, and that support is entrenched in the fiscal framework that we have agreed with the Scottish Government. The hon. Gentleman cannot duck his responsibilities. He wanted Scotland to be independent on 24 March—this month. If we had gone ahead with that—if the Scottish people had voted for it—there would have been a fiscal catastrophe in Scotland, because oil revenues have fallen by more than 90%. We had a question earlier from a Scottish National party Member—[Interruption.]

Mr Speaker: Order. I apologise for interrupting, but that was a very unseemly gesticulation by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). I remind him of his status in this House as the Chair of a Select Committee. He is an aspiring statesman and must conduct himself accordingly.

Lucy Frazer (South East Cambridgeshire) (Con): In response to an earlier question on productivity, my right hon. Friend mentioned the drivers of growth being investment in schools and investment in science and technology. Does he, like me, welcome the Government’s commitment to train 17,500 more teachers in science, technology, engineering and maths, and does he think that there is absolutely no time to waste in recruiting those teachers?

Mr Osborne: My hon. and learned Friend is absolutely right. It is one of the big national challenges to get more children, particularly more girls, studying STEM subjects at school. The key to that is to get more STEM teachers. We have a series of incentives to drive that forward. Of course through our school freedoms, schools also have the tools to recruit teachers themselves.

Several hon. Members rose

Mr Speaker: Order. We must now move on. Demand invariably exceeds supply. No one is keener to facilitate questions than I, but we do need pithy questions and pithy answers.

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12.37 pm

Jo Cox (Batley and Spen) (Lab) (Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the cessation of hostilities in Syria.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood): The Syrian conflict is now almost in its sixth year. As a result of Assad’s brutality and the terror of Daesh, more than 250,000 people have lost their lives, half the population have been displaced, and more than 13.5 million people are in need of humanitarian aid.

Russia’s military intervention last autumn compounded the violence. Russia claims to be targeting terrorists, yet it has carried out strikes on moderate opposition groups and civilians. More than 1,300 civilians have been killed and 5,800 injured by Russian or regime airstrikes since the start of Russia’s campaign.

Our goal is for Syria to become a stable, peaceful state with an inclusive Government capable of protecting their people from Daesh and other extremists. Only when that happens can stability be returned to the region, which is necessary to stem the flow of people fleeing Syria and seeking refuge in Europe. The last few months have seen some progress towards that. The International Syria Support Group came together at the end of 2015 in Vienna to help to facilitate a return to a process leading to a political transition in Syria.

In December, opposition groups came together to form the higher negotiations commission, representing the widest possible range of opposition views, and nominated a team to negotiate with the regime. Proximity talks between the regime and opposition began under UN auspices in January, but were paused as a result of a deteriorating situation on the ground. The ISSG met again in Munich at the Munich security conference on 11 February, agreeing that there should be a cessation of hostilities and humanitarian access to named locations in Syria. Since then, the US and Russia have agreed at the highest levels on the terms of a cessation of hostilities. The agreement was codified in UN Security Council resolution 2268 on 26 February.

The cessation of hostilities is an important step towards ending the terrible violence in Syria and bringing a lasting political settlement. It came into force on 27 February. Since then, we have seen a reduction in violence, which is of course a huge step forwards, but we need to see that sustained and to see a reduction in the number of reported violations.

We have received reports of a number of violations, which we have passed to the UN and the ISSG co-chairs in Geneva. We need swift action to reduce those violations. We look to Russia in particular to use its influence with the regime to ensure that the cessation endures and that there are no further violations. It is crucial that the opposition see action being taken in response to allegations of violations to ensure their commitment and that of their Syrian constituents to the process.

It is essential that the cessation of hostilities supports the wider political process. We support UN Special Envoy Staffan de Mistura’s plans to resume peace negotiations on 7 March. Those negotiations must deliver

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a political transition away from Assad to a legitimate Government that can support the needs and aspirations of all Syrians and put an end to the suffering of the Syrian people.

At the same time, we call for complete and unfettered humanitarian access across Syria and an end to all violations of international humanitarian law, as set out in UN Security Council resolution 2254. We are relieved that desperately needed aid convoys are now arriving in some besieged areas of Syria, including those named in the Munich ISSG agreement of 11 February. It is imperative that that continues.

The international community and particularly Russia, which has unique influence, must put pressure on the Assad regime to lift sieges and grant full and sustained humanitarian access. As I have said, there must be a political solution to the crisis in Syria. It is imperative that the steps I have described are implemented by all parties and that the cessation of hostilities endures. The UK is working strenuously to make that happen and will continue to do so.

Jo Cox: I thank the Minister for updating the House on such a vital issue. The cessation of hostilities in Syria that began on Friday is a much needed ray of hope in this tragic civil war, yet, as he has set out, it faces serious challenges after growing reports from international non-governmental organisations and the media of numerous violations of the truce. Syrian opposition leaders have claimed that it was close to collapse over the weekend and the French Government have urgently called for a meeting of the monitoring group amid allegations that Syrian and Russian forces have seriously breached its terms. In this context, will the Minister set out specifically what action the UK is taking within the ISSG to ensure robust and transparent monitoring of the cessation agreement?

Secondly, is the UK joining efforts led by France for urgent action in the ISSG on the growing reports of violations of the cessation agreement by Assad and by Russia? Indeed, will the Minister address how it is even conceivable that the monitoring of the agreement is being jointly conducted by Russia, the same party that is responsible for the vast majority of recent civilian deaths? If the reports of Russian and regime violations are verified, what measures will the UK pursue to force a change in the calculations of both Putin and Assad? The UK has a critical role to play in giving everybody confidence in this system, in particular that the violations will be called out and the agreement protected. Are the Government considering, for example, further targeted sanctions against Russian entities in the event of further violations?

Further, what is the UK’s assessment of the mobilisation of Assad’s forces and militias to encircle Aleppo? Is this not a direct violation of the cessation agreement? Can the Minister confirm that the cessation agreement covers those areas where al-Nusra or any other Security Council-designated terrorist group is mixed with the moderate opposition? If the cessation holds this week, can the Minister confirm that negotiations on political transition will be at the very top of the agenda at the meeting in Geneva next week?

Finally, in the light of the reduction in violence, many Members of this House are deeply concerned about the lack of access to besieged areas inside Syria, particularly

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Daraya just outside Damascus, where people are starving to death. There is no ISIL or al-Nusra in Daraya, and it is unacceptable that the Assad regime, with the backing of Russia, is preventing this lifesaving aid, paid for by the British taxpayer, from getting to the most vulnerable. Do the Government and their partners have a deadline by which aid will reach Daraya and other besieged areas?

Mr Ellwood: I begin by paying tribute to the hon. Member for Batley and Spen (Jo Cox) and her commitment to this area. She is co-chair of the all-party parliamentary group on Syria, and I acknowledge the work that she does in raising these matters in the Chamber and elsewhere. The House is all the wiser for it. She raises a series of issues and I will do my best to answer them, but, as I have done in the past, I will write to her with more detail.

On the hon. Lady’s last question, about making sure that aid gets through, I am pleased to see that I am joined here and supported by my colleagues from the Department for International Development and the Ministry of Defence. As the hon. Lady knows, we hosted the Syria conference a couple of weeks ago in order to make sure, first, that the funds were available for the United Nations organisations to get to the necessary areas to provide the aid and assistance once the cessation of hostilities had taken effect. There have been varying degrees of success in trucks getting through. She will be aware that we have to get confirmation from the regime that the trucks can have safe passage. Airdrops have been used for the first time but have been less successful, for obvious reasons—factors such as who receives the kit on the ground, the weather conditions, where the supplies land, and ownership of the supplies once the drops take place all present difficulties, but further drops will take place in the future.

The hon. Lady asks what more can be done. It is imperative that those who are putting together the ceasefire, which is happening at the highest level from the telephone calls between President Putin and President Obama, create and co-ordinate the verification model. That is not fully in place. This is a highly complex task because of the number of players involved across Syria and the challenges in making sure that verification can take place. The UK is pushing the ISSG co-chairs to investigate all allegations. We are using our own capabilities to feed into the system any violations that we become aware of so that they can be investigated. We have sent additional staff to the UN in Geneva to assist in this effort, and we are negotiating and discussing these matters with our UN Security Council colleagues.

The hon. Lady talked about the difficulties in Aleppo. The situation is concerning. In the lead-up to the cessation of hostilities, people took advantage before the cessation came into effect on 27 February. As I said in my opening remarks, it is imperative that Russia shows leadership and shows that it recognises that it has a unique place and unique influence with the Assad regime, to make sure that the purpose of the cessation of hostilities, which is to allow that political transition, is achieved.

The hon. Lady asked about the talks taking place with Staffan de Mistura on 7 March. It is critical to get the parties together. They broke apart last time because of the continued bombing that took place. It was the

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UN envoy who closed the meeting down before somebody walked out again. We do not want to see that repeated, which is why we are encouraging parties to resume those discussions, taking advantage of the cessation of hostilities that is in place, and we hope they are successful.

Crispin Blunt (Reigate) (Con): Notwithstanding the wholly understandable scepticism of the hon. Member for Batley and Spen (Jo Cox) about Russian intentions, the fact is that this ceasefire would not have happened had it not been pushed for quite hard by the Russians, alongside the United States. The Minister referred to verification mechanisms, but what practical military-to-military co-ordination is going on between the Russians and the coalition to ensure that any breaches of the ceasefire are immediately understood and brought to an end and that, as far as possible, the ceasefire is properly observed, without accidents happening and with both sides knowing what the other is doing?

Mr Ellwood: My hon. Friend, the Chairman of the Foreign Affairs Committee, raises an important point, which I will divide in two, if I may. There is a deconfliction system that makes sure that the coalition’s aircraft and involvement are separated from Russia’s, and that has now been in place for some time. However, what we are talking about here is a verification mechanism for the cessation of hostilities. The verification process has yet to be put in place; it is still being agreed by the co-chairs—Russia and the United States—and details will emerge soon.

Diana Johnson (Kingston upon Hull North) (Lab): I very much welcome the urgent question from my hon. Friend the Member for Batley and Spen (Jo Cox), and I pay tribute to her excellent work on this issue.

The world community is watching the ceasefire very closely, and we all want it to be successful, not least to allow humanitarian aid into areas blighted by the conflict, but also to give a boost to the tentative peace talks. As the ceasefire has now been in operation for a few days, I would like to ask a number of questions.

First, the letter from the Syrian National Council to Ban Ki-moon alleged there were 15 breaches of the ceasefire by Russia and the Assad regime. Following that, France called for an urgent meeting of the International Syria Support Group. Will the Minister confirm when the group will meet? What powers does it have to make a ruling on breaches of the ceasefire? Does it need unanimity to do so?

Among reported breaches of the ceasefire, the most worrying was a reported gas attack in the Irbin area, with indications of a link to the Assad regime. Will the Minister confirm whether the Government are aware of that attack? What special provisions are in place to investigate chemical weapons attacks?

One key problem is a lack of agreement on which groups are terror organisations and what action is allowed. Will the Minister explain whether that will be discussed at the International Syria Support Group?

To address the humanitarian situation, we need access to areas where there are no hostilities. Will the Minister explain what steps have been taken to establish the geographical demarcation of the ceasefire?

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Over the past six months, Russia has repeatedly acted to prolong the conflict. What discussions have there been with our allies in the EU to put pressure on Russia to abide by the ceasefire?

Saudi Arabia also has a key position of influence. It is especially concerning, therefore, to hear of a possible Saudi response to Russian action. Has the Minister made any representations to the Saudi Government about that?

Finally, may I ask about the status of the group Ahrar al-Sham? I understand that it was not a signatory to the ceasefire but had indicated that it would abide by it. However, it now claims that its headquarters in Idlib were attacked in a Russian airstrike—a claim backed by several sources. Will the Minister confirm whether the group is considered to be outside the terms of the ceasefire by the UK and the US?

Mr Ellwood: The hon. Lady asked a series of questions. First, the latest UN Security Council resolution—resolution 2268—which confirmed the cessation of hostilities, underlines the importance of a previous one, resolution 2254, which is all about the ability to gain access to various areas where ownership is sometimes confusing. That is done on a very local basis to make sure that agreements take place and that UN and other convoys have the series of permissions they need, so that they are not halted at checkpoints, with the food being taken from them and used as a weapon of war. It is difficult for me to give a comprehensive reply for the whole of Syria, but these things are done on an area-by-area basis. The method for taking deliveries also reflects the threat level. Clearly, there are areas surrounded by Daesh, where it is impossible to have such agreements.

The hon. Lady spoke about the chemical weapons attack. A number of UN organisations are looking into a wider piece to do with the use of chemical weapons across Syria. They are in the process of completing a report to the UN, which is due shortly. If I may, I will write to her with more details on that.

On the work being done to provide international humanitarian aid, I go back to the conference we had, where we were able to garner an awful lot of support, including from Saudi Arabia, for making sure that money is filtered through the various UN organisations so that they can get through to the various locations.

The hon. Lady mentions a number of other extremist groups, including Ahrar al-Sham, and there is Jaysh al-Islam as well. They have not been considered as moderate; they have not been included in the discussions, and they were not represented in the talks where the Saudis brought the moderate groups together.[Official Report, 9 March 2016, Vol. 607, c. 1MC.]

Sir Edward Leigh (Gainsborough) (Con): May I just ask where the Foreign Secretary is? I know he is very busy, but the House of Commons must always come first. We are at least owed an explanation.

May I suggest that the Labour and Conservative establishments, in being such an outrider for the overthrow of unpleasant authoritarian regimes—whether Gaddafi’s, Assad’s or Saddam’s—have merely provided an opening for far worse, totalitarian movements? It is also arguable that we have had very little influence in the latest round

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of peace negotiations, as the Americans cosy up to the Russians. Will the Foreign Office now at least accept that there may be some merit in Assad being allowed to go gracefully in elections, however imperfect?

Mr Ellwood: First, may I say that I will not take it personally that my hon. Friend feels I am not adequate to answer today’s question? This is an urgent question, and the Foreign Secretary was not able to get here. I will certainly do my best to convey to him the fact that my hon. Friend would have loved to see him instead of me.

On the transition process, we ended 2015, after five years of hostilities, with opposition groups coming together for the first time. For the first time, we had international stakeholders, including Saudi Arabia and Iran, around the table at the Vienna talks discussing these matters. That was the first time a transition process was discussed, the first time an 18-month process was to be put in place and the first time life after Assad was actually considered.

It is important to recognise that it must be for all the people of Syria to decide their fate, whether they are Kurds, Druze, Alawites or Sunnis. We must remember that 80% of the deaths in Syria have been caused by Assad and his regime. That is why we say that it would be inappropriate for him to participate in the long-term future of the country. The whole purpose of bringing these organisations together to discuss the democratic process is that they will decide the transition away from Assad.

Alex Salmond (Gordon) (SNP): May I join the Chairman of the Foreign Affairs Committee, the hon. Member for Reigate (Crispin Blunt), in urging that the correct policy for Her Majesty’s Government is to give every facility to the rapid establishment of a verification regime? We can engage in tit-for-tat allegations about who is breaching what, but this is the only ceasefire we have. The Minister will know that there were reports this morning from Kurdish forces about our NATO ally using the ceasefire as an opportunity to build up forces against them, so the establishment of the verification regime is key.

Will the Minister tell us in more detail about the urgency of attempts to bring in humanitarian relief? Which convoys have been allowed through and which have been stopped? Which airstrikes have been successful and which have not? Given the overwhelming urgency of the humanitarian crisis, the House would appreciate it if the Minister could find a way to provide Members with exact detail on that.

Mr Ellwood: I have gone into some detail about the urgency of the humanitarian relief work. This is partly why a cessation of hostilities was needed. In places such as Madaya, people have resorted to eating pets, such is their plight. Thanks to the agreement between Lavrov and John Kerry at the Munich security conference, which led to discussions between Putin and President Obama, we have seen this build-up of a cessation of hostilities. I was cautiously optimistic when I saw President Putin make a rare live appearance on Russian television stating his commitment to ensuring that a cessation of hostilities came about.

However, as I am sure the right hon. Gentleman will be aware, experience shows that whenever a deadline is put into a ceasefire or cessation of hostilities, there is

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then an effort by hardliners—by opportunists—to take advantage of the period before the deadline comes into force to gain territory, to further their lines and to make a greater impact, so that when the hostilities cease they are in a stronger position. That is exactly what we have seen in this case. We require every country, whether it be Turkey, Russia or Assad’s regime, to hold fast—to recognise that the world is watching and that although the humanitarian situation is absolutely dire, there is an international community that wants to help and can do so only if it has access to the various areas that I have articulated.

Mr David Winnick (Walsall North) (Lab): Is there any evidence whatsoever that Assad would be willing to go graciously? Does not all the evidence show that he is determined to stay in power? As for Russia, would it not be right to conclude that it has never really been interested in using its military might against Daesh, because first and foremost it wants to consolidate in every possible way the Assad regime, which, as the Minister said, has been responsible for some of the worst crimes committed in the past 25 or 30 years? Russia has a large moral responsibility for what is occurring on the ground.

Mr Ellwood: I partly agree with the hon. Gentleman. He makes very clear, as I have, the atrocities that Assad has inflicted. That is why we believe there is no long-term place for his involvement. What has happened is the recognition that there needs to be a very clear transition process. We should not just be talking about Assad. Assad and his cohorts—his family and so forth—have a firm grip on the top of the regime. It is simply not possible to remove the individual man and then assume that life can move on; it is far more complex than that, as I am sure the hon. Gentleman is aware.

We should also recognise—though this is no excuse for Russia’s behaviour—that Russia has had a long-term interest in the country since 1946, when it started to train the new Syrian army after Syria gained its independence. Syria backed the Soviets during the cold war. Assad’s father trained as a MiG pilot in Russia. There is a bond between the country that we cannot ignore, and that is why Russia is there, but we need it to use its influence in a positive way. We need Russia to recognise the damage Assad has done and the fact that the people of Syria deserve better than this. When I say “the people of Syria”, I mean all of Syria, not just one particular grouping or sectarian area.

Mr John Baron (Basildon and Billericay) (Con): The Government have placed great importance on the need for the 70,000 moderates they estimate are taking on Assad to swing round and take the ground battle to Daesh, given that we all accept that airstrikes alone will not succeed against Daesh and it is becoming increasingly evident that there are already too many aircraft chasing too few targets. What progress is being made with those plans, and are the Government still convinced that there are 70,000 moderates left?

Mr Ellwood: The point about the 70,000 moderates has been raised before. The figure is an estimate. We should understand that this is a very divided group of people who have been standing up to Assad since the Arab spring. They are the pockets of resistance that had a choice, when Assad started to bomb and kill his own

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people, either to go extremist—to go fundamentalist—or to say, “No, I want something different. I do not want to be part of the Ba’ath party in the future; I want the freedoms that I am seeing develop in other parts of the Arab world.” They are disparate. They are in Aleppo in the north, through to Idlib, through to parts of Damascus, and down to Daraa in the south. Those pockets of people have stood up, and they have now come together by participating in the Geneva talks that are taking place thanks to the leadership of Saudi Arabia. So yes, they are not united in the sense that we would like them to be, but we are moving forward, and they now need to be part of the process that works out what the country looks like post-Assad.

Mr Ben Bradshaw (Exeter) (Lab): In my view, the people of Syria have paid a really dreadful price for our failure to act three years ago after Assad used chemical weapons against his own people, and even earlier than that.

I want to ask the Minister about a glimmer of hope: the elections in Iran and the impact they might have on the situation in the middle east and in Syria in particular. Does he think that what has happened in Iran vindicates the policy that his Government, the previous Labour Government, Europe and President Obama have pursued with the Iranian regime?

Mr Ellwood: On the first point, there is no point in saying so now, but many of us will look back at how different life would have been, and how things would have changed, had we taken different action on a punitive strike. The reason why Assad is back in play now is that Russia has backed him. He was falling—we were seeing his slow demise—and Russia came back in to support its person. That is why we are in the position that we are in today.

The right hon. Gentleman asks a very relevant question that is slightly outside the scope of this subject, but with your permission, Mr Speaker, I will say that we are cautiously optimistic and welcome what has happened in Tehran. There are only early results yet, but with the moderates in the Assembly of Experts and in the Majlis itself, this is the first opportunity for the people of Iran to have a say in the future of their country.

However, Iran will be judged by its actions because of its proxy involvement with Hezbollah in Lebanon, in Damascus in Syria, in Baghdad in Iraq, in Sana’a in Yemen, and in Bahrain. If we see changes there, we will know that we are working with a different Iran, but until then we should expect the same.

Seema Kennedy (South Ribble) (Con): I pay tribute to the hon. Member for Batley and Spen (Jo Cox) for raising this issue. Following John Kerry’s statement that it may be too late to keep Syria whole, will the Minister update the House on any conversations he has had with his American counterpart on the possible partition of Syria?

Mr Ellwood: It is for the people of Syria to determine their future as to how the country needs to be managed and should be governed. We are at the very, very early stages. It would be wrong to go further than that. History shows that Britain has not always been in the best place to make its assessments, not least in this particular patch of the world.

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Mrs Madeleine Moon (Bridgend) (Lab): Russia has absolutely no desire, I am sure, to bring hope or humanitarian relief to many areas of Syria; rather, it wants to increase fear and despair, and cause the collapse of the Opposition. I am also sure that it hopes that the peace period will bring a greater influx of refugees fleeing from Syria towards the west. Are we monitoring whether that is happening? Are we using our intelligence and surveillance capability as part of that monitoring given the apparent need for observation of what the Russians and the Assad regime are doing, in violation of the peace process?

Mr Ellwood: The hon. Lady, who follows these matters very seriously in the Committees that she is involved with, puts her finger on a very important point. This is not just about Syria; it is also about the wider strategic implications of what is happening elsewhere, including the role that Russia is playing on the international stage, not least in Ukraine and Crimea, and the consequences of the influx of refugees and its political impact across Europe. We are not in any way blind to that. That is all the more reason why we need to continue our pressure at the United Nations Security Council in making sure that a verification mechanism comes into play as soon as possible.

Mr Steve Baker (Wycombe) (Con): It is a moral outrage to take the life of any non-combatant. What estimate have the Government made of the number of non-combatants killed by Russia, and can the Minister reassure my constituents that the Royal Air Force is not responsible for any deaths of non-combatants?

Mr Ellwood: I can confirm the latter part of my hon. Friend’s question. The rules of engagement that we follow are very robust indeed. As I said in my opening remarks, we estimate that more than 1,300 civilians have been killed either by Russia or by Russian-supported airstrikes, and another 5,800 have been injured.

Tom Brake (Carshalton and Wallington) (LD): On the subject of airdrops, could the Minister confirm whether the RAF have been involved in them; whether they are taking place with the formal agreement or just the acquiescence of the Russians and Assad; and whether they could be scaled up if Assad and Putin continue to starve Syrian civilians?

Mr Ellwood: The coalition does a lot of planning in order to establish the best mechanism to provide aid relief in any particular area. The RAF itself has not been involved in airdrops per se; the United States has been leading on that. As I have said, they have had a marginal effect. They are subject to weather conditions and to who is on the ground to receive the actual aid. It is then a matter of luck as to how that aid is distributed. Often it is unfairly distributed, because the strongest end up grabbing the kit and taking it away with them. That is why the preferred mechanism is to get permission to go through the various checkpoints and deliver the aid by truck.[Official Report, 9 March 2016, Vol. 607, c. 2MC.]

Tom Tugendhat (Tonbridge and Malling) (Con): May I also pay tribute to the hon. Member for Batley and Spen (Jo Cox), who has done a lot of work on this issue over the past few months—and, indeed, over many

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years in her previous incarnation—and to the Minister, who has done an awful lot of work in the region? We have spoken a lot about the pressures that the Russians have brought to bear on the legitimate opposition to the Assad regime. Could he also tell us about the pressures they have brought to bear on our allies in the region, and what he is doing, working with the Lebanese, the Iraqis, the Jordanians and, indeed, the Turks, to ensure that we deliver a peaceful solution for Syria, not a wasteland made by Russian bombs?

Mr Ellwood: I am grateful to my hon. Friend for his comments. He is right to mention the impact that the situation in Syria is having on its neighbours. We should all pay tribute to the generosity of countries such as Jordan and Lebanon, which have taken in so many refugees. The whole House will appreciate and support the fact that much of the funds we provide are going to those other countries as well.

One of the major changes that took place at the Syrian conference was that to employment opportunities for Syrian refugees so that they are not a burden on domestic employment situations. That happened partly because of the funding that is coming through and the opportunities being created by other countries. We are doing our best to make sure that Turkey plays its role—which is complicated, given its relationship with the Kurds—in moderating its actions and making sure that the cessation of hostilities lasts.

John Woodcock (Barrow and Furness) (Lab/Co-op): Russia’s aggression and flagrant violations of international law in a number of areas have strained and limited bilateral relations over recent years, and yet the Government say that they are urging Russia to play a more constructive role in the Syria conflict. Will the Minister outline the ways in which the Government have contact with the Russian Federation at present?

Mr Ellwood: I travelled with the hon. Gentleman on a visit to Kiev a couple of years ago, so I am familiar with his knowledge and understanding of and interest in these matters. It is important to recognise that. There are a series of opportunities when the international community comes together, and Foreign Minister Lavrov, John Kerry and our Foreign Secretary are now able to meet on a regular drumbeat. The International Syria Support Group is one such opportunity and it will meet later in March. There are also counter-ISIL coalition conferences, the most recent of which took place in Rome, and the Munich security conference includes not only public statements, but private bilateral opportunities. The most recent conference was different, however, because it was important to recognise the involvement of President Putin and President Obama. That is why I think the world was hoping that the outcome would be more optimistic.

Jason McCartney (Colne Valley) (Con): I, too, want to pay tribute to my near neighbour, the hon. Member for Batley and Spen (Jo Cox), for continuing to bring to this Chamber the plight of the Syrian people. All sides must respect the ceasefire. What discussions has the Minister had with the Turkish Government about reports that Turkish forces have been shelling Syrian Kurds?

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Mr Ellwood: I am aware of those reports and we have encouraged Turkey to recognise the importance of the cessation of hostilities and the opportunity it gives for further political engagement, which will itself be an opportunity to solve some of the problems that Turkey is enduring. We do not want people compounding the problem by taking advantage of the cessation of hostilities in order to gain ground, so we have been working with Turkey to encourage it to recognise the cessation of hostilities.

Alison McGovern (Wirral South) (Lab): Both the Minister and my hon. Friend the Member for Batley and Spen (Jo Cox) have brought to the attention of this House serious offences to human dignity. The people of Syria must know that we see what is happening to them. The Minister has previously indicated that the international community is working to a timetable. Could he update us on that?

Mr Ellwood: It is for Staffan de Mistura to bring the parties together and they will recommence their discussions on 7 March. It is not my timetable. It was first agreed at the Vienna talks as a tentative idea for an 18-month transition programme. We need to recognise, however, that that was prior to the Russian bombings, which unfortunately led to the January talks falling apart. I hope there will still be a programme of transition in 18 months, but it is for the UN-led talks to confirm whether it is still on track.

Mr Philip Hollobone (Kettering) (Con): The most credible and consistently effective ground forces against Daesh in both Syria and Iraq are our friends the Kurds, and yet time and again our NATO ally Turkey uses any excuse, including the present ceasefire, to attack and degrade them. When will Her Majesty’s Government take this issue seriously, call in the Turkish ambassador and say that that behaviour is simply not acceptable on any level, that we will not be able to defeat Daesh in Syria and Iraq without the Kurds, and that Turkey needs seriously to think again?

Mr Ellwood: My hon. Friend articulates the complexity of the challenge we face in Syria, with so many moving parts, organisations and entities pursuing separate agendas, which makes it very difficult indeed. The situation between Turkey and the PKK—which is a listed terrorist group, including from a British perspective—is recognised by this House, and we encourage Turkey to recognise and honour the cessation of hostilities. I join my hon. Friend in recognising the incredible work that the Kurds in Iraq have done in order to hold back Daesh and liberate territory. They will play a pivotal role in the eventual liberation of Mosul, which will be significant for Iraq to move on to a new chapter.

Jim Shannon (Strangford) (DUP): I commend the hon. Member for Batley and Spen (Jo Cox) as well. Last week the Defence Committee visited the middle east, where all our discussions focused on Syria and how to bring about a peace process and agreement. We welcome the current peace agreement, but the issue of Turkey came up in each of the countries we visited. Its position is to destabilise the situation in the middle east. It has a truly hedonistic attitude and some very strange bedfellows, both politically and militarily. What discussions have

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taken place with Turkey to ensure that it stops buying oil from Daesh-controlled territories and selling it for them, and that it stops attacking coalition forces? If it wants to be part of the coalition, we need its help.

Mr Ellwood: I can confirm that Turkey does not purchase oil from Daesh. Black market oil is moved along the porous border—there is no doubt about that—and every effort is made, including by Turkey, to make sure that that is cut down. We should not forget that only a few weeks ago Daesh committed a terrible attack in Istanbul, so Turkey is as committed as everybody else to participating in the coalition’s efforts to defeat Daesh.

Kevin Foster (Torbay) (Con): After five years of death and destruction, I welcome the fact that there is finally a ceasefire and some hope for the future. Given the extent of the war crimes and the brutality that have marked out the war, can the Minister reassure me that an individual’s involvement in the transitional process will not give them immunity from later facing justice?

Mr Ellwood: My hon. Friend makes an important point, and efforts are being made to ensure that all war crimes are collated. That will not be forgotten, and we will be returning to the subject in a serious way once the cessation of hostilities has moved forward.

Toby Perkins (Chesterfield) (Lab): The Minister is right to say that the statement by the International Syria Support Group is welcome. However, the actions of the Russians rather fly in the face of that, because they are signing up to a transition plan at the same time as bolstering the Assad regime. Can the Minister tell us the extent to which he believes that the Russians understand the level of transition that is required, and whether they recognise that the Assad regime needs to come to an end if Syria is to have a peaceful future?

Mr Ellwood: The hon. Gentleman makes an important point about making sure that there is a verification process in place. We are doing our part in making sure that we pass information on to the United Nations. A report will go to the Secretary-General of the UN in 15 days, and at 30-day intervals after that, confirming the situation of the cessation of hostilities and any breaches that occur. It is important for the United Kingdom, America and other countries to keep the pressure on Russia to make sure that it recognises its unique position in ensuring that the cessation is honoured, so that we can expedite the political process and alleviate the humanitarian situation.

Craig Whittaker (Calder Valley) (Con): If the cessation of hostilities holds, and continues to hold, will my hon. Friend explain what impact he thinks it will have on the flow of displaced people within Syria, and on Syrian refugees? Can he elaborate—this may be a little premature—on the role that Britain could play in making sure that Syrian refugees can return home?

Mr Ellwood: I am grateful for the question, because it allows me to speak about the success of the Syrian conference that took place a couple of weeks ago in London. In a single day, we gained a record amount of pledges—$11 billion—from across the world. That is

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important in ensuring that the Syrian people recognise that the international community is ready to support them. Once they see that the cessation of hostilities is likely to last and that a political transition is likely to take place, they will make the decision not to turn their back on their own country—not to flee their country to try to find a better life in Europe.

Nick Thomas-Symonds (Torfaen) (Lab): The right to unimpeded humanitarian aid is set out in international law, but, as the Minister has pointed out, whether convoys even leave depends on the assessment of the situation of the ground and, in some cases, on the assessment of the Assad regime. Can the Minister assure me that he will express to both the Assad regime and the Russians the high importance that the international community places on dealing with this urgent humanitarian crisis in the next few weeks?

Mr Ellwood: I am happy to do so, and that can be articulated through the UN special envoy Staffan de Mistura at the talks that will recommence on 7 March.

Robert Jenrick (Newark) (Con): May I draw the Minister’s attention to the reports from the very few international journalists on the ground in Aleppo and elsewhere in Syria that many people, particularly the rebels who are fighting against the regime, are not in favour of the ceasefire precisely because they believe that the regime and Russia will use it to take ground by stealth? That only emphasises the importance of getting aid into those communities and holding the regime to account.

May I take this opportunity to make a request of the Minister and the Government? As we have moved into territory previously held by Daesh, we have discovered at least 35 mass graves in those communities. The UK is a world leader in forensic technology and specialists, and many groups such as the Aegis Trust would like the Foreign Office and the Department for International Development to fund and encourage those forensic experts to get on the ground, where it is safe to do so, and uncover and record the terrible crimes of Daesh and the Syrian regime.

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Mr Ellwood: I will answer just the latter point, for brevity. My hon. Friend is absolutely right, and we pay tribute to the British capability, which I have seen with my own eyes in places such as Srebrenica. It is important that we gain the intelligence that is needed to hold these people to account, so that the verification processes actually take place. That can only be done, as we saw in Ramadi, once the area has been made safe from all the booby traps. That work is commencing as we speak.

Mike Kane (Wythenshawe and Sale East) (Lab): May I say that the Minister has comported himself well at the Dispatch Box today? If there is no cessation of violence in this instance, is there a plan B?

Mr Ellwood: I think it is best to avoid discussion of a plan B. We need to make this work, because the situation has gone on for too long. I began by saying that we are now in our sixth year. There is a recognition that the international community is coming together around the table for the first time. We have not previously had a situation in which Iran and Saudi Arabia—and, indeed, Russia and the United States—have been at the table. We are facing a number of difficulties and complexities, but that should not mean that we do not try to find solutions for the stability of Syria in the longer term.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Diolch yn fawr iawn, Mr Speaker, a dydd gwyl Dewi hapus iawn i chi. Happy St David’s day. Yesterday, Reuters reported that two weeks ago in Brussels, Defence Ministers in the US-led coalition met to discuss ground operations against Daesh. Will the Minister update the House on those negotiations?

Mr Ellwood: Huge success has been achieved and huge progress made in Iraq. We were able to create an indigenous capability. We were able to support and build an Iraqi force, which was able to liberate Ramadi. The next step will be the liberation of Mosul. The work that the Peshmerga is now doing—again, with British assistance—is working well. We are stopping the movement of funding to Daesh as well. Daesh is being squeezed. The consequence of that, which we should be concerned about, is that as we squeeze Daesh in Iraq and Syria, it is starting to pop up in other parts of the world, not least in Libya. We need to be aware of that.

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Points of Order

1.26 pm

Sir Edward Leigh (Gainsborough) (Con): On a point of order, Mr Speaker. You are the foremost guardian of the convention that the House of Commons must come first. My hon. Friend the Minister is a most charming and able Minister, but I have asked him why the Foreign Secretary is not here. I quite understand—he is a very busy man—if he is abroad or ill, but surely we must establish the convention that when there is an urgent question or a statement, unless it deals with a particular, small part of a Department, the Secretary of State should be here. I would hope that you make that clear to Departments.

Mr Speaker: I must say to the hon. Gentleman that the position is that it is for the Government to decide whom to field. My responsibility is to adjudicate upon applications for permission to put urgent questions. I do that every week, and sometimes several times a week. I cannot require any particular Minister to attend, and it must remain for the Government to make the judgment.

That said, the hon. Gentleman is a very senior and respected figure in this House, and he has just made a point that increasingly I have heard made recently by others. I have not made a statistical study, but there are suggestions that the frequency with which senior Ministers appear to answer urgent questions is declining. It is in no sense to cast an aspersion on the Minister, who knows his brief and has assiduously attended to the matters raised today, simply to note that point in passing. I would hope that senior Ministers wanted, and felt a duty, to answer questions from Members of Parliament. We do not have a separation of powers, as in the United States; Ministers sit in, and are answerable to, this House. None, frankly, should ever forget it.

Mr Tom Watson (West Bromwich East) (Lab): On a point of order, Mr Speaker. Happy St David’s day. Yesterday, in a majestic performance at the Dispatch Box, the Minister for the Cabinet Office and Paymaster General confirmed to the House that Cabinet Ministers who oppose the European Union and support a no vote in the referendum can get access to Government documents on the EU referendum if they use the Freedom of Information Act. Today, we read on the front page of the Daily Mail that the Paymaster General is going to scrap the commission looking at the Freedom of Information Act. Mr Speaker, have you had notice from

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the Paymaster General that he is seeking to make a statement to the House to explain the very unusual behaviour of the Government in shelving their own commission?

Mr Speaker: I am bound to say to the hon. Gentleman that I have received no such indication that any Minister has any such intention. The matter to which the hon. Gentleman refers is a matter of ongoing interest. He and others, who are notably terrier-like and indefatigable in pursuit of their ends, will require no encouragement from me to deploy such parliamentary devices as are available to secure the matter further attention, if that is what they want.

If there are no further points of order—the House’s palate has been satisfied on that front, at any rate for today—we can move to the presentation of a Bill.

The Minister for Security (Mr John Hayes) rose—

Mr Speaker: For the benefit of those who attend to our proceedings, the convention is that a Minister nods and I note that, with some ceremony, we have received the due nod from the Minister for Security.

Bill Presented

Investigatory Powers Bill

Presentation and First Reading (Standing Order No. 57)

Secretary Theresa May, the Prime Minister, Secretary Philip Hammond, Secretary Michael Fallon, Secretary David Mundell, Secretary Theresa Villiers, the Attorney General, Robert Buckland and Mr John Hayes presented a Bill to make provision about the interception of communications, equipment interference and the acquisition and retention of communications data, bulk personal datasets and other information; to make provision about the treatment of material held as a result of such interception, equipment interference or acquisition or retention; to establish the Investigatory Powers Commissioner and other Judicial Commissioners and make provision about them and other oversight arrangements; to make further provision about investigatory powers and national security; to amend sections 3 and 5 of the Intelligence Services Act 1994; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 143) with explanatory notes (Bill 143-EN).

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Devolution (Bank Holidays) (Wales)

Motion for leave to bring in a Bill (Standing Order No. 23)

1.31 pm

Mr Mark Williams (Ceredigion) (LD): I beg to move,

That leave be given to bring in a Bill to devolve to Welsh Ministers responsibility for the determination of specified bank holidays in Wales; and for connected purposes.

I am lucky enough to be bringing this issue before the House on St David’s day, when people throughout Wales and the diaspora throughout the UK and indeed the world will be celebrating the life of Dewi Sant and our Welsh cultural identity. May I wish you, Mr Speaker, and everybody, dydd gwyl Dewi hapus—happy St David’s day?

St David or Dewi Sant is a renowned and inspirational figure in Wales. He was responsible for spreading Christianity throughout much of western Britain. He was the Archbishop of Wales, and was a fundamental figure in the establishment of religion in our country. He had particular links to my constituency, being the grandson of King Ceredig, the founder of the kingdom of Ceredigion, while his mother, Saint Non, was born in the village of Llanon. It is said that St David was educated at the Henfynyw monastery, near the village of Ffos-y-ffin, in the centre of Ceredigion. It was in the village of Llanddewi Brefi in 550 AD, at a raucous meeting of the synod of the Welsh church, that David, finding it difficult to make himself heard, placed a cloth on the ground and the earth rose to form a mound on which he could stand and preach. That miracle of St David put the village of Llanddewi Brefi on the map long before the contemporary Dafydd of “Little Britain” fame.

It should therefore be no surprise that the calls for making St David’s day a public holiday in Wales are particularly strong in my constituency. His contribution to Wales cannot and should not be ignored. Today, many people will publicly celebrate dydd Dewi Sant in my constituency and throughout Wales, with celebratory parades, school pupils wearing traditional Welsh costumes, the singing of Welsh songs and the recitation of poetry. People will take part in eisteddfodau and cymanfaoedd canu—singing festivals—displaying some of Wales’s rich cultural traditions. We will see celebrations of Welsh culture in London, with children from the London Welsh School, the London Welsh Centre and the Wales in London group doing their bit to promote Wales and the life of Dewi Sant. The St David’s day service in St Mary Undercroft ended a few moments ago, and I am glad to see that the House of Commons catering department has risen to the occasion by providing fabulous Welsh cuisine procured from Wales, which I would encourage all hon. Members to experience.

It is no coincidence that I am using this opportunity to pursue the issue of devolving the power to set public holidays on this very important day for Wales. The issue of St David’s day and the ability of Wales to designate public holidays has been raised many times over many years by many people from across the political spectrum. I raised it in a Westminster Hall debate in 2011, and that was followed in the same year by the introduction by

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the hon. Member for Stratford-on-Avon (Nadhim Zahawi) of a Bill to make St George’s day and St David’s day public holidays in England and Wales respectively.

I want to make it clear that the Bill does not ask the House to authorise or designate St David’s day as a public holiday, however much I hope it will become one, but, in the spirit of devolution, to ensure that our Senedd—our Assembly—has the powers to decide that matter. Despite the numerous calls to devolve this power, that has not yet come to pass, unfortunately, despite the fact that responsibility for public holidays is devolved to Scotland and that St Patrick’s day has been a public holiday in Ireland since 1903. St Patrick’s day has been used to build Ireland’s profile and to encourage tourism, which has provided a huge boost to its economy.

The Irish Government specifically set up the St Patrick’s festival group, which has aimed to make the celebration one of the finest in the world, to encourage innovation and creativity, to provide the opportunity for those of Irish descent to become involved and to project a positive, forward-looking image of Ireland to the rest of the world. Should such a power be devolved and should the Welsh Government make St David’s day a public holiday, there is every reason to believe that our national festival could be very proactively marketed throughout the world in a more robust way than it has been to date. It would provide a fantastic opportunity for a small country such as ours to make its mark, and it seems preposterous to me that the Senedd cannot make such a decision.

I acknowledge that there have been some concerns from parts of the business community about the possible designation of St David’s day as a public holiday, but that should not stop us giving the responsibility to Wales for the Welsh Government to consult on it and come to a considered decision. We could follow the precedent of Scotland. St Andrew’s day was designated a bank holiday by the Scottish Parliament in the St Andrew’s Day Bank Holiday (Scotland) Act 2007. At the time, concerns were raised about the possible negative impact that devolving the power would have on businesses and the Scottish economy, but they seem to have been unfounded. It would be a very strange state of affairs if anybody called for that to be reversed. After consultation, the Scottish Government chose to allow banks to decide whether to close on St Andrew’s day and companies to decide whether to observe it as a public holiday. There has since been growing calls and growing support for companies to recognise the holiday fully. Critically, that decision was taken in Scotland.

In Wales, we have similar levels of support for creating a new public holiday. A poll taken at the time of the Scottish decision showed that 87% of people in Wales wanted St David’s day to become a bank holiday. Some 65% of those surveyed stated that they were willing to sacrifice another bank holiday to see St David’s day officially designated. Indeed, my thanks should go to ITV Wales, which in highlighting the Bill has undertaken an online poll. As of 10 o’clock this morning, over 90% of respondents agree that St David’s day should be a bank holiday.

Such support is also seen in all of the parties in the National Assembly, many of whom made manifesto commitments to have the power devolved, and others who provided evidence to the Silk commission called for the power to be given to the Senedd. From the very beginning of the life of the National Assembly, Welsh

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political opinion, as well as growing public opinion, has been united in its call for St David’s day to become a public holiday.

In 2011, it looked as though the UK Government might finally, as part of their tourism strategy—after pressure, I would candidly suggest, from the Liberal Democrats—consider giving the Welsh Assembly the power to move the spring bank holiday from early May to 1 March. However, nothing came of that, despite great political support for it in Wales. The Welsh Government wrote to the Wales Office in 2013 to call for the power to be devolved, but they were rebuffed, apparently by the then Secretary of State for Wales, the right hon. Member for Clwyd West (Mr Jones). Despite public and political support rivalling the support shown in Scotland, such calls have continued to fall on deaf ears, with successive UK Governments refusing to consider devolving the power to Wales.

If the power continues to be reserved to Westminster, it seems unlikely that St David’s day will become a public holiday any time soon, despite the huge support for that in our country. Is it not now time for the Welsh people to be able to decide whether it is right that St David’s day becomes a public holiday in Wales, rather than that being decided—and rejected—in Whitehall? With only eight public holidays in the UK and in Wales, we have among the fewest of any country in the world. Wales should be able to choose whether to create a new public holiday or to replace it with another. I feel that that decision should be made, through our Senedd, by the people of Wales.

Let me finish by repeating the words of Dewi Sant:

“Do the little things that you have seen me do and heard about. I will walk the path that our fathers have trod before us.”

“Do the little things” or “Gwnewch y pethau bychain” has become a well-known phrase in Wales, and this is all that many of us in Wales are asking for. We are asking for Wales to be given the power that others already have—the power for Wales to choose whether and how to make St David’s day a public holiday, and to celebrate his life and our Welsh national identity how we choose. With this Bill, we would be able to do those little things that could have a very big impact on Wales. I urge the House to support this call.

Question put and agreed to.


That Mr Mark Williams, Gerald Jones, Liz Saville Roberts, Hywel Williams, Jonathan Edwards, Huw Irranca-Davies, Albert Owen, John Pugh and Carolyn Harris present the Bill.

Mr Mark Williams accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 11 March, and to be printed (Bill 145).