03/02/2016 House of Commons


03/02/2016

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children's mental health and eating disorders where we tragically see a

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real growth. The money is there. Statement, the Prime Minister. With

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permission I would like to make a statement on progress with our

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renegotiation. The House has now had the chance to study the document is

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published by the European Council yesterday. I believe this is an

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important milestone in the process of reform, renegotiation and

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referendum that we set out in the manifesto and which this Government

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is delivering. We have now legislated for the referendum and we

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are holding the renegotiation. Let me set out the problems we are

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trying to fix and the progress we have made. First, we don't want our

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country to be bound up in an ever closer political union in Europe, we

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are a proud and independent nation with proud democratic institutions

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that has served us well over the centuries. Europe is about working

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together to advance shared prosperity and security. It's not

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about being sucked into a European superstate, not now, not ever. The

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draft text set out in full the special status according to the UK

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and clearly cards us out further political integration and it will go

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further to make clear that EU countries don't even have to aim for

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a common destination. This is a formal recognition of the flexible

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Europe that Britain has been long arguing for. In keeping Britain out

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of ever closer union I wanted to strengthen the role of this House

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and all national parliaments. We have a proposal that if Brussels

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comes up with legislation we don't want we can get together with other

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parliaments to block it with a red card. We have also proposed a new

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mechanism to finally enforce the principle of subsidiaries which

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states that as far as possible, powers should sit in this parliament

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and not in Brussels. Every year the European Union has to go through the

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powers they exercise and work out which are no longer needed and

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should be returned to nation states. I said we wanted to make Europe more

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competitive and deal with rule-making and bureaucracy that

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costs jobs in Britain and indeed across the EU. We asked for

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commitments on all of the areas central to European competitiveness.

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We want trade deals, the single market completed, and trade... There

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are specific targets to reduce burdens on business in key sectors.

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Barra is a new mechanism to drive through targets -- varies. Cutting

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the target year-on-year. We are clear that Britain will keep the

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pound, in my view for ever. We need to be just as clear that we can keep

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the pound in a European Union that will be fair to our currency, but

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simply the EU must not become the euro only club and if it does it

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would not be a club for us. We call for a series of principles to

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protect the single market for Britain, we said there must be no

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discrimination against the pound, no disadvantage for businesses using

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our currency wherever they are located in the EU and no option for

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Britain to ever again be forced to bailout Eurozone countries. These

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principles are reflected in the draft text which is legally binding.

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Britain has the ability to act to uphold principles and protect our

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interests. We should be clear that British jobs depend on being able to

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trade on a level playing field within the European single market,

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whether in financial services or cars or anything. This plan if the

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grid would apply the strongest possible protection for Britain from

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discrimination and unfair practices. Never again could the EU try the

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so-called location policy, the settling of complex trades in Euros

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must only take place in Eurozone countries, that would outlaw that

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sort of proposal. These are protections we could not have if

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Britain were outside the European Union. We want to deal with the

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pressures of immigration which have become too great. Of course we need

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to do more to control migration from outside the European Union, we will

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be announcing more measures. We need to control migration within the EU

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too. The draft text represents the strongest ever tackling of closing

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down back routes to Britain. It includes active against fraud and

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preventing those who provide a threat from coming to the country.

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It will overturn a decision which has allowed illegal migrants to

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marry and stay in the country. It has been a source of perpetual

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frustration that we can't impose our own rules on third country nationals

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coming from the European Union. After the hard work of the Home

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Secretary we have a proposal to put it right. There are also new

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proposals to reduce the pull factor that our benefit system exerts

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across Europe by allowing instant access to welfare from the day

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someone arrives. People said Europe wouldn't even recognise we have this

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problem but the text explicitly recognises that welfare systems act

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as an unnatural draw to come to the country. Our manifesto set out four

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objective is to solve the problem, I mention these at PMQs. We already

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delivered on two of them within months of the general election.

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Already migrants from the EU will not be able to claim Universal

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Credit while looking for work and if they haven't found work in six

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months they can now be required to leave. In these texts we have secure

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proposals for the other two areas. If someone comes from another

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country in Europe, leaving their family at home, their child benefit

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will be paid at the local rate and not the generous British rate. We

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have reduced the draw of the generous in work benefits. People

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said it would be impossible to end the idea of something for nothing

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and that a four year restriction was out of the question but that is now

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what is in the text. An emergency brake that will mean people coming

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from within the EU will have to wait four years until they have full

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access to the benefits. The European Commission clearly said that Britain

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qualifies already to use the mechanism so with the necessary

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legislation we could implement it shortly after the referendum.

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Finally let me be absolutely clear about the legal status of these

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changes that are now on offer. People said we would never get

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something that was legally binding but this plan if agreed will be

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accepted at. These changes will be binding in international law and

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will be deposited at the UN. They cannot be changed without the

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unanimous agreement of every EU country including Britain. So when I

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said I wanted change that is legally binding and irreversible that is

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what I have got. In key areas treaty change is envisaged in the

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documents. We are making real progress in all four areas but the

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process is far from over. There are details that still need to be pinned

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down and intense negotiations to try to agree the deal with 27 other

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countries. It is right that the house debate

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the issues in detail, so following a council statement later, the

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government will make time for a full day of debate on the floor of this

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house. Mr Speaker, as we approach this choice, let me be clear about

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two things. First, I'm not arguing, and I will never argue, that Britain

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could not survive outside the European union. We are the fifth

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largest economy in the world, the biggest defence player in Europe

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with one of the most extensive and influential diplomatic networks on

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the planet. The question is not good Britain succeed outside the European

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Union, but how will we be most successful? How will we create the

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most jobs and have the most influence on the rules that shape

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the global economy and affect us? How will we be most secure? I always

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say the best answer to those questions can be found within a

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reformed European Union. Let me say again, if we cannot secure the

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changes, I rule nothing out. Second, even if we secure the changes, you

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will never hear me say that this organisation is now fixed all stop

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far from it. There will be many things to remain to be reformed and

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Britain will remain -- continue to lead the way. We will make sure

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Britain works are the countries of Europe, for the businesses and

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people of Europe and crucially for the British people who want to work

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and have security and get on and make the most of their lives. If we

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stay, Britain will be in there, keeping a lid on the budget,

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stripping away unnecessary regulation and seeing through the

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commitments we have secured in this renegotiation. Ensuring that Britain

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truly can have the best of both worlds. In the parts of Europe that

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work for us and out of those that don't. In the single market, free to

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travel around Europe, part of an organisation where cooperation on

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Security and trade can make Britain and its partners safer and more

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prosperous, but with guarantees that we will never be part of the euro,

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never be part of Schengen, never be part of a European army, never be

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forced to bail out the Eurozone with taxpayer money and never be part of

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a European superstate. That is the prize on offer, and a clear path

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that can lead to a fresh settlement the Britain in a reformed European

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Union. A settlement that offers the best future for jobs, security and

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strength for the country, a settlement, that as the manifesto

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promised, this security and comfort at every stage of their lives. That

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is what we are fighting for and I commend this statement to the house.

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Jeremy Corbyn. Thank you, Mr Speaker, I'm grateful to the Prime

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Minister for sending me a copy of the statement 45 minutes ago, an

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hour ago, I'm sorry. And I'm pleased he has decided to finally update the

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house. But it is a bit unfortunate that despite his trumpeting of

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sovereignty of national parliaments in the EU negotiations, the Prime

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Minister didn't think to come and update our own Parliament first. I

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hope he had a good day in Chippenham yesterday, but I note that he spent

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a lot of time answering questions from journalists when it would have

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been more respectful to the house to come here first and answer the

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questions from members. In truth, Mr Speaker, his negotiation, in

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reality, is a Tory party drama that is being played out in front of us,

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as we see at the moment. The Labour Party is committed to keeping

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Britain in the European Union because we believe it is in the best

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framework for European trade and cooperation in the 21st-century and

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in the best interests of people in this country. We believe the Prime

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Minister has been negotiating the wrong goals in the wrong way to the

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wrong reasons. All the sound and fury, the Prime Minister has ended

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up exactly where he knew he would be, making the case to remain in

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Europe, which is what he always intended, despite renegotiating

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spectacles choreograph for TV cameras over the whole continent. Mr

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Speaker, as his own backbenchers keep telling us, the proposals from

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the European Council are simply tinkering around the edges. They

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have little impact on what the EU delivers for workers in Britain

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British business. We welcome the proposals for the majority of

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national parliaments to have a veto over commission legislation, even if

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it is heavily qualified, it seems the Prime Minister has finally moved

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towards the Labour Party view on the issue and we welcome that.

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Protecting non-Eurozone states is necessary but we cannot let these

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proposals hamper efforts to regulate the financial sector, including

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bankers bonuses. The crucial detail of the emergency brake on workers

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benefits for EU migrants is entirely absent. When is that information

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going to be made available? But in any case the Prime Minister calls

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the strongest package ever on the abuse of free movement, but it

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doesn't actually tackle the real problems around the impact on

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migration -- of migration on jobs, wages and community. They demand

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action to support public services in areas of high population growth, and

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regulation to prevent the subsidising of low pay and the

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grotesque exploitation of migrant workers by some very unscrupulous

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employers. It is the same with competitiveness. Is the Prime

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Minister out to strengthen genuinely competitive markets, or is this

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proposal a figleaf for increasing presser to privatise public services

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and a reduction of consumer standards, environmental protection,

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all workers rights? This is why Labour will continue to oppose the

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threats to services and rights from the negotiations and we need to

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reform to ensure that all European governments have the right to

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intervene and to protect publicly owned industries and services. This

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side of the house is delighted that the Prime Minister has been forced

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to back down on his hopes to water down workers rights. However, Mr

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Speaker, we want to see workers rights further protected and

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extended within the European Union. We need a strengthening of workers

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rights in a really social Europe. And we want to see a democratic

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reform to make the European Union decision-making more accountable to

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its people. We must drive economic reform to put jobs and sustainable

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growth at the centre of European policy and work with partners in

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Europe to bring tax avoidance under control. That is so we can get a far

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better deal than the Chancellor managed with Google last week. But,

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Mr Speaker, to extend the employment protections we have to remain within

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the European Union or leave the field to the Conservative Party to

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make a bonfire of workers rights. The Prime Minister says he has

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secured Britain's exclusion from Schengen, European army and a

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European superstate. The Prime Minister is living in a never-never

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land. We have never argued for those things and we don't intend to. We

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need to work with allies in Europe to achieve more progressive reforms

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and to build a more democratic Europe that delivers jobs,

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prosperity and security for all of its people. We must do this

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together, which is why when the referendum is finally held we will

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be campaigning to remain a member but I end by asking the question to

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the Prime Minister, does he now agree that once this smoke and

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mirrors sideshow deal is finally done, we will get on with it, end

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the uncertainty and the referendum will be held on June 23, 2016? Can I

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thank the Right Honourable gentleman for his questions. First of all, on

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the issue of making a statement today rather than yesterday, I felt

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yesterday I was in possession of all the documents but I didn't think

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every member of the house would be, so I thought it better to give

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honourable members a day to read the documents and have the debate today.

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It gave me the added advantage of being able to visit Chippenham,

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which, of course, is the town of the right honourable gentleman's birth

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and I was able to thank them for putting him on Earth and delivering

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him safely to this place. In terms of the questions, first of all, he

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criticises the issues we put on the table, getting out of ever closer

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union -- union, waiting times for welfare and guarantees for fairness

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in ins and outs. I know he did not read the Labour manifesto, but I

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did, and all of those things were in the Labour manifesto. Labour

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actually wanted a two-year welfare weight rather than a four-year wait,

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but the other elements of the gauche elation were supported by Labour --

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of the negotiation. So they can feel they have a mandate for backing

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these measures. He asked about the detail on the emergency migration

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brake because there are gaps in the text, and he is right about that. We

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need to secure the best possible outcome at the February Council. He

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asked about the danger of exploitation of migrant workers, and

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this is an area where we agree, as we have boosted the gang master

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license authority and putting better coordination between them and the

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National Crime Agency and we're actually making sure there are more

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investigations and prosecutions. There is one area where we

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profoundly disagree, and other socialist governments in Europe take

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my view, which is that TTIP will be good for jobs, growth and business.

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I'm not sure I should advise him to spend more time with trade unions,

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but if he did with Swedish trade unions and other northern European

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countries, he might find that they support TTIP because they want jobs

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for their members. In the end, what I would say to the right honourable

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gentleman and all members across this house, this is an important

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moment for our country. Yes there will be areas of disagreement

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between Conservative and Labour but we are involved in trying to get the

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best negotiation for Britain. And the European Parliament plays a part

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in that and the party of European Socialists does, so I urge more

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members that if you want to have no more something for nothing and get

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Britain out of ever closer union, and fairness between those in and

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out of the euro and you want a more competitive and successful Europe,

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let's fight this together. Mr Kenneth Clarke.

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Mr Speaker, the Prime Minister has actually achieved more on the big

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issues in this negotiation that I -- than I ever expected, and I suspect

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more than hardline Eurosceptics ever expected, which is why they are

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denouncing it so fiercely. But as he says, he still has to deliver it.

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Does he accept he will have great difficulty persuading governments in

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Central and Eastern Europe in particular to accept that their

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citizens lawfully working here alongside English people in key

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sectors like the health service and the construction industry should

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have lower take-home pay in the first few years than their English

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workmates? So, if he has to do offer something in exchange for that,

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could he perhaps consider underlining our Nato commitment to

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those countries as their biggest concern is future military

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adventures by Putin's Russia. And to underline our role to not be the

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leading military contribute through Nato to the European alliance would

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be a good offer to make by deploying troops in order to get what is a

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difficult concession for our partners to make in those countries?

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My right honourable friend has huge experience of European negotiations,

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both treaty negotiations and also ongoing negotiations on the Council

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of ministers, so I'm grateful for what he says. He is right that these

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are difficult issues. My argument is that while we have the free movement

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of people that many British people take advantage of. The second point

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I make is, when countries in Europe have problems they believe key

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national interest, we have to be flexible enough to deal with them.

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That is what the agreement is showing. And it shows they have the

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support of the European Commission and that will reassure some of the

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states in Europe who have misgivings. He is right that we can

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reassure them about investment in their security, because I think that

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is an important issue, with Putin to the east, with Isil to the south, so

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this is a moment where we need to work together. We in the Scottish

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National party warmly welcome the opportunity to make the positive

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case for the European Union. It really matters that we are part of

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the world's largest single market. It helps we can determine rules and

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laws that applied for us and it matters we have a social Europe with

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rights and protections for citizens and workers. Will the Prime Minister

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commit to a positive campaign to remain in the European Union and not

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resort to the negative tactics of project fear? On the Prime Minister

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's negotiations, can iced suggest he stops presenting -- pretending to

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have one major victory. He has not secured the treaty change and much

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else besides. What is at stake is much much bigger than recent

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discussions. It is about whether we are in the EU or not, and that is

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what the debate across the UK will be in the run-up to the referendum.

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The timing matters to electorates and the governments of Scotland,

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Wales and Northern Ireland as well is that there are elections in

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London in May. The First Minister of Northern Ireland... I think the

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first ministers of Northern Ireland, Wales and Scotland deserve a bit

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more respect. From the Tory side. The First Minister of Northern

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Ireland Arlene Foster and the Deputy First Minister of Northern Ireland

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Martin McGuinness have written to the Prime Minister today. They say

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the following and I think that honourable and right honourable

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say. We believe that holding a say. We believe that holding a

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referendum as early as June will mean that a significant part of the

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run in parallel with those elections run in parallel with those elections

:23:20.:23:26.

and risks confusing issues at a moment when clarity is required. We

:23:27.:23:31.

believe that the European referendum is of vital importance to the future

:23:32.:23:42.

of the whole UK. The debate should therefore be free of this. The Prime

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Minister should defer until at least late in the year. Will the Prime

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Minister confirm that he will be respectful of the views of the

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governments of Scotland, Wales and Northern Ireland and defer the

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referendum beyond June? May I take the opportunity to ask the Prime

:24:04.:24:08.

Minister to answer the question he has failed to do so so far, can he

:24:09.:24:13.

confirmed there are still no safeguards in place which would stop

:24:14.:24:17.

Scotland being taken out of the EU against the will of the Scottish

:24:18.:24:24.

electorate. Yes, of course I think when this campaign comes and we need

:24:25.:24:29.

first and agreement and recommended position by the British Government

:24:30.:24:32.

and the rest of it but when it comes in should be positive campaign. In

:24:33.:24:40.

terms of treaty change and whether this is legally binding, as I

:24:41.:24:43.

explained it is and it does envisage treaty change. In terms of timing,

:24:44.:24:49.

it is a matter for the house who debated it and ruled out coinciding

:24:50.:24:52.

with the Scottish, Welsh and London elections. The house did not rule

:24:53.:25:00.

out holding a referendum at another time and specifically the former

:25:01.:25:03.

First Minister said six weeks was the appropriate gap. Obviously we

:25:04.:25:10.

have to wait to see if an agreement is reached but I disagree in that I

:25:11.:25:16.

don't believe this is confusing issues, people are personally

:25:17.:25:20.

capable, six or more weeks after one set of elections to consider

:25:21.:25:24.

another. I know that the Leader of the Opposition whose party is in

:25:25.:25:28.

control of Wales was pressing me to hold the referendum on the 23rd of

:25:29.:25:34.

June. There is a range of opinions out there and the best thing to do

:25:35.:25:37.

is to get the deal done and hold a referendum. This is all about

:25:38.:25:48.

voters' trust. Why has my right honourable friend, in order to stay

:25:49.:25:55.

in, bypassed so many promises and principles? Our national parliament,

:25:56.:25:59.

he said at Bloomberg, is the root of our democracy. Not a majority of red

:26:00.:26:06.

cards in other parliaments. That we would have for long treaty change --

:26:07.:26:16.

We were promised a fundamental change in our relationship with the

:26:17.:26:22.

EU and that we would deal with excessive immigration numbers which

:26:23.:26:26.

has now been whittled down to an issue about in work benefits

:26:27.:26:30.

controlled by the European Court of Justice. Above all, the entire

:26:31.:26:35.

package Mr Speaker, we were told and promised would be legally binding

:26:36.:26:42.

and also irreversible. But now it will be stitched up by a political

:26:43.:26:48.

decision, by the European Council, and not by a guaranteed treaty

:26:49.:26:56.

change at the right time. And this, I have to say to the Prime Minister,

:26:57.:27:00.

is a wholly inappropriate way of dealing with this matter. I have

:27:01.:27:07.

great respect for my honourable friend but on the issue of whether

:27:08.:27:11.

it is legally binding I do believe he is wrong, if the document is

:27:12.:27:14.

agreed it would be an international law decision and the European Court

:27:15.:27:19.

of Justice has do take that into account. He follows these things

:27:20.:27:24.

closely, Denmark negotiated the same sort of opt outs and 23 years on

:27:25.:27:31.

they clearly stand and are legally binding and those are the facts. He

:27:32.:27:35.

asked whether we are meeting what we set out in terms of promises that we

:27:36.:27:40.

made, we made clear promises to get Britain out of the ever closer

:27:41.:27:46.

union. That is a promise we kept. Restrict welfare benefits for

:27:47.:27:50.

immigrants and that is a promise we are keeping. Real fairness between

:27:51.:27:53.

ins and outs, that is a promise we are keeping. In every area we have

:27:54.:28:00.

met the promises that we set out. There will be those who say, we

:28:01.:28:04.

didn't ask for enough or we need more reform. I believe these reforms

:28:05.:28:09.

get to the heart of the concerns of the British people who feel this

:28:10.:28:13.

organisation is too much of a political union, too bureaucratic

:28:14.:28:18.

and not fair for non-euro countries. And we want control of immigration.

:28:19.:28:21.

Those four things are largely delivered. I would ask my colleagues

:28:22.:28:27.

on all sides of the house, I have sat on both sides and heard about

:28:28.:28:33.

the Maastricht Treaty, Amsterdam Treaty, but I've never seen a Prime

:28:34.:28:37.

Minister standing here with the unilaterally achieved declaration of

:28:38.:28:40.

bringing powers to our country and that is what is within our grasp.

:28:41.:28:48.

Will the Prime Minister join me in welcoming the launch of an

:28:49.:28:54.

environmentalists for Europe today, quoted by Stanley Johnson the father

:28:55.:28:59.

of the right Honourable Member for books bridge and South Ruislip. Will

:29:00.:29:04.

he also welcome the article setting out the importance for science and

:29:05.:29:07.

technology of remaining in the European Union, penned by the

:29:08.:29:12.

brother for the right-armer Member for Uxbridge and South Ruislip! --

:29:13.:29:18.

the right Honourable Member. Will he tell him the importance of family

:29:19.:29:25.

solidarity, and joining the swelling ranks of Johnsons. We can't have too

:29:26.:29:33.

many Johnsons agreeing. He is right. There is also the columnist Rachel

:29:34.:29:36.

Johnson, we will have to go after her. He makes an important point

:29:37.:29:41.

about universities because we all complain rightly about the European

:29:42.:29:46.

budget and that is why it is so important it has do fall every year,

:29:47.:29:51.

but we did safeguard negotiations, the money that British universities

:29:52.:29:55.

benefit from on a disproportionate basis. As for completing the happy

:29:56.:30:00.

family pack of the Johnsons, we may have to wait longer. I would call

:30:01.:30:09.

the Honourable Member if he were standing, but he isn't. As we are

:30:10.:30:15.

driven towards an ever closer union and to political union, how does it

:30:16.:30:21.

help to try to fit a couple of emergency brakes that lie within the

:30:22.:30:26.

control of the EU and not us? Isn't the only way to control borders, tax

:30:27.:30:30.

revenues and welfare systems, to leave and be a good European and let

:30:31.:30:34.

them get on with their political union? Well, I don't agree with that

:30:35.:30:41.

because I think actually what we are doing is making sure that it's very

:30:42.:30:46.

clear that Britain is carved out of an ever closer union and that is an

:30:47.:30:50.

advance. Indeed it is something that he and other colleagues have been

:30:51.:30:55.

asking for quite rightly. I have always believed it is right because

:30:56.:30:59.

our view is that we are not therefore political union but

:31:00.:31:01.

cooperation and trade and working together on the things that matter.

:31:02.:31:06.

These documents can change and this is all drafts, but one of the issues

:31:07.:31:12.

is that the EU has gone further than I thought they would and said this

:31:13.:31:16.

which colleagues will find interesting: the references to an

:31:17.:31:19.

ever closer union do not offer a basis for extending the scope of any

:31:20.:31:24.

provision of the treaties or secondary legislation. They should

:31:25.:31:28.

not be used to support an extensive interpretation of the competences of

:31:29.:31:32.

the union or the power of institutions as set out in the

:31:33.:31:36.

treaty. That has never been said before in those ways and for those

:31:37.:31:40.

who care about getting out of an ever closer union, this goes a long

:31:41.:31:44.

way to achieving more in many ways that we asked for. The European

:31:45.:31:52.

continent has seen flows of people and refugees, largely since the end

:31:53.:31:58.

of the World War II and the Balkans are becoming more volatile and part

:31:59.:32:03.

of Turkey is not behaving in a helpful way. Of any of the

:32:04.:32:09.

negotiations the Prime Minister has been involved in, have any increased

:32:10.:32:16.

the security of Europe or the UK? I would argue both, when it comes to

:32:17.:32:21.

the security of the continent we recognise that Europe's external

:32:22.:32:25.

border, although it is not ours, because run-off in Schengen, it does

:32:26.:32:30.

matter and that is why we send more representatives to help with asylum

:32:31.:32:35.

and immigration than any other country and why we are happy to do

:32:36.:32:38.

even more and we work with Greece and Turkey. There is an important

:32:39.:32:43.

change which increases the security of Britain going forward. First of

:32:44.:32:48.

all, because we are not in Schengen, foreign nationals, we don't have to

:32:49.:32:53.

let them into Britain and long may that be the case. The key changes

:32:54.:32:58.

that the Home Secretary and I have secured about protecting the

:32:59.:33:02.

immigration system from fraudsters and sham marriages and criminals and

:33:03.:33:06.

people who get married to European nationals to get into our country,

:33:07.:33:11.

frankly, they have become even more important and we will secure those

:33:12.:33:14.

if this goes ahead from within the EU. Boris Johnson. CHEERING

:33:15.:33:24.

Since you have been so kind as to call me, perhaps I could ask the

:33:25.:33:28.

Prime Minister how these changes as a result of this negotiation will

:33:29.:33:35.

restrict the volume of negotiations... Legislation coming

:33:36.:33:40.

from Brussels, to restrict the treaty to assert the sovereignty of

:33:41.:33:43.

this House of Commons and these houses of parliament. Let me take

:33:44.:33:48.

those issues in turn. He is right to raise them. In terms of the

:33:49.:33:52.

sovereignty of the House, that is what we did in 2010 through the

:33:53.:33:56.

European referendum act, and something I am keen to do even more

:33:57.:34:00.

on to put beyond doubt that the House of Commons is sovereign, and

:34:01.:34:04.

that is something we will look to do at the same time as concluding the

:34:05.:34:10.

negotiations. In terms of what are we doing to restrict the flow of

:34:11.:34:13.

legislation from Brussels? The first time ever in here is a commitment

:34:14.:34:17.

not only that Europe is to examine all of its competencies every year

:34:18.:34:20.

to work out what should be returned to nation states, subsidiary in

:34:21.:34:27.

action rather than words, but the proposal to cut Brussels regulations

:34:28.:34:30.

with these bureaucracy cutting targets and that has never been

:34:31.:34:35.

there before. If you look across this you can see welfare powers

:34:36.:34:38.

coming back, immigration powers coming back that I have just spoken

:34:39.:34:43.

about. Bailouts powers coming back and of course the massive return of

:34:44.:34:49.

power achieved that the last parliament. The biggest return of

:34:50.:34:53.

power from Brussels to Britain since joining the EU, and we have nailed

:34:54.:34:56.

it down in these discussions to make sure they can't get round it. These

:34:57.:35:02.

were all key objectives. I'm not saying it's perfect, or that the

:35:03.:35:05.

European Union will be perfect after the deal, it certainly won't, but

:35:06.:35:10.

will the British position be better and stronger? Yes, it will. Since

:35:11.:35:16.

assuming office in 2010 the Prime Minister has on occasion tried to

:35:17.:35:20.

his credit to limit the increases in the contributions by the UK to the

:35:21.:35:26.

European Union budget. Varying degrees of success on that front.

:35:27.:35:31.

Can he tell us as a result of the agreement, given that the UK pays ?9

:35:32.:35:37.

billion into the EU every year, can he tell us how much our contribution

:35:38.:35:43.

will go down in net terms each year as a result of this agreement? We

:35:44.:35:49.

have already done the European budget agreement which was the first

:35:50.:35:54.

time, when you look at the seven year financial perspective that is

:35:55.:35:57.

the budget over the last seven years and it will be lower over these

:35:58.:36:01.

seven years than the last and that is a real terms cut, something no

:36:02.:36:05.

one thought would possible. The exact amount of money we give does

:36:06.:36:10.

depend sometimes on the growth and success of our economy and one of

:36:11.:36:13.

the consequences of our strong growth and the difficult times in

:36:14.:36:17.

the Eurozone is that it has meant a little bit more has been contributed

:36:18.:36:21.

but the overall financial perspective is coming down and it is

:36:22.:36:27.

good news for Britain. My right honourable friend has achieved, I

:36:28.:36:33.

believe, quite a remarkable result because of the legally binding

:36:34.:36:37.

nature of the document which he brings back if it is accepted by the

:36:38.:36:43.

European Council. In that context he will know that one of the principal

:36:44.:36:47.

problems that has bedevilled the UK relationship with the European Union

:36:48.:36:52.

has been the capricious interpretation of the treaties,

:36:53.:36:55.

sometimes to circumvent what the UK has believed to be its true treaty

:36:56.:37:02.

obligations. In view of the remarkable specificity of this

:37:03.:37:05.

document, does he agree with me that this will be a very powerful tool in

:37:06.:37:09.

preventing that from happening in the future? I think my right

:37:10.:37:14.

honourable friend makes an important point, if we stand back and ask how

:37:15.:37:18.

it is that powers have been taken from this house to Brussels, it's

:37:19.:37:24.

really happened in two ways. You have had a successive range of

:37:25.:37:27.

treaties passing competencies from Britain to Brussels. That can't

:37:28.:37:32.

happen any more because we legislated in the last parliament

:37:33.:37:33.

for the referendum lock. So if me or any subsequent Prime

:37:34.:37:41.

Minister tried to sign up to a treaty to pass powers, they

:37:42.:37:45.

couldn't. The second way the powers get past is through the judgment of

:37:46.:37:49.

the European Court of Justice, and that is why securing closer union is

:37:50.:37:53.

important because it says if we can get this agreed, you cannot use that

:37:54.:37:58.

clause to drive a ratchet of competency is going from Britain to

:37:59.:38:03.

Brussels. So the two routes for further integration where Britain is

:38:04.:38:06.

concerned have been effectively blocked off. Can the Prime Minister

:38:07.:38:15.

confirm that nothing in this renegotiation waters down important

:38:16.:38:19.

security cooperation at the EU level? Like intelligence sharing,

:38:20.:38:24.

joint investigations and the EU arrest warrant. And that when a deal

:38:25.:38:28.

is done, finally, he will join members on this side of how -- the

:38:29.:38:33.

house to make a strong case that our membership of the EU helps bring

:38:34.:38:36.

criminals to justice and keeps Britain safe. The security argument

:38:37.:38:46.

is an important one. When the Europe minister was asked questions

:38:47.:38:53.

yesterday, is it consistent to say, as we do in the document that

:38:54.:39:00.

security is a national competence, so is it consistent to say that and

:39:01.:39:03.

also say it's important for security? It's important that when

:39:04.:39:09.

we come to policing and intelligence services and those core competencies

:39:10.:39:14.

they are for the house and for government decision. But there are

:39:15.:39:18.

ways we can cooperate in Europe to make ourselves safer, making sure we

:39:19.:39:22.

know when criminals cross borders and when we exchange passenger name

:39:23.:39:26.

records to keep a safe, which is why when we opted out of the Justice and

:39:27.:39:31.

home affairs area, repatriating about 100 powers to Britain, we

:39:32.:39:35.

stayed in the ones that mattered for keeping us safe. I think that's

:39:36.:39:39.

important in demonstrating that we both maintain national security as a

:39:40.:39:42.

national competence but work with partners to keep our people say. Can

:39:43.:39:50.

I first say to the Leader of the Opposition that I prefer what he

:39:51.:39:53.

describes as the drama of the Conservative Party to the tragedy of

:39:54.:40:00.

his Labour Party. Mr Speaker, whether or not an emergency brake

:40:01.:40:03.

kicks in is ultimately the decision of the European union, and the level

:40:04.:40:11.

of education is a decision for the European Union, not the UK.

:40:12.:40:14.

Ultimately the benefit level sent abroad is a decision on the EU, not

:40:15.:40:21.

the UK. Is it clear we are not sovereign in these areas and we do

:40:22.:40:26.

not have independent control in these policy areas, and is at the

:40:27.:40:30.

decision on the -- on the referendum on decisions on laws and borders to

:40:31.:40:35.

be determined here, not applied by someone else. With great respect for

:40:36.:40:42.

my right honourable friend, I thought he explained clearly on the

:40:43.:40:46.

radio that he would be for leaving the EU, even without the

:40:47.:40:49.

renegotiation. He was very honest and frank about it, and in terms of

:40:50.:40:54.

dramas and tragedies he will echo the old insurance advert that we

:40:55.:40:57.

should not turn a drama into a crisis. What I would say about the

:40:58.:41:04.

emergency brake is that the European Commission have been clear, and it

:41:05.:41:07.

says in the documents, that they consider the kind of information

:41:08.:41:11.

provided by the UK shows the type of exceptional situation that the

:41:12.:41:14.

intended to cover and exists in the intended to cover and exists in the

:41:15.:41:20.

UK today. So I am all for maximising the sovereignty of the house and our

:41:21.:41:24.

government and the ability to do things, but we said we wanted no

:41:25.:41:27.

more something for nothing and we want the welfare brake and we want

:41:28.:41:31.

to be able to deny benefits to people before they have been here

:41:32.:41:35.

four years, and this says it can happen as soon as the legislation

:41:36.:41:41.

allows. Could I reassure the Prime Minister that in my estimation most

:41:42.:41:46.

of us in Northern Ireland agree with him that we would be much more

:41:47.:41:51.

successful in the European Union van out, and could we urge that the

:41:52.:41:56.

referendum be held later than June so all aspects could be fully

:41:57.:42:00.

discussed and debated? But could I ask him if and when the negotiations

:42:01.:42:06.

are completed that there is a positive staying in result for the

:42:07.:42:12.

referendum, so can he see the UK taking a more positive and engaged

:42:13.:42:15.

role within the structures of the European union? What I would say to

:42:16.:42:21.

the honourable gentleman is, were there to be agreement in February, I

:42:22.:42:27.

don't think a four-month period before a referendum would be too

:42:28.:42:31.

short. I think four months is a good amount of time to get across the key

:42:32.:42:35.

arguments and facts and figures and the both sides to be able to make

:42:36.:42:39.

their points. I think it will be equally important in Northern

:42:40.:42:43.

Ireland and I give him the guarantee that if there is an agreement, I

:42:44.:42:47.

will personally spend time in Northern Ireland making the points I

:42:48.:42:53.

think most important. As for the role of the EU in helping to bring

:42:54.:42:57.

about the successful transformation of Northern Ireland, there have been

:42:58.:43:02.

some very positive moves in terms of grants and structural funds to help

:43:03.:43:10.

build a strong economy that we need. As a former Secretary of State for

:43:11.:43:13.

Social Security, can I ask my right honourable friend to clarify the

:43:14.:43:18.

status of the agreement on migrant benefits? The EU has no competence

:43:19.:43:22.

over benefits rules in member states unless they conflict with the

:43:23.:43:26.

freedom of movement clause in the treaty, so if the proposed changes

:43:27.:43:33.

do not conflict with the treaty, we could have introduced them

:43:34.:43:36.

immediately without using negotiating clout on this issue, but

:43:37.:43:40.

if the changes do not conflict with the treaty they will be struck down

:43:41.:43:45.

by the EU court unless the treaty is changed first. What I would say is

:43:46.:43:55.

that the view is that this emergency brake can be brought in under the

:43:56.:44:00.

existing treaties but only with legislation through the European

:44:01.:44:05.

Parliament and on an accelerated timetable the leader of one of the

:44:06.:44:12.

parties said it could take one, two, three months. What it makes clear is

:44:13.:44:16.

you can act in this way legally, and crucially, in my view in the view of

:44:17.:44:26.

the British public, but quickly. When the Prime Minister meets the

:44:27.:44:31.

various leaders of the EU, can he make it clear to them that the

:44:32.:44:34.

result of the referendum is to be decided by the black -- British

:44:35.:44:37.

people and they should not be trying to interfere in any way of the

:44:38.:44:42.

British's peoples views, and will he say to the Irish leader that it not

:44:43.:44:47.

helpful and in fact very complimentary to the people of

:44:48.:44:49.

Northern Ireland that he implied that of the British people decided

:44:50.:44:57.

to leave the European Union that it would threaten the peace process. I

:44:58.:45:00.

absolutely agree with the honourable lady that this is a decision to the

:45:01.:45:03.

British people and British people alone. We certainly don't want to

:45:04.:45:08.

hear lectures from other people about that. Because this does affect

:45:09.:45:17.

Britain's relations with the rest of the world and other issues, there

:45:18.:45:20.

may well be people who want to make a positive contribution, and that is

:45:21.:45:25.

a matter for them. The only thing I would say about the Irish leader is

:45:26.:45:27.

that the priest processes secure and that the priest processes secure and

:45:28.:45:31.

we must keep going, but I do believe he is a friend of the United Kingdom

:45:32.:45:37.

-- the peace process is secure. He spoke very strong for Britain at the

:45:38.:45:41.

European Council and was influential in trying to build goodwill and

:45:42.:45:45.

saying that all in the European Union should recognise that of a

:45:46.:45:49.

country has a national interest that is at stake and needs things fixed

:45:50.:45:52.

we need to be a flexible enough organisation with, because otherwise

:45:53.:45:56.

we won't be able to sort anything out. The Prime Minister has said

:45:57.:46:01.

that if we vote to leave the EU he wants to continue as Prime Minister,

:46:02.:46:07.

a combination I would fully support. And he certainly fancies himself as

:46:08.:46:13.

a negotiator. So given that we have a net contribution each year to the

:46:14.:46:18.

EU of ?19 billion, and given that we have a trade deficit with the

:46:19.:46:23.

European Union of ?62 billion, and if we were to leave we would be the

:46:24.:46:27.

single biggest export market of the European Union, does he think he has

:46:28.:46:32.

the ability to negotiate a free trade agreement from outside of the

:46:33.:46:35.

EU without handing over ?19 billion per year? I have great respect for

:46:36.:46:41.

my honourable friend who I think wanted to leave the EU whatever came

:46:42.:46:48.

out of these negotiations. And I am sure he will make his argument is

:46:49.:46:53.

powerfully. Obviously, you have to look at all of the issues, and once

:46:54.:46:58.

this debate starts, people want to look at the alternatives. Would

:46:59.:47:02.

Britain be better off in a customs union arrangement like turkey? Would

:47:03.:47:07.

we be better off in a free trade agreement? Would we be better than

:47:08.:47:11.

the situation of Norway and Iceland? I think the Norway example is not a

:47:12.:47:17.

strong example because they actually contribute more per head to the EU

:47:18.:47:24.

and look at the EU legislation passed in Brussels but I think it

:47:25.:47:27.

will be an important part of the debate to come. As the Prime

:47:28.:47:33.

Minister has so far said in the exchanges, he doesn't seem to have

:47:34.:47:38.

persuaded any of the critics on his side over the virtues of his

:47:39.:47:42.

negotiations. He may have persuaded the Home Secretary for reasons that

:47:43.:47:49.

we don't understand, but apparently none of the other critics. Maybe he

:47:50.:47:57.

can help me out, I don't know. This is a very important issue for our

:47:58.:48:01.

country, but in the end it won't be decided in this chamber. All of us

:48:02.:48:04.

will have to reach our own conclusions and the only thing I

:48:05.:48:08.

would say to honourable members is that if you passionately believe in

:48:09.:48:11.

your heart that Britain is better off outside the EU, you should vote

:48:12.:48:15.

that way and even if you think it's on balance that they are better off,

:48:16.:48:24.

do it. Don't take a view because of what your constituency association

:48:25.:48:28.

might say or you are worried about a boundary review or you think it

:48:29.:48:31.

might be advantageous this way or that way. Do what is in your heart.

:48:32.:48:34.

If you think it's right for Britain, do that. Since no one else has done

:48:35.:48:47.

it so far after nearly an hour, and as my mum always says I should say

:48:48.:48:51.

thank you, can I thank the Brymon is the beginning is a choice in the

:48:52.:49:00.

first place. What is the point of having an emergency brake on your

:49:01.:49:05.

car if the back-seat driver, namely the European Commission, has the

:49:06.:49:09.

power to tell you when and for how long you should put your brake on

:49:10.:49:14.

that -- foot on the brake pedal? This is a different situation when

:49:15.:49:17.

they are telling us in advance that because of the pressures we face,

:49:18.:49:20.

this is a break that we can use and a break we can use relatively

:49:21.:49:26.

rapidly after a referendum. I think it would make a difference. The

:49:27.:49:31.

facts are these, and 40% of EU migrants coming to Britain are

:49:32.:49:36.

accessing the in work benefits system. The average payment per

:49:37.:49:42.

family is ?6,000. Don't tell me ?6,000 quite a major financial

:49:43.:49:47.

inducement. I it's over 10,000 people getting over ?10,000 a year.

:49:48.:49:52.

The benefits system, because you get instant access, is an unnatural

:49:53.:49:56.

drawer to the country so one of the things we should do to fix

:49:57.:49:59.

immigration is change it and that is what we are going to agree. Will he

:50:00.:50:04.

acknowledge that the referendum will be won and lost on bigger issues

:50:05.:50:10.

than the renegotiation, not least on the judgment that the greater

:50:11.:50:13.

challenges facing us better solved when countries work together. So

:50:14.:50:19.

again can I ask him to welcome the establishment of environmentalists

:50:20.:50:22.

for Europe which recognises that cross-border problems require

:50:23.:50:24.

cross-border solutions and highlights the crucial role the EU

:50:25.:50:28.

weighs in protecting wildlife and nature in the country. Where you

:50:29.:50:34.

have genuine cross-border problems you need to work across borders to

:50:35.:50:37.

make sure you have a strong solution and I think the key issues our

:50:38.:50:42.

prosperity and security, but insecurity comes environmental

:50:43.:50:45.

security. Britain at the Paris accords was able to play a strong

:50:46.:50:51.

role because of the example of getting carbon emissions down and

:50:52.:50:54.

having a strong plan for the future encourage other countries to do the

:50:55.:50:59.

same thing. That brought about a better deal for the best -- rest of

:51:00.:51:00.

the world. Much has been said about the

:51:01.:51:09.

Conservative Party manifesto that he and the rest of these benches fought

:51:10.:51:13.

on. I have an electronic copy of that in front of me now. Should the

:51:14.:51:18.

Prime Minister succeed in his negotiations he will have achieved

:51:19.:51:22.

not only the letter of what we promised, but also the spirit, and

:51:23.:51:26.

perhaps most important of all, it would give the British people a

:51:27.:51:31.

chance to vote for a reformed Europe ought to vote for the uncertainty of

:51:32.:51:36.

leaving. I am very grateful to my honourable friend. I do think that

:51:37.:51:41.

we are delivering the manifesto in fact and spirit, not just by doing

:51:42.:51:45.

something people we thought we would not deliver on, which is to hold a

:51:46.:51:49.

referendum. I remember sitting over there when Tony Blair stood here and

:51:50.:51:53.

said let battle commence, let the referendum begin over the

:51:54.:51:57.

constitutional treaty, and the fact that that referendum was never held

:51:58.:52:01.

in many ways poisoned a lot of the debate in Britain. That is why the

:52:02.:52:05.

manifesto is so clear about the referendum and the renegotiation

:52:06.:52:09.

aims. Some people will say the better approach is to go in, kick

:52:10.:52:13.

over the table, walk out of the door and say I won't come back in unless

:52:14.:52:17.

you give me a list of impossible demands. That was never the plan we

:52:18.:52:22.

set out. The plan we set out was to address, specifically, the biggest

:52:23.:52:26.

concerns of the British people about competitiveness, closer union,

:52:27.:52:30.

fairness and about migration and that is what this negotiation, if we

:52:31.:52:33.

can complete it, that is what I believe it will do. Can I

:52:34.:52:40.

congratulate the Prime Minister on the progress he has made in tackling

:52:41.:52:44.

what I think voters from all parties see as unfair

:52:45.:52:55.

ness of workers claiming benefits in the UK. If we left the European

:52:56.:53:02.

Union would this put at risk our core operation in Calais with French

:53:03.:53:09.

authorities to protect UK borders? -- cooperation. She raises an

:53:10.:53:12.

important point and there is no doubt in my mind that the agreement

:53:13.:53:18.

is incredibly beneficial. It works well for both countries, but for

:53:19.:53:25.

Britain, being able to have border controls in France and dealing with

:53:26.:53:29.

people there, that is something we should be very proud of and do

:53:30.:53:34.

everything we can to sustain. It is part of the European cooperation

:53:35.:53:41.

that we have. Given the difficulty of getting any change to the EU

:53:42.:53:46.

membership opposed by the other 27 countries, what we have got is as

:53:47.:53:50.

good as anyone might have expected and more and I congratulate the

:53:51.:53:54.

Prime Minister on his achievement. But will my right honourable friend

:53:55.:53:58.

confirmed that once the European Council has made its decision he

:53:59.:54:04.

will respect the views of those ministers who might publicly

:54:05.:54:08.

expressed the opinion that the UK should now leave the EU and that the

:54:09.:54:12.

careers of those ministers in this Government would be jeopardised or

:54:13.:54:19.

threatened as a consequence? I can certainly give my honourable friend

:54:20.:54:24.

that assurance. We are still in the process of negotiation and the

:54:25.:54:28.

manifesto said that we wanted the best possible deal for Britain and

:54:29.:54:33.

we will work on that together. If the deal is agreed, whether it is in

:54:34.:54:38.

February or later if it takes more time then there will be a cabinet

:54:39.:54:42.

meeting to decide if we can take the recommended position to the British

:54:43.:54:47.

people and if that position is to recommend we stay in a reformed

:54:48.:54:52.

European Union then yes, ministers who have long-standing views and

:54:53.:54:55.

want to campaign in another direction are able to do that. The

:54:56.:54:59.

Government will still have a position. Not a free for all but a

:55:00.:55:03.

clear Government position from which ministers can depart. They should

:55:04.:55:07.

not suffer disadvantage because they take that view. The Prime Minister

:55:08.:55:15.

has now listened to the views of the EU president and the other 27 heads

:55:16.:55:20.

of state in the European Union about his proposals. In the spirit of his

:55:21.:55:23.

own one nation respect agenda, will he also now listened to the heads of

:55:24.:55:30.

governments in the devolved parliaments of the UK who are

:55:31.:55:33.

unilateral in their belief that his preferred referendum timetable is

:55:34.:55:40.

disrespectful and wrong? In terms of the respect agenda my right

:55:41.:55:44.

honourable friend the Europe Minister has had conversations with

:55:45.:55:48.

their heads the devolved administrations. In terms of the

:55:49.:55:54.

referendum date, we need an agreement first, but I don't believe

:55:55.:55:59.

that a four month period, six weeks or more between one set and another

:56:00.:56:04.

of elections, I don't believe that is in any way disrespectful and I

:56:05.:56:07.

have great respect for the electorate in our countries that

:56:08.:56:10.

they can separate these issues and make a decision. I commend my right

:56:11.:56:18.

honourable friend. King to his commitment to offer the British

:56:19.:56:21.

people a choice on this matter and I support very much what he has said

:56:22.:56:24.

about maximising the sovereignty of this Parliament. Would he not agree

:56:25.:56:31.

that the proposals to agree the support of continental parliaments

:56:32.:56:34.

to block EU directives that this Parliament opposes does not

:56:35.:56:38.

constitute a fundamental reform that he seeks? What I would argue is that

:56:39.:56:45.

the red card proposal is something new. Something that did not

:56:46.:56:48.

previously exist. Of course it will take a lot of communication between

:56:49.:56:54.

parliaments but where it is more powerful than the previous proposals

:56:55.:57:00.

is that this would be an absolute block, if you get the right number

:57:01.:57:03.

of parliaments together, the commission wouldn't go ahead. It

:57:04.:57:11.

goes alongside the subsidiary test which takes place, getting Britain

:57:12.:57:15.

out of an ever closer union, it is one more measure that demonstrates

:57:16.:57:23.

we believe in national parliaments. There is a much broader case for

:57:24.:57:30.

continued UK membership of the EU beyond the four items in the Prime

:57:31.:57:34.

Minister's negotiations, based on jobs, economic interests, collective

:57:35.:57:39.

security and our place in the world. Does the Prime Minister accent that

:57:40.:57:44.

if we voted to leave the European Union, but then found ourselves

:57:45.:57:48.

still having to accept all of the rules of the single market, that

:57:49.:57:52.

would be to swap our position as a rule maker for that of being a rule

:57:53.:57:58.

taker and that is not control and it is not the right future for Great

:57:59.:58:03.

Britain. As ever the right Honourable Member speaks clearly and

:58:04.:58:09.

powerfully. There are bigger arguments that will take place over

:58:10.:58:13.

the coming months and I'm not over claiming about the four areas we

:58:14.:58:17.

have made progress but I merely say that they relate to the four things

:58:18.:58:21.

that most concern the British people about Europe and we are somewhere

:58:22.:58:25.

down the road of fixing them. The point he makes about being a rule

:58:26.:58:29.

maker and not a rule taker, is vital. Written is a major industrial

:58:30.:58:35.

economy with a huge car and aerospace industry and important

:58:36.:58:40.

financial services. We need to be around the table making the rules

:58:41.:58:44.

because otherwise there is a danger that the rules will be made against

:58:45.:58:48.

you and that is what we need to avoid. Among the other important

:58:49.:58:56.

measures successfully negotiated by my right honourable friend the Prime

:58:57.:59:00.

Minister I welcome in particular the recognition of the need to be more

:59:01.:59:03.

competitive to exploit the untapped potential of the single market and

:59:04.:59:09.

press on with vital trade negotiations with the United States

:59:10.:59:14.

right honourable gentleman confirm right honourable gentleman confirm

:59:15.:59:17.

that when these negotiations are I hope happily concluded, the national

:59:18.:59:24.

debate must move on to the real questions relating to the safety,

:59:25.:59:28.

economic security and prosperity of the UK and the role we are to play

:59:29.:59:32.

in the world over the decades to come. My right honourable friend is

:59:33.:59:37.

absolutely right and we will be holding this debate at a time of

:59:38.:59:41.

great uncertainty and insecurity in our world. We have Russia with its

:59:42.:59:48.

destabilisation of the Ukraine to our East and the horrors of Daesh to

:59:49.:59:53.

the south. This is a time when we need to work closely with our

:59:54.:59:57.

neighbours and friends to make sure that we can deliver greater security

:59:58.:00:01.

for our people. It is true to say that of our security is our special

:00:02.:00:10.

relationship with the United States and these things are vital, but in

:00:11.:00:16.

the modern world passenger name records and criminal records

:00:17.:00:18.

information systems, sharing information about terrorism and

:00:19.:00:23.

fighting together against the Islamist extremism, that we see not

:00:24.:00:27.

just in Syria and Iraq but tragically in our own countries

:00:28.:00:31.

across the European Union. These are important issues. Can I wish him and

:00:32.:00:37.

the British negotiation team well for what remains of this process?

:00:38.:00:42.

Will he acknowledge that all of the major threats and challenges Britain

:00:43.:00:46.

faces as a country from international terrorism to climate

:00:47.:00:50.

change demands that we work closely and collaboratively with our close

:00:51.:00:53.

neighbours and not relegate ourselves to a position of isolation

:00:54.:00:59.

and impotence? My judgment in all of this is that I want things that

:01:00.:01:03.

increase the power and the ability of Britain to fix problems and deal

:01:04.:01:09.

with our own security and stability and RM prosperity. What matters is

:01:10.:01:12.

whether we are able to deal with these things now. -- our own

:01:13.:01:20.

prosperity. We need to get rid of the pettiness on small things that

:01:21.:01:24.

don't actually make a difference and focus on prosperity and jobs. That

:01:25.:01:32.

is the focus. A large number of Members are seeking to catch my eye.

:01:33.:01:35.

The Prime Minister on several occasions has been here for long

:01:36.:01:39.

periods to respond to questions but there is now a premium on brevity

:01:40.:01:46.

which I'm sure will be demonstrated now. Can I point out to my right

:01:47.:01:50.

honourable friend that the former director-general of the Council of

:01:51.:01:54.

ministers has said, and I quote, ministers has said, and I quote,

:01:55.:01:58.

there is no possibility to make a promise that will be legally binding

:01:59.:02:03.

to change the treaty later. He then uses a word that I would describe as

:02:04.:02:11.

male bovine excrement. Can the Prime Minister give a single example of

:02:12.:02:15.

where the European Court of Justice has ruled against the treaties in

:02:16.:02:19.

favour of an international agreement such as this one he is proposing?

:02:20.:02:25.

Well, as I said to our right honourable friend the Member for

:02:26.:02:34.

Stone, Denmark negotiated the same opt outs and they still stand 20

:02:35.:02:40.

years on and are no binding. -- and are binding. In July 2005, four

:02:41.:02:49.

weeks after suicide bombers murdered 52 people on the London transfer

:02:50.:02:55.

network, Hussain Osman tried to blow himself up on a Hammersmith and City

:02:56.:03:00.

Juba line, fleeing to Italy and speedily extradited to face justice

:03:01.:03:04.

in this country in a matter of weeks rather than the years that bilateral

:03:05.:03:08.

extradition process would have taken. Can the Prime Minister

:03:09.:03:11.

reassure me and honourable Members that nothing he does in the

:03:12.:03:15.

renegotiation process will put the functioning of the European arrest

:03:16.:03:22.

warrant at risk? I can give her that reassurance, the House debated the

:03:23.:03:26.

issue as we opted out of much of Justice and home affairs but we

:03:27.:03:30.

specifically opted in to the arrest warrant because it has proven

:03:31.:03:35.

valuable, not least in the case that she said and other cases, making

:03:36.:03:40.

sure that serious criminals can be returned to Britain. If we stay in

:03:41.:03:47.

her report -- if we stay in a reformed European Union it is more

:03:48.:03:50.

of a question about putting back in place something is powerful is what

:03:51.:03:57.

we have. I very much admire the tenacity, courage and skill with

:03:58.:04:01.

which my right honourable friend is defending and polishing this deal,

:04:02.:04:06.

but what happens to our 2010 manifesto commitments on the charter

:04:07.:04:09.

of fundamental rights and social and unemployment law? Well, we have put

:04:10.:04:17.

in place as I have said, and as my honourable friend the former Local

:04:18.:04:20.

Government Secretary of State said, put in place the things we put in

:04:21.:04:24.

the manifesto, the manifesto in which he and I stood at the last

:04:25.:04:30.

election. In terms of the social chapter, the social chapter no

:04:31.:04:33.

longer exists and it is merely part of the single market legislation.

:04:34.:04:39.

What we have secured for the first time is an annual reduction in terms

:04:40.:04:43.

of legislation to try to reduce the level of legislation and it can of

:04:44.:04:47.

course include the sorts of legislation that he is talking

:04:48.:04:54.

about. In the words of John Kenneth Galbraith, all great leaders have

:04:55.:04:59.

one characteristic in common, a willingness to confront the major

:05:00.:05:02.

anxiety of their people in their time. This and not much else is the

:05:03.:05:11.

essence of leadership. When the negotiations are complete will you

:05:12.:05:15.

confront anxiety and unequivocally come out in favour of EU membership?

:05:16.:05:21.

I have been very clear, if we achieve this negotiation I will work

:05:22.:05:26.

hard to convince people that Britain should stay in a reformed European

:05:27.:05:29.

Union and it would be very much in the national interest. I'm not a

:05:30.:05:34.

great JK Galbraith expert but when people have serious concerns as

:05:35.:05:39.

people do in our country about levels of immigration it is right to

:05:40.:05:43.

act to address those concerns and that is what part of this is about.

:05:44.:05:50.

In welcoming the Prime Minister's very substantial progress towards an

:05:51.:05:54.

agreement which would allow us to stay in, does he agree with me that

:05:55.:05:59.

one of the most important aspects is that it is legally binding and gives

:06:00.:06:03.

a lot more clarity about Britain's role within the EU, both in terms of

:06:04.:06:09.

the new dispensation but also in relation to existing treaties and

:06:10.:06:12.

therefore it is extremely powerful from a legal point of view and can

:06:13.:06:17.

only be revoked if we agree and it has embedded force into it. We have

:06:18.:06:26.

now heard from the former Attorney General and former Solicitor General

:06:27.:06:30.

who have great legal expertise, this would be legally binding as a matter

:06:31.:06:34.

of international law and of course it still is to be agreed but when

:06:35.:06:39.

agreed it would be irreversible because it would only be amended or

:06:40.:06:43.

revoked if all Member states Britain included decided to reverse it.

:06:44.:06:47.

Bearing lies the irreversible nature of it. I want us to stay in the

:06:48.:06:54.

European Union but the Prime Minister indicated he would seek to

:06:55.:06:58.

address the unfairness in the European sugar market which affects

:06:59.:07:03.

cane sugar refiners like Tate Lyle in my constituency. I wonder whether

:07:04.:07:07.

he can tell us if he has made progress on the issue. I think I

:07:08.:07:11.

will have to write to the honourable gentleman about that issue. The

:07:12.:07:21.

commission might agree that we have met the requirements to have a break

:07:22.:07:24.

but that is his decision and they may not agree in a few years' time

:07:25.:07:29.

at every step of these negotiations unfortunately still relies on

:07:30.:07:32.

somebody else giving us permission to make decisions for this country

:07:33.:07:36.

like the thousands of harmonised directives that we struggle with day

:07:37.:07:41.

in day out. Businesses have to ask permission of other countries and

:07:42.:07:44.

this is not what the British public wants.

:07:45.:07:48.

Let me deal with the harmonised directives. Because we have the

:07:49.:07:57.

test, the European Council and commission will have to look at all

:07:58.:08:01.

of these competences and return to the member state those that are no

:08:02.:08:04.

longer necessary. It does seem important progress in the area she

:08:05.:08:09.

states. On the issue of migration, the European Commission said as far

:08:10.:08:12.

as they were concerned, Britain qualifies now. Where she is right is

:08:13.:08:18.

that we know that as proposed, this is the ability to stop somebody

:08:19.:08:22.

getting full access to benefits for fall -- for four years but we also

:08:23.:08:26.

need to fill in the detail about how long the mechanism Larsson when it

:08:27.:08:32.

can be removed. In the Welsh general election, how will his conservative

:08:33.:08:35.

colleagues are given the economic stability that Wales so sorely needs

:08:36.:08:40.

when it might be overthrown by the referendum six weeks later? The

:08:41.:08:46.

British people, including people in Wales, voted for a government that

:08:47.:08:50.

would deliver economic stability but would also put this great question

:08:51.:08:53.

about Britain's future in front of the British people. As I have said

:08:54.:09:00.

before, if you look at public opinion in Wales, England, Scotland

:09:01.:09:03.

and Northern Ireland it is all, to a greater or lesser extent, in favour

:09:04.:09:07.

of holding a referendum. Some I think this is the right policy the

:09:08.:09:12.

whole of the UK. My right honourable friend has talked about what will

:09:13.:09:17.

happen with the European Court of Justice. Does he recall that under

:09:18.:09:23.

the Lisbon Treaty there is a requirement, a treaty requirement

:09:24.:09:26.

that the European Union should join the European Convention on human

:09:27.:09:30.

rights. That has not been implemented because the European

:09:31.:09:35.

Court of Justice says it's incompatible with EU treaties.

:09:36.:09:39.

Doesn't it show that, ultimately, although they might have to take

:09:40.:09:42.

something into account, they don't have to comply. I would say two

:09:43.:09:48.

things to my honourable friend. Firstly, I don't think the EU should

:09:49.:09:52.

join the European Convention on human rights. That has been the

:09:53.:09:55.

British government position. Secondly, we are committed in the

:09:56.:10:01.

manifesto to change the British perspective on the European Court of

:10:02.:10:05.

rights and have our own Bill and we will come forward with proposals

:10:06.:10:12.

that shortly. British workers benefit from employment rights

:10:13.:10:16.

guaranteed at the EU level, so can the Prime Minister assure the house

:10:17.:10:20.

that is renegotiation does not affect important employment rights,

:10:21.:10:24.

including rights to paid leave, equal rights for part-time workers

:10:25.:10:30.

and fair pay for agency workers? All of these rules are now no longer in

:10:31.:10:35.

a social chapter but are part of single market legislation. We have

:10:36.:10:39.

the opportunity now to make sure that single mark -- single market

:10:40.:10:43.

legislation is something that is proportionate in need to be done at

:10:44.:10:46.

the European level rather than national level and that is the

:10:47.:10:50.

ongoing conversation they should be under the rules set out here. Does

:10:51.:10:54.

my right honourable friend agree that all the documents issued

:10:55.:10:58.

yesterday, the most significant set of words are in Donald Tusk's letter

:10:59.:11:02.

to the members of the Council, where he says that in light of the UK's

:11:03.:11:06.

special situation under the treaties it is not committed further

:11:07.:11:12.

political integration. Isn't this precisely what the majority of the

:11:13.:11:15.

British people have always wanted, and to revive an old phrase, to be

:11:16.:11:21.

in Europe but not run by Europe? Is that not what he is achieving? I

:11:22.:11:24.

thought the letter was interesting in that regard. The truth is that

:11:25.:11:30.

Britain's membership of this organisation is different to other

:11:31.:11:32.

members of the organisation because of the document sets out, when not

:11:33.:11:36.

in the euro and we don't participate in Schengen and we keep our own

:11:37.:11:39.

border controls and we choose whether to participate in measures

:11:40.:11:44.

of freedom, security and justice. We opted out of the Justice and home

:11:45.:11:48.

affairs area and now we are opting out of ever closer union. Ala

:11:49.:11:52.

membership is different and we need to make that case as we go forward.

:11:53.:12:01.

With the South of Ireland being by far Northern Ireland's biggest

:12:02.:12:04.

export market, will the Prime Minister state what assessment he

:12:05.:12:07.

has made of the impact leaving the EU would have on the border in

:12:08.:12:13.

Ireland, whether continued free movement in Ireland can be

:12:14.:12:17.

guaranteed, and the damage that Customs border could on Northern

:12:18.:12:24.

Ireland's financial security? The honourable lady asks important

:12:25.:12:26.

questions and I think I'm writing saying that in the amendment to the

:12:27.:12:32.

European referendum Bill, and accepted here, there is a series of

:12:33.:12:43.

documents the form proposals and the alternatives and the obligations of

:12:44.:12:51.

rights in the European Union and through this process we should

:12:52.:12:54.

address the important question that affects one part of the United

:12:55.:13:05.

Kingdom quite intensely. In 2014/ 15, economic migrants came from the

:13:06.:13:07.

European Union, none of whom would be deterred by anything we have

:13:08.:13:12.

heard so far. Ever closer union might be taken out of the preamble

:13:13.:13:15.

but it remains in the central text of all of the treaties. On

:13:16.:13:20.

protecting the inner hand-outs, all that will happen is there will be a

:13:21.:13:23.

discussion and there are plenty of discussions the European Union and

:13:24.:13:27.

on competitiveness, that has been part of the European Union's own

:13:28.:13:31.

ambition since the Lisbon agenda of 1999. The thin gruel has been

:13:32.:13:38.

further watered down. My right honourable friend has a fortnight, I

:13:39.:13:41.

think, in which to salvage his reputation as a negotiator. Let me

:13:42.:13:50.

say that my honourable friend is extremely articulate the Lemi take

:13:51.:13:53.

two of the points and say why I think, actually he has got it wrong.

:13:54.:13:58.

Firstly, the principles that will be legally binding in terms of how

:13:59.:14:05.

currencies other than the euro are treated, is a real advance. That

:14:06.:14:11.

means, for instance, never again can the European Union suggest that you

:14:12.:14:15.

can only have the clearance of euros in Eurozone countries. That would

:14:16.:14:17.

have been disastrous for the financial service industries. They

:14:18.:14:22.

cannot even promote that again. That is so important, because if we

:14:23.:14:26.

weren't in the European Union we wouldn't have that protection at

:14:27.:14:32.

all. He doesn't understand the power of the principles of no

:14:33.:14:36.

discrimination and no disadvantage and no cost so we cannot bail out

:14:37.:14:41.

European countries as we were nearly forced to do last summer. One ever

:14:42.:14:45.

closer union, I would encourage him to look at section C, page nine of

:14:46.:14:52.

the documents. References to a closer union do not offer a base for

:14:53.:14:56.

extending the scope of the treaties. As far as I can remember, and I was

:14:57.:15:01.

advising a minister when we had the Maastricht debates and I sat through

:15:02.:15:05.

watching Lisbon and Nice and Amsterdam, this has never been set

:15:06.:15:09.

out that way. This means you cannot use ever closer union to drive the

:15:10.:15:14.

process of integration. If we have got in this house the protection we

:15:15.:15:18.

have to have a referendum if any minister ever suggest we sign up to

:15:19.:15:22.

another treaty that passes power, that is protection one, and we have

:15:23.:15:26.

this, we are well on our way to saying that our different sort of

:15:27.:15:30.

membership of the EU is not only safeguarded but it is being extended

:15:31.:15:35.

because not only are we out of the euro and Schengen, we're out of ever

:15:36.:15:41.

closer union as well. Once the workshop of the world, Birmingham in

:15:42.:15:44.

the West Midlands is now the industrial heartland of Britain. Key

:15:45.:15:48.

to that success is inward investment, including that of the

:15:49.:15:53.

3000 strong Jaguar factory in my constituency. Key to inward

:15:54.:15:57.

investment is continuing membership of the European Union. Does the

:15:58.:15:59.

Prime Minister agree with me that it is strongly in the best interests of

:16:00.:16:03.

Midland workers that we remain part of Europe? Provided we get the

:16:04.:16:08.

agreement we need, yes, of course I do. We are seeing an industrial

:16:09.:16:13.

renaissance in the West Midlands, a lot of it around the automotive

:16:14.:16:16.

industry. I've had a number of meetings with car manufacturing

:16:17.:16:23.

members and I had conversations with Jaguar Land Rover and others. I was

:16:24.:16:28.

with BMW in Germany and they make the point that Britain is a great

:16:29.:16:34.

centre for manufacturing and engines, and this comes to the point

:16:35.:16:38.

that the standards set in Europe that being a maker and not a rule

:16:39.:16:45.

taker. Following the Prime Minister's response to my recent PMQ

:16:46.:16:48.

I have taken the advice and cleared the diary for a debate tomorrow in

:16:49.:16:54.

this chamber on Parliamentary sovereignty. Given the importance of

:16:55.:16:58.

sovereignty to the new negotiations, will he join us in the debate and

:16:59.:17:01.

perhaps respond on behalf of the government? I'm very sorry. I've not

:17:02.:17:08.

been able to clear my diary. Tomorrow I have the Syria conference

:17:09.:17:14.

and many people are coming at night, over 30 presidents and prime

:17:15.:17:17.

ministers and the aim of trying to raise twice as much for the Syrian

:17:18.:17:22.

refugee appeal this year as we did last year, but I know my honourable

:17:23.:17:26.

friend is keen to have a word and I will make sure we fix that up. There

:17:27.:17:37.

are 14,000 jobs in old dependent on Europe and I'm very much in favour

:17:38.:17:41.

that we remain. But the Prime Minister mentioned in his statement

:17:42.:17:45.

that the emergency brake would apply immediately after the EU referendum,

:17:46.:17:49.

yet it was reported yesterday that it would be at least 18 months. Can

:17:50.:17:54.

he clarify which it is and will he report on any other transitional

:17:55.:17:59.

arrangements or measures? What I said is because this is not relying

:18:00.:18:04.

on changes to the treaty but will be European legislation, it can enter

:18:05.:18:08.

into force relatively shortly after the referendum but it will require

:18:09.:18:14.

some legislation and the leader will be one of the biggest parties in the

:18:15.:18:17.

European Parliament and he said it could be a matter of months. You

:18:18.:18:21.

could accelerate the process. It goes to show how much you need to

:18:22.:18:24.

bind everyone into the agreement that we hope to achieve in the

:18:25.:18:28.

coming weeks so that the parliament is able to pass the legislation as

:18:29.:18:33.

swiftly as possible. Does my right honourable friend agree that one of

:18:34.:18:36.

the biggest concerns about the direction of travel in the European

:18:37.:18:40.

Union is that there are countries within it, the Eurozone members that

:18:41.:18:45.

wish to integrate more deeply in terms of protecting their country.

:18:46.:18:49.

We have our own country -- currency but it was an incredibly important

:18:50.:18:52.

part of the negotiation ambition that we should be protected from any

:18:53.:18:57.

discriminatory measure that might prevent their ability to integrate

:18:58.:19:01.

more closely. Is that not why the proposed package is significant and

:19:02.:19:08.

that we have not just the position of two different speeds, but also a

:19:09.:19:12.

different destination from our European partners which gives us a

:19:13.:19:16.

relatively advantageous position. I'll make two points. This reference

:19:17.:19:19.

to a different destination is significant. We talk about Europe

:19:20.:19:24.

moving at different speeds but we might not all be trying to achieve

:19:25.:19:29.

the same ends. That is important. On the in and outs section, the most

:19:30.:19:34.

technical and in some ways the most impenetrable, there simple

:19:35.:19:40.

principles like the no cost principles as I referred to. There

:19:41.:19:44.

is also a very important concept in their that should we need to take

:19:45.:19:50.

action against financial supervision to secure our own financial

:19:51.:19:53.

stability, nothing should get in the way that, and think that's a very

:19:54.:19:56.

important clarification for the good of the country. With over 80% of

:19:57.:20:03.

businesses in my constituency wanting to stay in the EU, and over

:20:04.:20:08.

50% of jobs are linked to trade with the EU, so the member should be as

:20:09.:20:13.

vital for trade and prosperity, so this side of the house is united to

:20:14.:20:18.

campaign to stay in Europe. Don't we need now to end the uncertainty and

:20:19.:20:23.

have the referendum as soon as possible and campaign to stay in the

:20:24.:20:28.

EU. I am keen to end the uncertainty, obviously, but I'm not

:20:29.:20:30.

in a hurry if we can't get the right deal. We have set out what needs to

:20:31.:20:35.

be done and I think it's possible to be agreed in February, but we have

:20:36.:20:39.

to make sure we are patient, because getting this right really matters.

:20:40.:20:46.

Mr Speaker, week or so ago 2500 people turned up at Kettering to the

:20:47.:20:52.

first Go conference which is a grassroots organisation to get out

:20:53.:20:56.

of the EU and we had cross-party speakers at it and we are doing the

:20:57.:21:00.

same in Manchester. The thing that has not been commentated on, and I

:21:01.:21:03.

had an e-mail from the Prime Minister about this yesterday was

:21:04.:21:07.

the fact that he rules nothing out. This is a process where he might not

:21:08.:21:14.

get what he wants. We understand he might not get to Manchester because

:21:15.:21:17.

he is in negotiation, but could he come on the debris -- the 19th of

:21:18.:21:22.

February if he does not get what he wants, and would it be possible to

:21:23.:21:26.

drop off a tie at Downing Street for him? My honourable friend is always

:21:27.:21:34.

very generous with his time, his advice and now also with his

:21:35.:21:40.

clothing. The tie is here, and I think the Blazer will soon follow. I

:21:41.:21:44.

won't be able to come on the 19th of February. I hope I will still be in

:21:45.:21:48.

the thick of negotiations, but I will of course report back to the

:21:49.:21:55.

house and give the results. It is a very dairy site, I am bound to say,

:21:56.:21:59.

but who am I to object to that -- eight bearish item. I have suddenly

:22:00.:22:07.

been afflicted by a loss of hearing. I hope my ties knot to Gerrish. When

:22:08.:22:14.

the Prime Minister welcomes Northern Ireland, will he visit the

:22:15.:22:19.

devastating fishing villages, and the families angered by EU court

:22:20.:22:25.

rulings on terrorists dishes and is, and manufacturers smothered in red

:22:26.:22:29.

tape is and all of the companies whose employers run the gauntlet at

:22:30.:22:34.

Calais every week because of the chaotic EU immigration policy, and

:22:35.:22:38.

would he explained to them how he's red card. Any further destructive EU

:22:39.:22:43.

legislation when it requires him to get in 12 weeks 50% of parliaments

:22:44.:22:49.

across the EU to oppose proposals backed by their own governments?

:22:50.:22:53.

When I come to Northern Ireland I want to address those issues and

:22:54.:22:58.

when we look at the reform we have had in the fisheries policy, that

:22:59.:23:02.

has lead to improvement, but there is more to be done. When we look at

:23:03.:23:07.

the rules that manufacturers face, we have shown how we will cut

:23:08.:23:10.

bureaucracy, and in terms of one of the problems that has been happening

:23:11.:23:14.

between the Republic of Ireland and Northern Ireland in terms of sham

:23:15.:23:19.

marriages and people trying to get around immigration controls, that is

:23:20.:23:21.

expressly addressed in these documents. We need now to carry them

:23:22.:23:29.

into force. While the Prime Minister is trying his best to renegotiate

:23:30.:23:33.

the position, would he not agree that the reforms as they stand do

:23:34.:23:38.

not do anything to make the immigration system in this country

:23:39.:23:41.

fairer regardless of where people come from in the world? I do think

:23:42.:23:53.

they do make it fairer, because the year -- for years we have not been

:23:54.:24:00.

able to apply some of the rules regarding marriages between British

:24:01.:24:03.

nationals to European nationals, but now we can do this. All sorts of

:24:04.:24:08.

sham marriages and forces and criminals who have been getting

:24:09.:24:10.

round our immigration controls will no longer be able to. The Sunday

:24:11.:24:17.

Times has reported that as part of the negotiations the Prime Minister

:24:18.:24:21.

is seeking to deny UK citizens access to the fundamental rights

:24:22.:24:24.

guaranteed by the EU charter as part of his plan to restore the

:24:25.:24:27.

sovereignty of Parliament, does he appreciate that in the well-known

:24:28.:24:33.

case of McCormick against the Lord Advocate, the sovereignty is a

:24:34.:24:37.

distinctly English prince or, in Scotland the people are sovereign

:24:38.:24:41.

and they do not want human rights to be reduced. -- English principle.

:24:42.:24:50.

People in this country have had human rights long before the

:24:51.:24:55.

European union human rights Charter was even thought of, so we do not

:24:56.:24:58.

need these to be in force in Britain because we have our own Parliament

:24:59.:25:02.

and our own rights and soon we will have our own British Bill of Rights,

:25:03.:25:06.

as well. Families at home will be thinking about what the future holds

:25:07.:25:11.

and I think all aspects of disagreement are important to our

:25:12.:25:15.

constituents, but most of all is the protection for non-Euro countries.

:25:16.:25:19.

Will the Prime Minister guarantee this house that he will look at the

:25:20.:25:23.

detail, that there are no loopholes, as the Eurozone integrate, that we

:25:24.:25:29.

are not discriminated against? I will certainly do that, this will be

:25:30.:25:32.

complex, because the Eurozone countries want to be able to

:25:33.:25:35.

integrate more, and they want to know that we are not trying to block

:25:36.:25:40.

the necessary action that they need to take, but clearly what we want to

:25:41.:25:45.

make sure is that they will not make us disadvantaged as single market

:25:46.:25:49.

members. I'm sure the prime and Mr will welcome the news that the

:25:50.:25:53.

largest offshore wind farm in the world is to be built off the East

:25:54.:25:57.

Yorkshire coast -- the Prime Minister will welcome. Creating 2000

:25:58.:26:04.

jobs in the Humber Estuary and investing ?6 billion, so this shows

:26:05.:26:11.

that what ever the debate and frustration is, it is part of our

:26:12.:26:15.

country's interest to be involved in the EU as a leading player. I'm

:26:16.:26:20.

delighted with the news, we have given a lot of support to this

:26:21.:26:23.

energy and we have the biggest offshore wind market anywhere in the

:26:24.:26:28.

world because we have given the regulatory certainty that the

:26:29.:26:32.

industry needed. What they are achieving in the east of England is

:26:33.:26:36.

not just one big factory but an industrial regeneration of all the

:26:37.:26:40.

industries that relate to it, but irrespective of the outcome, we have

:26:41.:26:44.

got to make sure that Britain is the best place in the world to invest

:26:45.:26:47.

and grow a business, and I'm sure the arguments will come, there will

:26:48.:26:54.

be many that will want us to stay and making the argument, that will

:26:55.:26:57.

make us even more attractive, but we have got to wait until the starting

:26:58.:27:02.

gun is fired. The scope and scale of this reform package does actually

:27:03.:27:07.

reflect the key interests of a widespread range of people in this

:27:08.:27:11.

chamber, does the Prime Minister agree, the important thing now is to

:27:12.:27:14.

make sure that it is legally binding, and make sure the details

:27:15.:27:18.

are absolutely right, but above all sketch out the case for the economic

:27:19.:27:23.

reasons why we need to be in the EU, not least the fact that more than

:27:24.:27:27.

half of our foreign investment comes from the European Union. You are

:27:28.:27:32.

right. The next few weeks will be about trying to secure this detail,

:27:33.:27:36.

and then if that is successful they will be the bigger items that he

:27:37.:27:43.

refers to. I suspect there will always be issues which divide the

:27:44.:27:46.

Prime Minister and myself, but on this, the thing that matters is the

:27:47.:27:49.

national interest and what the Prime Minister has described in his

:27:50.:27:53.

statement as the greater prize. Isn't one of the real issues and the

:27:54.:27:57.

real benefits of having a document which is legally binding and

:27:58.:28:03.

ratified by the British people in a referendum, that it will be the

:28:04.:28:07.

British people who decide and that had the Prime Minister gone for a

:28:08.:28:11.

treaty change, that that would have been potentially scuppered by

:28:12.:28:15.

referendums in France, the Netherlands, Ireland and other EU

:28:16.:28:20.

member states, whose public might have come to a different view to the

:28:21.:28:25.

British one? I'm grateful for what you said, and clearly this is a

:28:26.:28:31.

legally binding arrangement, if it is agreed, for the reasons I've

:28:32.:28:34.

given, but we are aiming for a treaty change for those things that

:28:35.:28:39.

need to change the next and the treaties are altered. He makes a

:28:40.:28:44.

good point, the more we can bring this together in one place and

:28:45.:28:47.

explain what it is about, the more the British people will be able to

:28:48.:28:52.

see the force of the arduous. -- the next time the treaties are altered.

:28:53.:28:56.

-- the force of the argument. If the United Kingdom left the European

:28:57.:29:05.

Union we will be able to regain our seat at the world trade table, we

:29:06.:29:11.

lost its voice by being a member of the European Union. You are right,

:29:12.:29:19.

of course outside the EU one of the options is to take our seat at the

:29:20.:29:22.

World Trade Organisation 's, Buglioni problem with that, the

:29:23.:29:27.

World Trade Organisation has not signed many trade agreements in

:29:28.:29:29.

recent years -- the only problem with that. They have tended to be

:29:30.:29:35.

bilateral agreements, you have the EU agreement with Canada, the EU

:29:36.:29:40.

agreement with career. Britain could independently go and sign trade

:29:41.:29:43.

agreements, but we have got to weigh up the arguments, how much weight

:29:44.:29:48.

does Britain have as a member of the European Union, part of a market of

:29:49.:29:52.

five meeting people, will you are trying to negotiate the biggest and

:29:53.:29:55.

best trade deals with the fastest-growing countries in the

:29:56.:30:00.

world? -- part of a market of 5 million people. The German

:30:01.:30:11.

government and the European car lobby see this as an opportunity to

:30:12.:30:14.

water down new proposals on emissions standards and approval,

:30:15.:30:20.

does the Prime Minister accept that would be unacceptable to British

:30:21.:30:22.

drivers and make sure that will not be a bargaining chip? There is net

:30:23.:30:28.

connection between this renegotiation and those directives,

:30:29.:30:31.

the only connection I can see is the one I was making earlier, Britain

:30:32.:30:34.

needs to be in the room when these decisions are made for the good of

:30:35.:30:37.

our car industry and for our consumers stash there is no

:30:38.:30:43.

connection. The Prime Minister has set out but he would like... Sorry,

:30:44.:30:48.

that there are many things to be reformed, but if this grudging and

:30:49.:30:53.

threadbare deal is the very best the EU are prepared to concede to us,

:30:54.:30:58.

what serious hope is there of meaningful renegotiation if and when

:30:59.:31:04.

we are tied in long-term after a referendum? I would make a couple of

:31:05.:31:12.

points, first of all, this is not coming at the time of a more general

:31:13.:31:17.

treaty change, this is a one off, the first thing, because government,

:31:18.:31:21.

the first Prime Minister that from a standing start has achieved a

:31:22.:31:25.

unilateral agreement for the good of their country inside the EU and I

:31:26.:31:28.

don't think that is threadbare. It is very solid. There will be treaty

:31:29.:31:35.

changes in the EU coming down the track, and the process of reform is

:31:36.:31:40.

never fully completed. The other thing, there is no danger after this

:31:41.:31:43.

agreement being signed, and I would hope confirmed, in a referendum,

:31:44.:31:48.

there is no danger of year running away with a load of other plans for

:31:49.:31:51.

Britain, because we have got that referendum. Nothing can happen to

:31:52.:31:57.

Britain without a referendum in this country, that was such an important

:31:58.:32:01.

piece of legislation in 2010 and I think we have forgotten about that

:32:02.:32:05.

at times. The Liberal Democrats believe in the United Kingdom being

:32:06.:32:09.

in Europe but we also believe in the European Union being reformed. I

:32:10.:32:13.

congratulate the Prime Minister and his team and I wish them well. When

:32:14.:32:18.

he is leading the campaign to stay, will he reminds the British public

:32:19.:32:22.

of the mutual defence clause and the frankly, in his unstable world, it

:32:23.:32:27.

would be an absurd time to turn our backs on our nearest neighbours and

:32:28.:32:33.

allies? This will be an important... Thanks for your good wishes, for the

:32:34.:32:38.

final stages. This will be a big argument, in the campaign, like many

:32:39.:32:43.

on this site, I have seen Nato as the cornerstone of our defence, but

:32:44.:32:50.

in the modern networked world, the work you do, for instance, in the

:32:51.:32:54.

Mediterranean to try and stop people leaving Libya and making the

:32:55.:32:58.

perilous journey to Italy, that could be a Nato operation, but right

:32:59.:33:02.

now this is a European operation in which we are playing a leading part.

:33:03.:33:07.

Being a member of networks where you can work together for your security

:33:08.:33:16.

is important. Small businesses are looking at the targets for

:33:17.:33:19.

regulation reduction with optimism, but what they are seeking is a

:33:20.:33:24.

reassurance that these are stretched targets and the real goal has got to

:33:25.:33:28.

beat beyond them and make sure there is a real terms reduction in the

:33:29.:33:33.

amount of bureaucracy small-business face. You are right, what we have

:33:34.:33:43.

achieved is a 18% reduction, but what we want is a reduction in the

:33:44.:33:47.

existing base of regulation and legislation where it is not

:33:48.:33:50.

necessary and are going for the first time that is what we have

:33:51.:33:58.

secured targets towards. Can the Prime Minister confirmed that

:33:59.:34:02.

British women as rights at work, especially around paid maternity

:34:03.:34:05.

leave and it will play an anti-disconnection laws, will remain

:34:06.:34:07.

firmly in place and will not be affected by any deal? -- British

:34:08.:34:13.

women's rights. And how far has he got with the tampon tax? I can give

:34:14.:34:20.

you that reassurance, not only are those guarantees, but the action we

:34:21.:34:24.

have taken domestically on things like shared parental leave, which

:34:25.:34:27.

I'm very proud of and make Britain a more family friendly country. In

:34:28.:34:34.

terms of the tampon tax, this is difficult, because of the VAT rules

:34:35.:34:38.

in Europe, so I've nothing to add to what I've said before about this,

:34:39.:34:41.

but I totally agree about the desirability of trying to get this

:34:42.:34:47.

fixed. May I join other colleagues in thanking the Prime Minister for

:34:48.:34:51.

his work in negotiating a better deal for Britain in the European

:34:52.:34:54.

Union. I agree that these reforms are substantial and a better change,

:34:55.:35:03.

but what has he made in terms of reforms regarding car Manufacturing

:35:04.:35:11.

work? A constituent of mine contacted me yesterday to say, what

:35:12.:35:15.

is the impact on my grandchild if we left the European Union? Inevitably,

:35:16.:35:21.

these negotiations, they focus on important ideas and concepts,

:35:22.:35:27.

sovereignty and non-discrimination, deregulation, but we have got to

:35:28.:35:30.

make sure that this is a debate that is about consumers and how we are

:35:31.:35:36.

affected in terms of the freedom to travel and to study, the price of

:35:37.:35:40.

flights, the availability of roaming charges, and all the rest of it, how

:35:41.:35:44.

we are affected as pensioners and car workers and as young people

:35:45.:35:48.

looking for university places, and hopefully the debate will bring up

:35:49.:35:54.

these issues. The Prime Minister has outlined the action he has taken in

:35:55.:35:58.

the negotiations, but what is missing from his statement, with the

:35:59.:36:01.

respect, is any referral to the fishing sectors. There is too much

:36:02.:36:08.

prerequisite, farmers have two wade through red tape just to farm. --

:36:09.:36:16.

there is too much bureaucracy. Have a referendum as soon as possible and

:36:17.:36:22.

let's rid ourselves of the top EU, -- the top-heavy EU, and get out of

:36:23.:36:25.

Europe. When will the referendum take place? I can't give a date

:36:26.:36:30.

because we don't have agreement in place, but I would say that there

:36:31.:36:33.

have been significant improvements in the Common fisheries policy, not

:36:34.:36:37.

least dealing with the appalling situation of discards, but as for

:36:38.:36:43.

farmers, let the debate begin. Let's say from farmers and their

:36:44.:36:46.

representatives about what they think about these but they get and

:36:47.:36:51.

the actions we have taken to try and simplify the bureaucracy with you

:36:52.:36:53.

inspections, but I look forward to hearing from all farmers and their

:36:54.:36:58.

representatives stashed few were inspections. Thank you very much,

:36:59.:37:05.

the report is fantastic, but can I draw your attention to section B,

:37:06.:37:11.

and Donald Tusk's part on competitiveness. Especially small

:37:12.:37:17.

and medium enterprises. And the unnecessary legislation. This is

:37:18.:37:21.

what so many companies complain about and this is very welcome to

:37:22.:37:25.

all businesses, especially those who want to invest in Europe and the

:37:26.:37:28.

reason why we should be staying in the market which has over 500

:37:29.:37:29.

million people. Of course section B is important but

:37:30.:37:43.

it is worth looking at the detail on competitive which adds section B.

:37:44.:37:52.

Any referendum debate will centre on the bigger picture and the longer

:37:53.:37:56.

term challenge and deeper interest. As well as the issues raised by my

:37:57.:38:00.

honourable friend, the member for South Down, can he address, not a

:38:01.:38:05.

package he has come up with, the changes in relation to child

:38:06.:38:10.

benefit. We'll be extend to cross-border workers in a

:38:11.:38:15.

constituency like mine where it EU presets do apply? I will look

:38:16.:38:19.

carefully at that issue but I remember from conversations I have

:38:20.:38:24.

had, there are particular arrangements for the common travel

:38:25.:38:28.

area. But I will come back to the honourable gentleman. The legal

:38:29.:38:34.

certainty which the Prime Minister referred to in the protections in

:38:35.:38:39.

the economic government section of the document, are very important to

:38:40.:38:43.

maintain the status of London as an international business and financial

:38:44.:38:46.

centre. Would he agree with me one of the risks that would remain if

:38:47.:38:51.

this agreement or not successful to that position, would it be

:38:52.:38:57.

uncertainty of leaving a market we can grow, improve and strengthen and

:38:58.:39:01.

then having to try and get back in to the market from the outside at on

:39:02.:39:08.

certain cost, time and terms? He is right to talk about the importance

:39:09.:39:12.

of financial services and the City of London. We have 40% of Europe's

:39:13.:39:18.

financial services in the UK. The current arrangements work well

:39:19.:39:21.

because you can passport your weight to establish yourself in any

:39:22.:39:28.

European country. So those wanting alternatives will have to answer

:39:29.:39:31.

difficult questions as to how you put those protections in place. Can

:39:32.:39:37.

the Prime Minister confirm he is in receipt of a letter from my right

:39:38.:39:40.

honourable friend from Gordon, that makes it clear he does not think six

:39:41.:39:46.

weeks is a long enough gap between national elections and the

:39:47.:39:50.

referendum? It wasn't intentional, we will accept that, but can I

:39:51.:40:01.

stress the views of the former First Minister, and the real reason the

:40:02.:40:06.

Prime Minister once a June referendum is a short campaign is to

:40:07.:40:13.

cover up the obvious divisions within the Conservative Party? I

:40:14.:40:16.

don't think four months is a short period of time. By the end of four

:40:17.:40:21.

months, I think people might be sick of the whole subject. I notice the

:40:22.:40:28.

thumbscrews and the other instruments of torture available to

:40:29.:40:32.

the current First Minister, have been applied to the former First

:40:33.:40:37.

Minister. In a miraculous conversion, six weeks was enough,

:40:38.:40:40.

now six weeks is not enough. I wonder what she did to him? Can I

:40:41.:40:49.

thank the Prime Minister for giving the country the chance for a

:40:50.:40:54.

referendum. Would he agree he, I am this government are nothing more

:40:55.:40:59.

than tenants, his duty, while we serve to protect our island

:41:00.:41:02.

inheritance, our democracy, sovereignty and freedom. We have no

:41:03.:41:08.

right to sell it all, let alone cheaply to a bureaucratic and

:41:09.:41:12.

unaccountable institution like the EU? We are tenants, he is right.

:41:13.:41:19.

That is why I think after 40 years of the British people not having a

:41:20.:41:23.

say, when Europe has changed so much, it is right to give the

:41:24.:41:28.

British people say again. I wanted to give them the best possible

:41:29.:41:32.

chance, not between the status quo today and leaving altogether, but an

:41:33.:41:36.

settlement and plan for Britain, which they can choose to stay in, or

:41:37.:41:43.

get out of. Mr Tom Elliott, don't be diverted by the honourable gentleman

:41:44.:41:49.

next to you. Mr Speaker, I would not. One of the major drawbacks to

:41:50.:41:55.

businesses is the red tape and bureaucracy. I did note within

:41:56.:42:01.

yesterday's document said it would be repealing unnecessary legislation

:42:02.:42:05.

in that respect. When will the public and businesses be able to see

:42:06.:42:10.

what legislation is planned to be repealed? It is, as the document set

:42:11.:42:16.

out, it will be an annual process. What is different about this,

:42:17.:42:21.

instead of just words about deregulation, there are two

:42:22.:42:25.

mechanisms put in place. Once you enforce subsidiarity, and one for

:42:26.:42:30.

burden reduction targets. Those two things are new. On this side of the

:42:31.:42:38.

House, we want what is best for Britain when it comes to jobs and

:42:39.:42:42.

security. I have one vote and I believe there are aspects of the EU

:42:43.:42:45.

that needs serious scrutiny and reform. My constituents share those

:42:46.:42:52.

thoughts. This party has brought the opportunity for this much-needed

:42:53.:42:56.

referendum and the reality of reform, and we cannot at this and

:42:57.:43:03.

examine what it is us. Would the Prime Minister agree, on all sides,

:43:04.:43:08.

and open argument on this, rather than open warfare is what voters

:43:09.:43:12.

will all want? People want open argument and they want unbiased

:43:13.:43:18.

statistics and clear independent advice as well. As well as there

:43:19.:43:23.

being an in campaign and an outer campaign, once the deal is agreed,

:43:24.:43:28.

several out campaigns, as you say... We need to make sure that

:43:29.:43:35.

independent organisations, businesses and NGOs and others, who

:43:36.:43:39.

think they would be affected, everybody should he encouraged to

:43:40.:43:44.

come forward and give their view. Mr Speaker, will the Prime Minister

:43:45.:43:52.

tell us in the spirit of subsidy and action, when he said strengthening

:43:53.:43:54.

all national parliaments, what does that mean for the Scottish

:43:55.:43:58.

Parliament? We are currently giving the Scottish Parliament the immense

:43:59.:44:05.

responsibility of being able to raise its own taxes. Which we are

:44:06.:44:09.

still negotiating. This is probably the biggest act in a British

:44:10.:44:14.

subsidiarity we have had in many years. I would urge the SNP to pick

:44:15.:44:20.

up the Batten and run with it. On the topic of in work benefits, the

:44:21.:44:26.

Prime Minister has already said the emergency brake is in the hands of

:44:27.:44:28.

the commission. Would the Prime Minister agree it would help the in

:44:29.:44:34.

case, if over the last few weeks he could get a stronger commitment to

:44:35.:44:38.

apply the handbrake for a period into the future, not just initially?

:44:39.:44:44.

And what would happen if we voted to stay in but the European Parliament

:44:45.:44:46.

subsequently didn't ratify these measures? On his latter point, I

:44:47.:44:54.

make a point the European Parliament are a party to these negotiations

:44:55.:44:57.

and I have had a number of meetings with them. If he looks at the draft

:44:58.:45:01.

declaration of the European Commission on the safeguard

:45:02.:45:07.

mechanism, it is very clear we are justified in triggering the

:45:08.:45:10.

mechanism straightaway. But his other point is absolutely right, we

:45:11.:45:14.

need to secure, in the negotiations, the best possible agreement about

:45:15.:45:18.

all the other aspects of this mechanism, how long it lasts for,

:45:19.:45:23.

how many times it can be renewed, and all the rest of it. There were

:45:24.:45:29.

500 days between the announcement and the date of the Scottish

:45:30.:45:31.

independent referendum which is roughly the same between now and the

:45:32.:45:39.

23rd of June. But the are thousands of European citizens living in

:45:40.:45:42.

Britain and claiming benefits so how will this draft package be legally

:45:43.:45:48.

binding and affect them? I can let the House into a secret, the reason

:45:49.:45:52.

there were 500 days between the announcement of the Scottish

:45:53.:45:57.

renderer and the Scottish referendum itself, I was determined there would

:45:58.:46:00.

be one question only that I granted the former First Minister the right

:46:01.:46:04.

to name the date. He wanted to make sure it was after as long as

:46:05.:46:09.

possible, after the anniversary of Alnwick Burn, everything you could

:46:10.:46:14.

throw in. The result was still, from my point of view, very, very clear.

:46:15.:46:24.

Benefits is pulling factor for migration and it may have been

:46:25.:46:28.

blunted under these proposals, but not eliminated. The biggest pull

:46:29.:46:33.

factor for migration is our successful economy and job creation

:46:34.:46:38.

in the UK. Can I ask the Prime Minister what the long-term view is

:46:39.:46:42.

in these draft proposals for the UK to be able to control immigration

:46:43.:46:46.

within the EU beyond the four years of the emergency brake? The

:46:47.:46:50.

long-term approach is, first of all we are dealing with the abuses of

:46:51.:46:55.

free movement in a more comprehensive package than before,

:46:56.:46:59.

fraudsters, criminal calls and sham marriages. We have this four-year

:47:00.:47:05.

break, which is significant. Frankly, I am sure the Eurozone

:47:06.:47:10.

economies over time will start to recover, because that has been one

:47:11.:47:14.

of the issues. In the long term we need to do better controlling of

:47:15.:47:17.

immigration from outside the EU, but we need a welfare policy and

:47:18.:47:21.

training policy inside our own country, which trains up the people

:47:22.:47:28.

in our own country to do the jobs is a strong economy is providing. One

:47:29.:47:33.

of the top five economies in the world, Britain has to have a

:47:34.:47:37.

worldview and we need friends and allies, not just in one continent,

:47:38.:47:41.

but in six. But I agree with the Prime Minister as to whether we can

:47:42.:47:46.

manage outside the European union, but where we are better off. What

:47:47.:47:50.

feedback has he had from his negotiations from our allies in the

:47:51.:47:54.

Commonwealth and Britain's wider networks around the world? The

:47:55.:47:58.

advice has been comprehensive from all of them. They valued the

:47:59.:48:02.

individual relationship with Britain, but they think we are

:48:03.:48:05.

better off inside a reform European Union. Whether it is the Prime

:48:06.:48:12.

ministers of New Zealand, Australia, Canada, the American president or

:48:13.:48:15.

others, they are clear about this, not simply because they think we are

:48:16.:48:20.

better off, but also the influence we bring to bear on the European

:48:21.:48:23.

Union is positive from the point of view. The SNP in rummaging for an

:48:24.:48:30.

argument referred to in 1953, the case of McCormick and comments, side

:48:31.:48:37.

passing comments. Can I remind the Prime Minister that he, among EU

:48:38.:48:41.

leaders, has unique, up-to-date experience of tough negotiations,

:48:42.:48:48.

which led to a referendum agreement, which led to 55% of the Scottish

:48:49.:48:52.

electorate voting to keep the sovereign united Kingdom together.

:48:53.:48:57.

Can I say to the Prime Minister, he should take comfort in his success,

:48:58.:49:02.

because those 55% will be voting just like the English, the Welsh and

:49:03.:49:06.

Northern Irish, to listen to the British premiere on what is in

:49:07.:49:12.

Britain's best interests. I am grateful to my honourable friend.

:49:13.:49:17.

What these two referenda have in common, as a country we should be

:49:18.:49:20.

confronting and dealing with these big issues. The Scotland want to

:49:21.:49:25.

stay in the United Kingdom and does the United Kingdom want to stay

:49:26.:49:30.

within a reformed Europe? Just as important are the result, is the

:49:31.:49:34.

legitimacy of the result and a high turnout will be essential. What will

:49:35.:49:39.

the Prime Minister do to engage with trade, industry and businesses to

:49:40.:49:43.

discuss with their employees the implications for which ever way this

:49:44.:49:48.

debate goes? I will do everything I can in the results of a successful

:49:49.:49:52.

negotiation to encourage engagement at all levels. I would encourage

:49:53.:49:57.

businesses and charities and other organisations, to make sure they

:49:58.:50:01.

feel they can come forward. Some in the business community feel there

:50:02.:50:04.

are corporate governance concerns they have to go through. I would

:50:05.:50:09.

advise them to get on with that process, so if they think they have

:50:10.:50:13.

important arguments to put forward to the workforce, customers and

:50:14.:50:17.

shareholders, they should do so. The key question is whether the UK can,

:50:18.:50:22.

when we need to, say no to European migrants. This draft agreement says

:50:23.:50:28.

we can on the grounds of public policy, public health or public

:50:29.:50:34.

security. Which means reducing unemployment and marriages of

:50:35.:50:42.

convenience. Is this a step forward for our own immigration and security

:50:43.:50:45.

interests? I think my honourable friend makes an important point. If

:50:46.:50:54.

you read section D of the main document, it is refreshing on how

:50:55.:51:00.

many instances it is possible for the control of migration and for the

:51:01.:51:05.

limitation of free movement. It bears for careful reading. Can I

:51:06.:51:13.

welcome the Prime Minister's statement so far and in particular

:51:14.:51:18.

the fact, for the first time in my lifetime Prime Minister is doing a

:51:19.:51:21.

deal in Europe and coming back to this country to give the British

:51:22.:51:25.

people a say on it and not just parliament. Would he reassure me,

:51:26.:51:30.

even if we do about to remain on the European Union on the basis of this

:51:31.:51:34.

deal, we will still have a vision Europe should be doing less and

:51:35.:51:37.

doing it better? I absolutely agree with that. The idea of Europe when

:51:38.:51:46.

necessary. There will be people who will say, maybe these issues, we

:51:47.:51:53.

have addressed issues of concern to the British people, but there is

:51:54.:51:56.

more to be done. It is a perfectly acceptable view. The more to be done

:51:57.:52:02.

should be done inside the EU, rather than as slamming the door and trying

:52:03.:52:06.

to do it from outside. It is now clear from the renegotiation that

:52:07.:52:11.

Britain can its position within Europe by continuing to benefit from

:52:12.:52:15.

influence over and market of 500 million people, while maintaining

:52:16.:52:18.

our borders and preventing abuse of free movement. May I ask the Prime

:52:19.:52:24.

Minister if he is as encouraged as I am by the positive support that has

:52:25.:52:25.

come from business across the piece? Is important that business raises

:52:26.:52:34.

its voice, especially regarding jobs and investment. We need to

:52:35.:52:41.

demonstrate that this negotiation and its outcome, can actually lead

:52:42.:52:44.

to a strong and more secure economy, not just for the sake of business,

:52:45.:52:48.

but the sake of people that want security. I congratulate my right

:52:49.:52:54.

honourable friend on his statement. Is he aware that 90% of FTSE 100

:52:55.:52:59.

chairman would vote to remain in the European Union? Does he think this

:53:00.:53:04.

is because they are part of project fear or is it because they run our

:53:05.:53:08.

very largest companies in the real world and they know a vote to leave

:53:09.:53:12.

is a vote for economic uncertainty and a vote to remain with the

:53:13.:53:16.

protections we will have in terms of the single market and our currency

:53:17.:53:19.

is a vote for our economy and to go from strength to strength? It is

:53:20.:53:24.

important that we hear the voice of business large and small and I

:53:25.:53:28.

encourage them to speak out. They have an important contribution to

:53:29.:53:32.

make to the debate and the more people that can give concrete

:53:33.:53:35.

examples of how access to this market matters and how access to the

:53:36.:53:39.

rules of this market matters, that is the best thing. I've thanked the

:53:40.:53:45.

Prime Minister for his efforts to secure the best deal available. -- I

:53:46.:53:51.

thank. The newspaper reports suggest that the changes needed to introduce

:53:52.:53:54.

the emergency brake would require approval from the European

:53:55.:53:59.

Parliament. Has he had an opportunity to assess the levels of

:54:00.:54:03.

support from MEPs for these changes? You are right. It is a great advance

:54:04.:54:09.

that the European Commission has said Britain qualifies for this M

:54:10.:54:13.

break, if it existing now, it would be brought in straightaway --

:54:14.:54:18.

qualifies for this emergency brake. I think the head of the largest

:54:19.:54:22.

group at the European Parliament thinks this could be sorted out in a

:54:23.:54:31.

matter of months. The German captain of the ship which is the European

:54:32.:54:33.

Union has deliberately steered it into a migration iceberg, with all

:54:34.:54:38.

the watertight doors open. Rather than rearranging the deck chairs,

:54:39.:54:42.

would it not be better to direct the British people to the available

:54:43.:54:46.

lifeboat while the band is still playing before the inevitable

:54:47.:54:51.

happens? The analogy was getting quite complex, but I don't agree

:54:52.:54:59.

with that. If we were not outside Schengen our friend would have a

:55:00.:55:04.

very fair point, but we are in this situation of being able to have the

:55:05.:55:07.

best of both worlds, we will keep our borders and not let in foreign

:55:08.:55:12.

nationals that don't have a right to be here, something which is

:55:13.:55:16.

strengthened by this agreement, but let's keep the free movement so

:55:17.:55:19.

British people can live and work in other European countries. I think

:55:20.:55:25.

that is the best of both worlds. If I can press the Prime Minister

:55:26.:55:30.

further about the emergency brake, it sounded so hopeful a few weeks

:55:31.:55:35.

ago, and the Honourable friend from Gainsborough disk drive backstreet

:55:36.:55:42.

drivers. -- Gainsborough described. But it seems to mean that when I

:55:43.:55:48.

hazard is saying, an accident will surely happen, would my friend agree

:55:49.:55:51.

that it is far better to have independent control of the emergency

:55:52.:55:56.

brake, the clutch, the Excel rate and indeed the steering wheel? --

:55:57.:56:04.

when a hazard is seen. The European Commission statement is very clear,

:56:05.:56:08.

it considers the information provided to it by the United

:56:09.:56:11.

Kingdom, and that shows the exceptional situation exists in the

:56:12.:56:14.

United Kingdom today, so that would enable us to pull the emergency

:56:15.:56:22.

brake, but there is another consideration, those thinking that

:56:23.:56:25.

we would be better off outside the European Union have to think about.

:56:26.:56:29.

Most of those countries outside the EU that want a close leisure ship

:56:30.:56:33.

with it, when they ask for free access to the single market, the

:56:34.:56:37.

first and is that they should also be the free movement of people, that

:56:38.:56:44.

is the case with Norway, for instance -- they want a close

:56:45.:56:48.

relationship. This is a deal from within, and even on this issue I

:56:49.:56:51.

think this would be better than a deal from without. In his statement

:56:52.:56:57.

the Prime Minister outlines the work we've done to tackle migration from

:56:58.:57:01.

outside the EU, but what conversation as he had with other

:57:02.:57:06.

leaders about what they need to do to tackle the EU

:57:07.:57:09.

migration crisis question not many of my constituents are very

:57:10.:57:16.

concerned about this -- migration crisis? This is a crucial question

:57:17.:57:21.

which needs a proper answer, because the arrival of these people into

:57:22.:57:27.

Europe does concern people, and first we don't had to allow into our

:57:28.:57:32.

country foreign nationals, resident in other states, that is why we keep

:57:33.:57:37.

our border controls. If we take the situation in Germany, in order to

:57:38.:57:41.

get German citizenship, that can take as much as ten yes. That is the

:57:42.:57:45.

product of a lot of work and tests and everything else -- ten years. We

:57:46.:57:52.

have got to keep our Schengen no borders agreement and we should also

:57:53.:57:56.

continue to exclude people if they are not European Union citizens and

:57:57.:58:00.

they don't have a Visa, and the changes here that mean that we can

:58:01.:58:03.

crack down on the forces and the criminals and the sham marriages,

:58:04.:58:07.

and those who are trying to get round our immigration controls puts

:58:08.:58:10.

us in a better place to deal with the pressures of the future. It has

:58:11.:58:20.

been a long wait, but the voice of the Humber will not be silenced. As

:58:21.:58:24.

the Prime Minister said last week -- humbled. The Prime Minister said

:58:25.:58:31.

that the British people are proud of their democratic institutions, but

:58:32.:58:33.

when they see British ministers having to go cap in hand to Brussels

:58:34.:58:37.

to determine who receives benefits and who is allowed into the country,

:58:38.:58:41.

that pride is somewhat diminished. Could I urge him in his final

:58:42.:58:47.

negotiations to remain robust and achieve even more and although I'm

:58:48.:58:52.

afraid Hewelt persuade me, you might persuade a few doubting people in

:58:53.:58:58.

Cleethorpes -- I'm afraid Hewelt persuade me. The voice of the humble

:58:59.:59:03.

could help me with that, if he wanted to. We are a member of a

:59:04.:59:08.

number of national organisations, some of which involve us having

:59:09.:59:12.

obligations towards them. We have exceeded some of our sovereignty to

:59:13.:59:17.

Nato, but we don't see that as a cap in hand issue. That is a cornerstone

:59:18.:59:23.

of our security. What I'm trying to secure with Europe is that we are in

:59:24.:59:26.

the things we want to be in and out of the things we don't want to be

:59:27.:59:36.

in, and if that is not -- if that is the case, we are able to get things

:59:37.:59:42.

done for the people who put us in. Always very keen to hear the

:59:43.:59:46.

Honourable member, but he only toppled into the chamber some way

:59:47.:59:55.

into the statement, as his grin suggests, and we will hear from him

:59:56.:59:58.

on a subsequent occasion. Can we thank the Prime Minister for his

:59:59.:00:04.

patience and his courtesy and I would like to thank all colleagues

:00:05.:00:09.

for taking part. There will be many opportunities to debate these

:00:10.:00:13.

important matters, but thanks where it is due. We have come to the ten

:00:14.:00:21.

minute rule motion, which you have been waiting for. As I'm sure all

:00:22.:00:30.

Honourable members will agree, it is our job in this house to make sure

:00:31.:00:36.

that the citizens we represent can truly exercise their democratic

:00:37.:00:40.

rights, but as we speak British citizens in this country are being

:00:41.:00:44.

marginalised and excluded from the democratic process and the problem

:00:45.:00:48.

is less getting people to sign up, and more about maintaining people's

:00:49.:00:55.

registration. The people who are being excluded from the process are

:00:56.:00:58.

exactly the people we need to be prioritising. According to recent

:00:59.:01:03.

trends, we are witnessing further marginalisation of already

:01:04.:01:06.

marginalised groups, including those from poorer backgrounds, those who

:01:07.:01:10.

are disabled and those from ethnic minorities. Research published

:01:11.:01:16.

yesterday shows that pensioners in the shires who own their own homes

:01:17.:01:20.

have a 90% chance of being on the electoral register, but at the same

:01:21.:01:26.

time a young man from an ethnic minority background in private

:01:27.:01:29.

rented accommodation in a city, has less than 10% chance of being

:01:30.:01:35.

registered. Meanwhile the Prime Minister has launched an important

:01:36.:01:42.

drive against" over, unconscious or institutional racial discrimination

:01:43.:01:46.

in university admissions, the justice system and the police", but

:01:47.:01:51.

the fact that people from ethnic minorities are far less likely to be

:01:52.:01:54.

registered, and to exercise their democratic rights undermines the

:01:55.:01:58.

government's commitment. When it comes to electoral registration the

:01:59.:02:05.

picture is bleak. I celebrate the work of my friend from Ashfield, for

:02:06.:02:08.

raising the issue of voters dropping off the register, since the

:02:09.:02:13.

introduction of individual registration. Since the introduction

:02:14.:02:19.

a staggering 800,000 people have dropped off the register, that is

:02:20.:02:24.

1.8% nationwide. To put these figures into context, Liverpool has

:02:25.:02:31.

seen a drop in is eligible register of 14,000, Birmingham, 17,000,

:02:32.:02:39.

Lewisham, 6000. These are all areas which have seen an increase in

:02:40.:02:43.

population. The situation is even worse in areas where the population

:02:44.:02:46.

is transient, such as university towns. Canterbury has seen a 13%

:02:47.:02:52.

drop in those registered to vote, Cambridge has dropped by 11%,

:02:53.:02:57.

meaning the electorate is now smaller than it was in 2011. These

:02:58.:03:02.

jobs are the result of the absurdities of the current system.

:03:03.:03:07.

-- drops. Imagine if every time you started a new job you needed to

:03:08.:03:11.

apply for a new national insurance number and needed to prove to the

:03:12.:03:16.

HMRC again and again that you were eligible to pay tax and national

:03:17.:03:20.

insurance. The process would be cumbersome and costly and

:03:21.:03:23.

repetitive, just as the process of this is. In sum, these developers

:03:24.:03:29.

mean that British citizens, especially those who are on the

:03:30.:03:33.

sidelines, are being disenfranchised -- these developments. This also

:03:34.:03:39.

means that as the pool of potential voters decreases, our political

:03:40.:03:44.

status quo becomes more limited. If the government is serious about

:03:45.:03:48.

combating social exclusion, it urgently needs to review the dire

:03:49.:03:59.

situation. Disenfranchisement is marginalising the already

:04:00.:04:02.

marginalised. If you are not on the register, you won't have access to

:04:03.:04:06.

mainstream loans and you might not be able to get a mortgage. You also

:04:07.:04:10.

can't serve on a jury and be part of our justice process. More

:04:11.:04:16.

fundamentally of all, if you are not on the electoral register, you can't

:04:17.:04:18.

participate in the democratic process. Our present a lecture at

:04:19.:04:23.

system of electoral registration is fundamentally flawed, and it is not

:04:24.:04:27.

cheap -- our present electoral system. But it does not have to be

:04:28.:04:36.

this way. Automatic registration provides the opportunity to reduce

:04:37.:04:41.

costs and improve Administration and cut down on the Roxy and enable

:04:42.:04:47.

everyone to access their right to in franchise -- cut down on

:04:48.:04:53.

bureaucracy. This places the responsibility on the state to do

:04:54.:04:57.

everything in its power to make sure that the electoral database is full

:04:58.:05:01.

and complete. It imposes a duty on the government and public bodies to

:05:02.:05:05.

work better together, and it proposes to make the system truly

:05:06.:05:09.

convenient for the citizens by integrating national and local

:05:10.:05:12.

datasets and this will mean that when individuals address details

:05:13.:05:18.

will be automatically updated according to trusted datasets. The

:05:19.:05:22.

datasets will collate information at each point a citizen interacts with

:05:23.:05:29.

the state, whether when they pay tax or receive benefits, use the NHS or

:05:30.:05:33.

claim a pension. The walls used to be sacrosanct between these

:05:34.:05:38.

datasets, but they are falling away as the government prioritises

:05:39.:05:43.

security. Housing benefit departments already use the

:05:44.:05:46.

electoral register to find households claiming the 25% single

:05:47.:05:51.

person council tax discount. But have more than one voter registered.

:05:52.:05:56.

This demonstrates the huge potential wing government departments and

:05:57.:05:58.

public bodies communicate with each other. -- when. This would improve

:05:59.:06:08.

registration, these reforms, and are very similar model operates in

:06:09.:06:12.

Australia with huge success. The state of Victoria has a population

:06:13.:06:18.

of 3.5 million people and has a 95% accuracy in its registration

:06:19.:06:22.

process. It does this at extremely low cost, employing just five

:06:23.:06:25.

members of staff who maintain the rolling register. Rolling out this

:06:26.:06:30.

reform in the UK is timely for so many reasons. Greater Manchester

:06:31.:06:35.

will submit to the Cabinet Office next week, its plans to pioneer the

:06:36.:06:38.

system of automatic electoral registration. Its proposals for a

:06:39.:06:44.

pilot scheme, and I sincerely hope that the government will support

:06:45.:06:47.

these plans, and I will introduce the primary legislation which is

:06:48.:06:53.

needed to make sure the pilot can go ahead -- and they will. I'm sure

:06:54.:06:58.

members will be aware that this week is National voter registration

:06:59.:07:02.

drive, and last year 's drives almost half a million people

:07:03.:07:05.

registered to vote, making it the most accessible voter registration

:07:06.:07:10.

campaign ever. I hope the results this week will match that

:07:11.:07:15.

achievement. But in the longer run, voter registration should not be the

:07:16.:07:20.

responsibility of charities and NGOs, it should be down to the state

:07:21.:07:24.

to do all it can to make sure that everyone, especially those who are

:07:25.:07:27.

most marginalised, can access their democratic rights. I hope honourable

:07:28.:07:31.

members will consider this a nonpartisan issue, and will agree

:07:32.:07:36.

that it is in all our interests to get more people signed up. -- all

:07:37.:07:43.

agree. Then we can get on with our job to try and persuade and enthuse

:07:44.:07:46.

voters that we are worthy of their votes. At a time when social

:07:47.:07:50.

exclusion is getting worse, voter turnout is declining, and this has

:07:51.:07:57.

caused registration to do play, automatic voter registration has

:07:58.:08:00.

never been more important, voting is the backbone of this house and is

:08:01.:08:03.

one of the most important interactions between the citizen and

:08:04.:08:08.

the democratic state, it is a fundamental symbol of engagement,

:08:09.:08:11.

signifies that you are not on the margins of society, but part of the

:08:12.:08:16.

majority. We can no longer accept a system that excludes and

:08:17.:08:20.

marginalises potential voters, not least because they are exactly the

:08:21.:08:24.

groups that we need to engage with two and social exclusion. I don't

:08:25.:08:29.

think it is a controversial thing to argue that voting is not just for

:08:30.:08:32.

the elite, it is something we should all be able to access. That is why,

:08:33.:08:37.

for the sake of our democracy, and of social cohesion, I hope the

:08:38.:08:40.

government will be supporting my suggestions and will make

:08:41.:08:44.

registering to vote more, not less, way of life.

:08:45.:08:52.

The question is the honourable member have leave to bring in the

:08:53.:08:59.

Bill. As many as are of the opinion say "aye". To the contrary, "no".

:09:00.:09:07.

The eyes to the right,. He will bring in the Bill?

:09:08.:10:12.

Automatic electoral reading Bill. What day. Friday the 5th of

:10:13.:10:22.

February. We now come to the motion from the Leader of the Opposition on

:10:23.:10:26.

tax avoidance and multinational companies. Mr John McDonnell. I wish

:10:27.:10:34.

to move the motion set out on the order paper in my name and that of

:10:35.:10:40.

several other friends. Can I welcome the minister responding, totally

:10:41.:10:45.

sympathise with his position having been put in this position by the

:10:46.:10:52.

Shadow Chancellor. I understand the Chancellor is in Rome today, can I

:10:53.:10:56.

say at this stage it is unfortunate to say the least that securing a

:10:57.:11:06.

firm a agreement on tax avoidance could be a missed opportunity but

:11:07.:11:11.

this government. We have called this debate because of the last 12 days,

:11:12.:11:16.

we have witnessed the most supine capitulation to corporate interests

:11:17.:11:21.

write any British government in the recent history of this country. It

:11:22.:11:27.

has caused immense anger within our community, from individual

:11:28.:11:32.

taxpayers, from businesses small and large, from Independent commentators

:11:33.:11:34.

and from across the political spectrum. Just at the time when many

:11:35.:11:41.

of our constituents were filling in their tax returns and paying their

:11:42.:11:44.

taxes, they see what the government was allowing Google to get away

:11:45.:11:52.

with. This is a time-limited debate and I will try and press on as quick

:11:53.:11:58.

as I can. Members will have the opportunity to engage. On the Friday

:11:59.:12:01.

before last, Google announced late in the day by press release, the

:12:02.:12:07.

company's tax deal with HMRC. It celebrated a deal comprising of

:12:08.:12:14.

payments of ?130 million in respect of taxes from 2005 up to 2015. In

:12:15.:12:22.

the early hours of the morning, the Chancellor was in an equally

:12:23.:12:24.

celebratory mood and tweeted this was a victory, a major success. The

:12:25.:12:34.

Google deal and that... I will in due course. The Chancellor's

:12:35.:12:39.

exaltation of the deal were received with incredulity of independent tax

:12:40.:12:46.

analysts. The Chancellor and HMRC were keen to publicly parade the

:12:47.:12:51.

deal, but when challenged to release the detail, they hid behind

:12:52.:12:57.

confidential conditions. What assessment does the Shadow

:12:58.:13:00.

Chancellor make of the Labour government, who were in charge of

:13:01.:13:05.

taxation during part of that period? I am grateful for the intervention,

:13:06.:13:08.

the honourable member knows I was not the most enamoured of the Labour

:13:09.:13:13.

government's track record during that period. It was a Labour

:13:14.:13:16.

government that started this enquiry. His government took six

:13:17.:13:21.

years to complete it. If you look at the recent estimate why the

:13:22.:13:25.

Financial Times, the measures that were introduced by the Labour

:13:26.:13:29.

government, the Labour government, will reap in ten times the amount of

:13:30.:13:37.

tax this government has introduced. I am grateful to my right honourable

:13:38.:13:42.

friend, but won't many of our constituents find it difficult to

:13:43.:13:46.

understand the fact this information is largely in the public domain? We

:13:47.:13:52.

know the profits and the assets and the liabilities of Google in the

:13:53.:13:56.

United Kingdom, because those finances are public. We also know

:13:57.:14:00.

how much tax is being paid. Does that lead us to the conclusion the

:14:01.:14:09.

tax rate is 2.77% and not 20%? Let me come on to that point. I didn't

:14:10.:14:16.

take long for independent analysis to show what a derisory sum the

:14:17.:14:22.

Google tax payment was. I said derisory, not just my description

:14:23.:14:28.

but used by many others. Google had a UK turnover of up approximately

:14:29.:14:35.

four Oleon in 2014, 20 15. If profits are similar across the whole

:14:36.:14:41.

group, 25% return, it implies one alien pounds worth of profits. If

:14:42.:14:50.

the standard 20% corporation tax was levied, not the 200 in due course,

:14:51.:14:53.

not the 200 million paid by Google for the decade. Independent

:14:54.:15:00.

assessors estimated the Google tax rate for the last decade of 3%. I

:15:01.:15:08.

thank him for giving way. Companies in my constituency are extremely

:15:09.:15:11.

successful at selling products around the world and based on the

:15:12.:15:14.

intellectual rapidly developed in the UK. Does the Shadow Chancellor

:15:15.:15:18.

think the profits from that intellectual rapidly should be taxed

:15:19.:15:23.

in the company where those products are sold, or here in Britain? The

:15:24.:15:29.

economic activity definition has to be examined when rockets are

:15:30.:15:33.

assessed. It is a valid and reasonable point. Let me press on.

:15:34.:15:41.

It is no wonder local, small businesses and taxpayers feel so

:15:42.:15:46.

strongly that this is grotesquely unfair. They have not been allowed

:15:47.:15:52.

to ignore the tax demands for a decade then negotiate a sweetheart

:15:53.:15:59.

deal at mater's rates. It also shows who counts with this government,

:16:00.:16:03.

that in the month they let Google Paea poultry sum in back tax, they

:16:04.:16:14.

lose in court over the bedroom tax and then they appeal the decision so

:16:15.:16:18.

they can persecute some of the most vulnerable and poorest people in the

:16:19.:16:23.

land over a relatively insignificant sum. It demonstrates to us at the

:16:24.:16:28.

start up site down and callous sense of justice and fairness. I thank him

:16:29.:16:35.

for giving way. Does he agree with me what compounds that sense of

:16:36.:16:41.

unfairness constituents will feel, the tax gap has been estimated by

:16:42.:16:46.

many to be over 100 billion pounds and this government is cutting HMRC

:16:47.:16:52.

offices and at the weekend announced compulsory redundancy for tax

:16:53.:16:55.

collectors. How can we narrowed the tax gap when that is happening?

:16:56.:17:03.

Under Labour, hedge fund managers were paying routinely rate of tax

:17:04.:17:09.

band the cleaners because Labour were a soft touch on tax. Isn't this

:17:10.:17:16.

political opportunism on stilts? Can I say, I am not sure if the

:17:17.:17:20.

honourable gentleman is listening, but my critique of the last Labour

:17:21.:17:26.

government, having convened the tax Justice network in this building,

:17:27.:17:30.

campaigned for 18 years. I have to say over the last government, the

:17:31.:17:35.

Financial Times assessment is the measures introduced by the Labour

:17:36.:17:39.

government will reap in ten times as much as anything introduced by this

:17:40.:17:44.

government. Let me press on. Last Monday, just to get some answers by

:17:45.:17:48.

the Google deal I tabled an urgent question to the Chancellor and I'm

:17:49.:17:53.

grateful Mr Speaker granted the question. Typically the Chancellor

:17:54.:18:00.

failed to turn up. By that time Number Ten was distancing itself

:18:01.:18:05.

from the Chancellor. Google deal had gone, within 72 hours, from a major

:18:06.:18:09.

success to merely a step forward, to Number Ten. I see this weekend, the

:18:10.:18:14.

Business Secretary was describing the deal with masterly

:18:15.:18:18.

understatement as not a glorious moment. Yesterday, Ruth Davidson,

:18:19.:18:24.

the leader of the Scottish Conservatives said, it doesn't feel

:18:25.:18:29.

fair that in our hearts I feel we all know it isn't fair. I agree,

:18:30.:18:36.

wholeheartedly. During the urgent discussion last Monday, the Minister

:18:37.:18:42.

was asked by the member for Kingston upon Hull North, whether he knew

:18:43.:18:45.

what the rate of tax was Google was paying. He said bluntly, no. We had

:18:46.:18:52.

the assertion that the HMRC calculation of back tasks set on

:18:53.:19:00.

levied on an assessment of economic activity. This implies there must be

:19:01.:19:04.

very little economic activity happening in Google UK. This

:19:05.:19:09.

argument will a bit thin... I will in due course, but it was pointed

:19:10.:19:16.

out by Google employs 2300 staff in the UK with average earnings of

:19:17.:19:21.

?160,000, is building a new headquarters on top of the two it

:19:22.:19:26.

already has. Can I join with the Shadow Chancellor in demanding more

:19:27.:19:30.

transparency question I have had contact from my constituents who are

:19:31.:19:34.

concerned what is happening is the government are creating a loophole,

:19:35.:19:38.

especially for Google and nobody else. I think we deserve, in this

:19:39.:19:43.

House, and in this country, full transparency on this deal. I will

:19:44.:19:48.

come onto the recommendations for future action, which covers that

:19:49.:19:54.

point. Let me press on a little bit further. As last week wore on, there

:19:55.:20:00.

was a growing sense of outrage at the Google sweetheart deal and many

:20:01.:20:04.

felt betrayed by the Chancellor. We supported the Chancellor with the

:20:05.:20:10.

introduction of the diverted profit tax legislation, to tackle firms

:20:11.:20:13.

using complex profit shifting schemes to avoid tax. We supported

:20:14.:20:18.

him. He was referred to as the Google tax. We learned last week

:20:19.:20:23.

that Google will not be paying a penny under this legislation. We

:20:24.:20:29.

also supported the Chancellor in seeking international agreements on

:20:30.:20:31.

tax avoidance. But we discovered at the weekend that Conservative MEPs

:20:32.:20:38.

had been directed by the Chancellor on six occasions at least, to vote

:20:39.:20:41.

against the very tax avoidance measures being introduced by the EU,

:20:42.:20:46.

that the Chancellor told us he was supposedly promoting. I know the

:20:47.:20:53.

Shadow Chancellor likes to seek consensus where he can and I am

:20:54.:20:56.

listening to what he says. I have aimed doing some totting up and

:20:57.:21:00.

there are about 40 changes to tax laws since this government has been

:21:01.:21:05.

in office, which has raised 12 billion pounds since 2010. For the

:21:06.:21:10.

record, would he welcomed that? Of course, I have supported the

:21:11.:21:14.

Chancellor on each piece of legislation he has brought forward

:21:15.:21:19.

to tackle avoidance and tax evasion. This deal flies in the face the

:21:20.:21:23.

honourable gentleman and I have been supporting in this chamber, it flies

:21:24.:21:28.

in the face of it. I thank him for giving way. Last year, Google 408

:21:29.:21:37.

billion pounds of payments to Bermuda. Does he believe the British

:21:38.:21:40.

government should be doing more to crack down on tax havens,

:21:41.:21:44.

particularly those that are British Overseas Territories? If my

:21:45.:21:49.

honourable friend will wait a few minutes, I will address the Bermuda

:21:50.:21:52.

question and she will see how shocking it actually is. It now

:21:53.:21:59.

appears the Chancellor actually, I believe, is missing an opportunity

:22:00.:22:02.

in the recent EU negotiations to secure a robust international

:22:03.:22:05.

agreements to tackle tax avoidance and tax evasion... If I could just

:22:06.:22:16.

press on. That across the House, we have been calling for. Can I say

:22:17.:22:21.

also, I supported and we all supported the changes to public

:22:22.:22:24.

procurement rules that enabled the government to prevent public

:22:25.:22:29.

contracts being awarded to companies, found to be engaged in

:22:30.:22:32.

tax avoidance schemes. Let me finish this point...

:22:33.:22:40.

Staggeringly, it is understood that no company has been denied a

:22:41.:22:45.

contract on these grounds and even though the Google tax affairs were

:22:46.:22:50.

under lengthy investigation by MH RC, Dutch by HMRC, they were awarded

:22:51.:22:58.

a contract to supply services to HMRC! The UK has been at the

:22:59.:23:04.

forefront of the profit shifting initiative and Richard Murphy, who

:23:05.:23:12.

describes themselves as the author of Corbynomics, says that he was

:23:13.:23:17.

pleased and surprised by progress made by the government since 2010.

:23:18.:23:22.

As a porter the government in this action, this flies in the face of

:23:23.:23:25.

that action and undermines the agreements we are trying to make --

:23:26.:23:29.

I support the government in this action. We also heard from Mr Jones,

:23:30.:23:39.

the Google whistle-blower. In his opinion, HMRC had ignored Google's

:23:40.:23:47.

attempts to avoid paying tax. We all accept that the existence of tax

:23:48.:23:50.

savings present an ongoing challenge to national governments. So we have

:23:51.:23:54.

all supported international agreements on tax collection. The UK

:23:55.:23:58.

is a signatory to some of these. It has agreed in successive steps to

:23:59.:24:04.

abide by the erosion of the profit shifting programme under the

:24:05.:24:08.

auspices of HMRC. We'll support that. Let me press on, time is

:24:09.:24:15.

short. 30 OECD partnered countries, in signing up to the agreement, we

:24:16.:24:21.

support that. This is the kind of international co-operation, albeit

:24:22.:24:25.

limited that will help close loopholes and ultimately close tax

:24:26.:24:27.

havens. The kind of agreement we have back to yours, which was aboard

:24:28.:24:34.

the Chancellor in undertaking. However last week by allowing

:24:35.:24:37.

special treatment of one company, the government was driving a coach

:24:38.:24:42.

and horses through this entire international approach. As the EU's

:24:43.:24:46.

accommodation commissioner suggested, this could amount to an

:24:47.:24:51.

unlawful state aid. The UK is becoming debated across Europe as a

:24:52.:24:56.

tax haven. It risks establishing a race to the bottom in which every

:24:57.:25:00.

country out bids each other to offer the lowest possible taxation. We

:25:01.:25:05.

have written to the competition commissioner to request a formal

:25:06.:25:08.

investigation of the deal. Bonrepaux lady? Does the honourable gentleman

:25:09.:25:19.

accept that more has been done by this government than the previous

:25:20.:25:21.

one to close loopholes and if he says he did not agree with the last

:25:22.:25:25.

Labour government will he say what he did to oppose those measures and

:25:26.:25:30.

to raise these points when he was in Parliament? I know the honourable

:25:31.:25:37.

lady was not here, she should check my voting record through the 18

:25:38.:25:41.

years I've been in this House. I don't want to keep repeating this.

:25:42.:25:45.

Jon Hamm wanted both governments to go further. On an independent

:25:46.:25:52.

assessment -- but I wanted both governments to go further. Even then

:25:53.:26:02.

I wanted to go further but at least I accept the independent assessment

:26:03.:26:06.

made. Now can I buy Sun because time is getting on. I have written to the

:26:07.:26:11.

competition Commissioner because I want to request a formal

:26:12.:26:15.

investigation of this deal. There was a flicker of life in the

:26:16.:26:18.

Chancellor a few days ago and in the Financial Times on Monday he let it

:26:19.:26:22.

be known that he might favour country by country brought in for

:26:23.:26:26.

multinational corporations. Tax experts and I have long argued that

:26:27.:26:31.

this is a vital step towards transparency and therefore towards

:26:32.:26:34.

their collection. By revealing in its accounts in which tax

:26:35.:26:39.

jurisdiction revenues were being burned a proper rate of tax can be

:26:40.:26:43.

applied to multinationals. If the Chancellor now supports country by

:26:44.:26:50.

country reporting, I welcome it. The impression, though, was given that

:26:51.:26:53.

even with that international agreement, the government would act.

:26:54.:26:58.

Is this the case was this just a publicity stunt that has now been

:26:59.:27:04.

dropped? And the Andrew Marr show on Sunday my referred to Bermuda, and

:27:05.:27:09.

the Andrew Marr show on Sunday is senior Google representative

:27:10.:27:12.

revealed the company has ?30 billion worth of of profits resting in the

:27:13.:27:17.

mood, a British Overseas Territory. This is to avoid US tax rates. We

:27:18.:27:22.

now know that the Chancellor has been lobbying the EU and instructing

:27:23.:27:28.

his MPs to vote against anti-avoidance measures against

:27:29.:27:34.

Bermuda. A disgrace. It was also revealed last week the fact that

:27:35.:27:38.

government ministers met with Google 25 times over the last 18 months. I

:27:39.:27:44.

see that the Prime Minister himself has spoken not once but twice at the

:27:45.:27:51.

Google conference. If ministers are to meet anyone at my advice is that

:27:52.:27:55.

they should meet with the trade union representatives of HMRC staff.

:27:56.:27:59.

After almost half the workforce laid off and offices closed around the

:28:00.:28:04.

country it is known that morale is at rock bottom, especially with the

:28:05.:28:09.

loss of experienced expert staff. There has been a reference, Madam

:28:10.:28:13.

Deputy Speaker, to declaring an interest. I have no interest. I

:28:14.:28:18.

think it's a reference to a trade union group, they do not fund the

:28:19.:28:23.

Labour Party and they do not fund my constituency, there is no interest

:28:24.:28:26.

to be declared. We cannot allow the government to go on like this. Trust

:28:27.:28:32.

and confidence in our tax system is being undermined. Every pound in tax

:28:33.:28:38.

avoided by these large corporations is also a pound taken from the

:28:39.:28:44.

pockets of honest taxpayers. Also a pound not spent on our schools, our

:28:45.:28:49.

energise, and our police. We need a real tax reform agenda based upon

:28:50.:28:54.

the complete openness and transparency. First, that means, as

:28:55.:29:01.

a start, the publication of the details of this deal in full. So we

:29:02.:29:07.

can judge whether it is fair enough and our constituents can judge

:29:08.:29:11.

whether it is fair enough. Second we need real country by country

:29:12.:29:16.

reporting of a country's activities -- a company's activities. Not just

:29:17.:29:21.

as it would exchange of information between tax authorities but full

:29:22.:29:29.

information. I give way. I am grateful to the honourable gentleman

:29:30.:29:33.

forgiving way, I hope he might talk about a revolutionary change because

:29:34.:29:37.

the ranks of corporate lawyers put up against tax jurisdictions is an

:29:38.:29:41.

any from battle, perhaps we need radical thinking. The honourable

:29:42.:29:46.

gentleman has taken an interest in this for years and been in debates

:29:47.:29:50.

of me and I do agree that we need a more radical approach. I think this

:29:51.:29:55.

opens up a wider debate. We need real country by country reporting of

:29:56.:29:59.

a company's activities, not simply a secret exchange of information

:30:00.:30:03.

between tax authorities but full publications we can judge. Then an

:30:04.:30:08.

end to mates rates, sweetheart deals with major corporations. Tax rates

:30:09.:30:13.

should be applied fairly whatever the size of the company. We need

:30:14.:30:18.

full transparency in the relationship between ministers and

:30:19.:30:23.

companies. So I wanted the publication of oral ministerial

:30:24.:30:26.

company meetings. Fifth, we need more action to curb the tax

:30:27.:30:31.

avoidance industry. Action should be taken against advisers when the tax

:30:32.:30:35.

avoidance schemes that they designed are found unlawful by tax tribunal

:30:36.:30:41.

's and courts. The same advisers advise Her Majesty's Treasury and

:30:42.:30:45.

helped write this country's tax laws. This is not healthy and it is

:30:46.:30:51.

not acceptable. We clearly need independent scrutiny of HMRC. And

:30:52.:30:55.

the implementation of taxation policy overall. Let us on a

:30:56.:31:01.

cross-party basis now explore the establishment of a cross-party

:31:02.:31:04.

committee on the lines of our security and intelligence committee

:31:05.:31:08.

to perform this role. Finally we need an end to the

:31:09.:31:11.

counter-productive stuffing cuts and office closures at HMRC. Madam

:31:12.:31:17.

Deputy Speaker, for most of my time in Parliament I've campaigned for a

:31:18.:31:23.

fair tax system. Of course companies like Google make a significant

:31:24.:31:26.

contribution to research and development in the employment they

:31:27.:31:30.

provide and I welcome that but we expect all companies to play fair

:31:31.:31:34.

when it comes to tax responsibilities. I cannot accept

:31:35.:31:37.

the government 's amendment because it fails to support key demands for

:31:38.:31:42.

openness. It removes Labour's central demand for publication of

:31:43.:31:46.

the Google deal and the adoption of full public country by country

:31:47.:31:49.

boarding. If anything is good to come out of this sordid deal that

:31:50.:31:53.

the government cut with Google I urge members of this house to use

:31:54.:31:59.

this opportunity to secure a fair and open system of taxation for this

:32:00.:32:03.

country and stop this process by backing our motion today. The

:32:04.:32:12.

question is as on the order paper. I have to inform the House that Mr

:32:13.:32:16.

Speaker has selected the amendment in the name of the Prime Minister.

:32:17.:32:22.

Just before I called the honourable gentleman to move the amendment, I

:32:23.:32:26.

should tell House that there are a great many people will have

:32:27.:32:30.

indicated that they wish to catch my eye this afternoon, more than 20

:32:31.:32:36.

honourable members wish to speak. This debate will last for

:32:37.:32:41.

considerably less than two hours. There will be a time limit of three

:32:42.:32:44.

minutes initially and backbench speeches. There is no point of

:32:45.:32:50.

people complaining, that is the amount of time there is. There will

:32:51.:32:55.

be three minutes and even then not everyone who wishes to be called to

:32:56.:33:01.

speak will be called to speak. And I say, very importantly to the House,

:33:02.:33:05.

that people who have intervened and taken part in the debate must remain

:33:06.:33:09.

in this chamber for the whole of the debate. The occasional five minutes

:33:10.:33:15.

is fine but they must effectively remain in the chamber for the whole

:33:16.:33:18.

of the debate as they are taking our time that other people will then not

:33:19.:33:22.

have or have sat through the whole debate. This has nothing to do with

:33:23.:33:27.

old-fashioned conventions, it is simple courtesy of one member of

:33:28.:33:35.

Parliament to another. I called to move the government amendment, Mr

:33:36.:33:36.

David Gauke. Thank you, Madam Deputy Speaker, it

:33:37.:33:46.

is a great pleasure to move the government's amendment. There is

:33:47.:33:49.

much we have heard from the party opposite to date on this subject

:33:50.:33:54.

that is wrong, confused, and to put it kindly, oblivious to the record

:33:55.:33:58.

of the last Labour government. Jon Hamm before addressing those points

:33:59.:34:04.

I hope to strike a note of consensus -- but before addressing those

:34:05.:34:07.

points. Both sides of this House believe that all companies should

:34:08.:34:12.

pay the taxes due under the law. They all believe that companies

:34:13.:34:19.

should refrain from contrived behaviour to reduce tax liabilities

:34:20.:34:23.

and all taxpayers should be treated impartially. This is why our record

:34:24.:34:28.

is one of taking domestic and international action to tackle tax

:34:29.:34:33.

avoidance. I will set out details of that action, Madam Debord is bigger

:34:34.:34:38.

but first I want to address another issue. The approach from the Shadow

:34:39.:34:42.

Chancellor, the party opposite, has generated more heat than light and

:34:43.:34:47.

often reveals a complete misunderstanding of how the

:34:48.:34:51.

corporation tax system works. Let me take this opportunity to explain to

:34:52.:34:58.

the House how it does work. The Independent Institute for Fiscal

:34:59.:35:01.

Studies in a paper they published last week puts it very well. I

:35:02.:35:06.

quote. The current tax rules are not designed to tax the profits from UK

:35:07.:35:12.

sales. There are certainly not designed to tax either revenue or

:35:13.:35:17.

sales generated in the UK. They are instead designed to tax that part of

:35:18.:35:21.

a firm's profit that arises from valley created in the UK. That's the

:35:22.:35:27.

principle underlying all corporate tax regimes across the OECD. I make

:35:28.:35:34.

that point because it is fundamental to understanding the tax we are

:35:35.:35:37.

entitled to receive from multinational companies, and it is

:35:38.:35:41.

not a point that the Shadow Chancellor appears to have grasped.

:35:42.:35:46.

Let me give an example of why this matters. It is similar to the point

:35:47.:35:49.

made by my honourable friend the Member for Dudley South. I will make

:35:50.:35:55.

this point and then certainly give way to the Shadow Chancellor. The UK

:35:56.:35:59.

is to one of the most successful video games sectors in the world.

:36:00.:36:03.

Would it be fair for a firm to design a game here, develop it here,

:36:04.:36:07.

take the risks here and then go on to sell and overseas and then have

:36:08.:36:12.

to pay corporation tax on all of that activity in the country in

:36:13.:36:16.

which they make the final sale, not in the UK? The current international

:36:17.:36:22.

tax arrangements are clear that these profits are taxed in the UK,

:36:23.:36:28.

place of economic activity, rather than in the place with a sales are

:36:29.:36:33.

made. That is the internationally agreed and applied concept of

:36:34.:36:37.

corporation tax. That is the law that HMRC applies. And quoting

:36:38.:36:44.

numbers to do with revenues, or profits from sales as opposed to

:36:45.:36:49.

activities, demonstrates a lack of understanding of how the tax system

:36:50.:36:54.

works, well, and this is worse, and understanding of the way that the

:36:55.:36:58.

tax system works Jon Hamm hope that those following the debates do not.

:36:59.:37:00.

I will give Is the minister saying Google

:37:01.:37:12.

employs 3200 staff in this country on an average salary of ?160,000 and

:37:13.:37:17.

they cannot be defined as economic activity or add any value, what are

:37:18.:37:21.

they doing? Playing cards all the time? Are they not a sizeable

:37:22.:37:27.

proportion of the Google workforce? The point I am making is the Shadow

:37:28.:37:32.

Chancellor goes around quoting numbers based on profits for sales,

:37:33.:37:36.

to be fair he went through the methodology carefully in the House

:37:37.:37:41.

today. But it is a methodology that appears to be based on a

:37:42.:37:44.

misunderstanding of how the tax system works. I will give way. I

:37:45.:37:55.

don't have a misunderstanding of how corporation tax is applied, but

:37:56.:37:59.

without the information from HMRC and publication of the deal, it is

:38:00.:38:03.

difficult to know exactly much tax they should be paying, which is why

:38:04.:38:08.

we are seeking answers. Also, with eight billion dollars of royalty

:38:09.:38:13.

payments to Bermuda, does the honourable gentleman really think

:38:14.:38:15.

that is where the economic activity and value is being added? I will

:38:16.:38:24.

come to the issue of transparency in a moment. I will deal with that

:38:25.:38:28.

directly. In terms of the issue of how our international tax system

:38:29.:38:33.

works, having explained it is based on economic activity, I would say it

:38:34.:38:37.

is an international tax system that needs to be brought into the modern

:38:38.:38:42.

world. That is the reason why the UK has led the way on the profit

:38:43.:38:49.

shifting process. We should be aware also there are particular issues

:38:50.:38:54.

with the US tax system that is failing to tax international

:38:55.:38:59.

property developed in the US in the way that it should do. I have given

:39:00.:39:05.

the example of video games companies. I recognise there are

:39:06.:39:09.

cases that are more complex, where it is not so easy to identify where

:39:10.:39:15.

the economic activity takes place. There is an issue about how

:39:16.:39:19.

multinational companies allocate their profits and where they

:39:20.:39:22.

identify the economic activity taking place. There is a need to

:39:23.:39:27.

address that point. And that is why we need to have tax rules that

:39:28.:39:34.

genuinely reflect where economic activity is taking place and ensure

:39:35.:39:38.

profits are aligned with that. It is a different matter from making the

:39:39.:39:46.

claims about profits from sales and then saying, well, those sales

:39:47.:39:49.

profits have to be where the sales take place. That is the

:39:50.:39:53.

misunderstanding I wish to address. Good evening he is right, sometimes

:39:54.:39:59.

these issues are complicated but there are loopholes that are

:40:00.:40:05.

complicated. Can he explain some of the loopholes opened by the previous

:40:06.:40:11.

Labour government? There is a whole host I could draw attention to. In

:40:12.:40:15.

the interest of time, I will not run through the lengthy list, it is here

:40:16.:40:27.

actually. There is quite a number of cases where 40 cases I can identify

:40:28.:40:33.

straightaway, where there where loopholes available and that is why

:40:34.:40:38.

we have tried to address it. But I would particularly make a point, and

:40:39.:40:43.

I will come back to this in detail in a moment, the diverted profits

:40:44.:40:47.

tax was brought in. I will deal with the details on that. It is designed

:40:48.:40:53.

to ensure that where companies divert their profits away from the

:40:54.:40:57.

UK, where the economic activity is happening in the UK, we get some of

:40:58.:41:04.

the tax yield. The difficulty with the economic activity test he talks

:41:05.:41:08.

about, is it is intrinsically judgmental. But gives us many of the

:41:09.:41:13.

issues we tried to grapple with. It came in in the 1920s, before the

:41:14.:41:20.

Internet. Might it not be a way forward we move more to taxing sales

:41:21.:41:25.

and if necessary, dividends and less on corporation tax which takes these

:41:26.:41:30.

judgments away? The first point to make is we have got a debate today

:41:31.:41:35.

on the operation of the tax law as it currently stands, not as some

:41:36.:41:40.

people might think it should be. To be fair to HMRC they can only

:41:41.:41:45.

collect tax on the law as it stands and not how people want it to be. In

:41:46.:41:49.

terms of reform of this area, I think there is no reason why we

:41:50.:41:53.

should not be these matters. I would just make the point, if it is a move

:41:54.:42:00.

towards profits on the basis of sales, and there is a perfectly

:42:01.:42:04.

respectable case for reform in that direction, I would be worried about

:42:05.:42:11.

the impact on the UK's creative sector, the scientific centre. I

:42:12.:42:15.

have mentioned the video games sector, we could look at

:42:16.:42:18.

pharmaceuticals and there are a number of areas where the UK could

:42:19.:42:22.

be losing out and businesses in our constituencies would lose out in

:42:23.:42:25.

those circumstances. I would just be a bit wary about that. Can I bring

:42:26.:42:31.

the honourable gentleman back to the fundamental point about

:42:32.:42:33.

transparency? It would make this debate more useful and easy if he

:42:34.:42:37.

would publish the details of this deal in full, so we can be sure

:42:38.:42:44.

we're not talking about eightrates and talking about a special tax

:42:45.:42:50.

loophole for Google? I will come to the issue of transparency, but let's

:42:51.:42:53.

talk about the record of this government in terms of changing

:42:54.:42:57.

domestic law and leading the way in updating the international tax

:42:58.:43:01.

system. This is the government that has led internationally on the G20

:43:02.:43:05.

and the OECD profit shifting project, making the international

:43:06.:43:12.

tax rules fit the 21st-century. The Prime Minister and the Chancellor of

:43:13.:43:14.

the Exchequer, in particular, took on highly prominent roles in

:43:15.:43:18.

initiating discussions and taking it through the G20 and the OECD. It

:43:19.:43:24.

will level the playing field, give tax authorities more effective tools

:43:25.:43:30.

to tackle aggressive tax planning and better aligned taxable profits

:43:31.:43:33.

with the location of economic activities and value creation. Can I

:43:34.:43:38.

make more progress? This is a major step forward in addressing the

:43:39.:43:42.

underlying causes of aggressive tax avoidance. We have been at the

:43:43.:43:45.

forefront of implementing this agenda, acting swiftly to change the

:43:46.:43:50.

rules on hybrid mismatches and country by country reporting.

:43:51.:43:54.

Because we consider it important not to rely on international rules, we

:43:55.:43:58.

have legislated domestically to introduce a world leading measure to

:43:59.:44:02.

address the contrived a shifting of profit from this country, the

:44:03.:44:05.

diverted profits tax. Let me make this point... The diverted profits

:44:06.:44:15.

tax targets companies who divert profits from the UK, principally

:44:16.:44:20.

those with substantial activities in the UK who are trying to avoid

:44:21.:44:24.

creating a UK permanent establishment. Under these rules,

:44:25.:44:28.

the companies either declare the correct amount of profits in the UK

:44:29.:44:31.

and pay the full amount of corporation tax on them, or risk

:44:32.:44:36.

being charged a higher amount of diverted profits taxed at a rate of

:44:37.:44:42.

25%. By the end of this Parliament, diverted profits tax will raise 1.3

:44:43.:44:48.

billion pounds, both directly and as a result of associated behavioural

:44:49.:44:55.

changes. Already we are seeing the diverted profits tax having that

:44:56.:44:58.

effect and we will see multinationals paying more

:44:59.:45:00.

corporation tax as a result. I will give way.. The diverted traffic tax

:45:01.:45:09.

was related to as the Google tax. Under the related deal, Google will

:45:10.:45:13.

not pay a penny, is he right about that? The purpose of the diverted

:45:14.:45:20.

profits tax is to deter companies from divert in the profits. We don't

:45:21.:45:24.

want companies to divert their profits. The purpose of the diverted

:45:25.:45:31.

traffic tax which came into effect in April, is to ensure that

:45:32.:45:35.

companies stop divert in their profits and pay corporation tax like

:45:36.:45:40.

everybody else. I cannot talk about the Google case, other than

:45:41.:45:46.

information that is in the public domain. But, the point being, if it

:45:47.:45:54.

is effective in driving companies to stop divert in their profits, then

:45:55.:45:59.

it is a success. Good evening I thank the Minister. He refers to the

:46:00.:46:07.

government over the last government, but hasn't talked about the changes

:46:08.:46:11.

which favoured a number of companies at the expense of the exchequer here

:46:12.:46:17.

and in net terms of the much greater expense of the exchequer is in

:46:18.:46:25.

developing countries. We are now in a position where businesses are

:46:26.:46:27.

looking to locate their headquarters in the UK. It is something I am

:46:28.:46:33.

pleased about. The Minister is making an important point about the

:46:34.:46:39.

diverted profits tax. It is something we all recognise that this

:46:40.:46:41.

important development was brought in by this development. It is not

:46:42.:46:45.

correct to say the Labour Party supported the diverted traffic tax.

:46:46.:46:52.

A year ago, the Labour Party's position said it wasn't wise to

:46:53.:46:59.

bring in the diverted profits tax until something else was completed.

:47:00.:47:03.

How do we take the advice of the Shadow Chancellor, there would be no

:47:04.:47:07.

diverted profits tax. The point being made by the party opposite

:47:08.:47:12.

would be irrelevant. I am grateful to my honourable friend, he reminds

:47:13.:47:17.

the House of an important point. What I would say, when we brought in

:47:18.:47:22.

the diverted profits tax, it was clear the intention was to ensure we

:47:23.:47:27.

got more money being paid in corporation tax and we want to stop

:47:28.:47:30.

companies by averting the profits out of the UK and we are leading the

:47:31.:47:34.

way in bringing forward legislation on this. Let me address the point

:47:35.:47:38.

that was raised by the Shadow Chancellor about resources for her

:47:39.:47:43.

HMRC. We have invested heavily in HMRC's ability to strengthen the

:47:44.:47:48.

anti-evasion and compliance activity, including two extra

:47:49.:47:52.

funding and hiring professionals, whose area of expertise is

:47:53.:47:56.

multinational companies. For example, contrary to the impression

:47:57.:48:00.

the Shadow Chancellor gives, the number of people working in HMRC's

:48:01.:48:05.

large business directorate has gone up since it was formed in 2014 from

:48:06.:48:11.

2000 to 2600 people. We believe in competitive taxes, that is why we

:48:12.:48:17.

have got our rate of corporation tax so it is the lowest in the G-7, but

:48:18.:48:20.

we also believe in making sure those taxes are paid. Let me address the

:48:21.:48:25.

issue of transparency and number of have raised. Taxpayer

:48:26.:48:31.

confidentiality is a fundamentally important principle of our tax

:48:32.:48:36.

system, as it is in the tax systems of every other major economy. I hear

:48:37.:48:42.

complaints HMRC are not disclosing full details of the settlement. HMRC

:48:43.:48:48.

are prevented by law from disclosing taxpayer information. But the

:48:49.:48:53.

resolution of tax disputes is however, subject to full external

:48:54.:48:59.

scrutiny by the independent National Audit Office. The independent

:49:00.:49:02.

National Audit Office has reviewed how tax enquiries are concluded by

:49:03.:49:08.

HMRC. In 2012 it appointed a retired High Court judge to investigate

:49:09.:49:14.

HMRC's large as the settlement process. He concluded all

:49:15.:49:18.

settlements he scrutinised were reasonable and the overall outcome

:49:19.:49:23.

for the exchequer was good. I will give way, but I wish those who are

:49:24.:49:28.

keen to accuse HMRC and the staff of sweetheart deals, were also quite

:49:29.:49:34.

keen to look at what happens when independent scrutiny occurs to see

:49:35.:49:38.

that in fact, there are no sweetheart deals. HMRC... I will

:49:39.:49:50.

wake. I am grateful to the Minister, who is doing his best in a difficult

:49:51.:49:55.

situation. However, it is not the case ministers are barred by law

:49:56.:49:59.

from publishing the minutes of meetings which they have. Could he

:50:00.:50:06.

now publish the minutes of all the 25 meetings which ministers have had

:50:07.:50:15.

with Google? We have a very open and transparent arrangements in terms of

:50:16.:50:18.

disclosure of meetings. But I can be very, very clear on this, when it

:50:19.:50:25.

comes to determining the tax liability of a company like Google,

:50:26.:50:33.

or indeed any other taxpayer in this country, there is no ministerial

:50:34.:50:37.

involvement. HMRC are entirely operationally independent. There is

:50:38.:50:42.

no ministerial interference or any suggestion they would be in these

:50:43.:50:47.

areas. This is a matter, when it comes to determining the tax bill of

:50:48.:50:54.

any taxpayer, it is a matter of HMRC enforcing the law and not for

:50:55.:51:02.

ministerial involvement. HMRC introduced new governance

:51:03.:51:05.

arrangements for tax disputes in 2012 to provide even greater

:51:06.:51:09.

transparency, scrutiny and accountability, including the

:51:10.:51:12.

appointment of attacks assurance Commissioner, to ensure clear

:51:13.:51:15.

separation between those who negotiate and those who approves

:51:16.:51:20.

settlements. This tax assurance Commissioner oversees the process

:51:21.:51:23.

and publishes an annual report on his word. Let me be absolutely

:51:24.:51:29.

clear, there are no sweetheart deals, no special treatment for

:51:30.:51:35.

large businesses. HMRC only resolve disputes by agreements, if the

:51:36.:51:39.

business agrees to pay the full amount of tax, penalties and

:51:40.:51:43.

interest. Otherwise it is a matter for the courts, an arena HMRC has a

:51:44.:51:49.

strong track record of fighting and winning. I will give way. I thank

:51:50.:51:58.

him forgiving way. If it is so independent and ministers are so far

:51:59.:52:01.

removed from this process, how can he give us the assurance and how can

:52:02.:52:07.

the Chancellor hailed that the deal was such a major success? We have in

:52:08.:52:14.

place strong governance. We have in place a situation where the NGO has

:52:15.:52:20.

looked in the past at settlement went accusations have been made of

:52:21.:52:23.

sweetheart deals and they have been dismissed. It is very clear HMRC's

:52:24.:52:29.

remit is to get the tax due under the law. No one, at any point, has

:52:30.:52:36.

produced any shred of evidence to suggest otherwise, other than just

:52:37.:52:40.

prejudice they can insult HMRC staff, whatever.

:52:41.:52:47.

Madam Deputy Speaker, let me give way to my honourable friend. Would

:52:48.:52:54.

the Minister agree that this is welcome because we collected ?130

:52:55.:52:59.

million in tax from Google when the side opposite collected nothing. It

:53:00.:53:05.

does seem to be the case that nothing was collected in that case.

:53:06.:53:08.

I need to press an Madam Deputy Speaker. Tax avoidance is a global

:53:09.:53:16.

issue requiring global solutions. Food for partnerships with other

:53:17.:53:19.

countries on these matters are partly why this government has been

:53:20.:53:23.

at the forefront of efforts to increase tax Baron Seri C -- tracks

:53:24.:53:30.

transparency which we pledged in the manifesto to review the

:53:31.:53:33.

implementation of the new international country by country tax

:53:34.:53:37.

reporting rules and consider the case for making this information

:53:38.:53:40.

publicly available on a multilateral basis. This government is dedicated

:53:41.:53:45.

to increasing tax transparency and has already taken action. Last week

:53:46.:53:50.

the UK signed an agreement with 30 other tax administrations to share

:53:51.:53:53.

country by country reports from next year, we want agreements so that

:53:54.:53:59.

information can be made public as spelt out in our manifesto and we

:54:00.:54:01.

will continue to lead any multilateral debates on tax

:54:02.:54:06.

transparency as we have in so many areas of international tax

:54:07.:54:13.

avoidance. Madam Deputy Speaker, reforming international and domestic

:54:14.:54:17.

rules, investing in the capacity of HMRC, leading the way on global

:54:18.:54:21.

transparency, action taken by this government, action is sadly lacking

:54:22.:54:25.

from the 13 years of Labour. Madam Deputy Speaker, the result of this

:54:26.:54:30.

action is an extra hundred and ?30 million to the Treasury from Google,

:54:31.:54:35.

on top of the tax paid, an amount which under Labour was next to

:54:36.:54:39.

nothing. Testament to the importance given to tackling the tax risks from

:54:40.:54:46.

multinational enterprises. Last month's announcement represents an

:54:47.:54:49.

important result of these actions and I can assure honourable members

:54:50.:54:53.

that we will continue to work as a gender in the coming years, giving

:54:54.:54:57.

the Exchequer more money to fund public services that we rely on and

:54:58.:55:01.

I urge this House to support the government's amendment. Thank you Mr

:55:02.:55:14.

Deputy Speaker. This is a very important to debate for all of the

:55:15.:55:18.

people who have commented outside this House, weather is great

:55:19.:55:22.

concern. Yet it also has to be admitted that this is a complex

:55:23.:55:26.

matter, one that may require in the longer run fundamental reform and

:55:27.:55:31.

international corporation, there are no easy fixes. Of course Google,

:55:32.:55:40.

this deal needs to be scrutinised for the sake of all those who are

:55:41.:55:44.

concerned that this might be described as a sweetheart deal. This

:55:45.:55:50.

is why I fully is aborted my SNP colleague the honourable member for

:55:51.:55:54.

Dundee East in taking the initiative in this issue and being the first

:55:55.:55:59.

person to write to the independent commission and seek an independent

:56:00.:56:04.

examination. Of course there is a lack of transparency in the deal but

:56:05.:56:07.

of course these are difficult matters and we may have to look at

:56:08.:56:11.

changing some of the rules regarding fat in the longer run. -- regarding

:56:12.:56:19.

that. The recent agreement between Google and HMRC is too many people

:56:20.:56:23.

very obscure and opaque and gives the appearance of being very

:56:24.:56:28.

generous to a large multinational corporation. It contrasts sharply

:56:29.:56:34.

with the experience of many local small and medium-sized businesses

:56:35.:56:37.

and I will be astonished if I am the only member in this House that is

:56:38.:56:41.

not received comment from innumerable small businesses about

:56:42.:56:46.

the unfairness that they perceive that this deal has brought to bear.

:56:47.:56:54.

If I could be allowed to quote from two businesses in my own

:56:55.:56:58.

constituency, it is galling that my business pays its taxes on time and

:56:59.:57:04.

in full yet huge corporations like Google do not, and seem to be able

:57:05.:57:09.

to avoid doing so figures. Services Jim Cruickshank -- so says Jim

:57:10.:57:16.

Cruickshank of a glazing company. And secondly, it seems that there

:57:17.:57:20.

are stringent rules for small domestic businesses but much easier

:57:21.:57:26.

time for larger companies. This often gives unfair competitive

:57:27.:57:29.

advantages to the large companies, says Stuart Manley of Kirkaldy. And

:57:30.:57:36.

that too is a concern for many of our domestic businesses, many of

:57:37.:57:40.

these largest corporations, because of the tax affairs and the

:57:41.:57:45.

complexity and the way in which they are able to work in many cases,

:57:46.:57:51.

legitimately in the system, find themselves having a major

:57:52.:57:53.

competitive advantage against domestic businesses. I am grateful

:57:54.:57:59.

for the honourable gentleman forgiving way. It does not contrast

:58:00.:58:06.

with the way that S M Es in the UK feel they have been treated with the

:58:07.:58:09.

impression that there is one tax law for them and another for large

:58:10.:58:13.

multinational companies. It also contrasts the British approach with

:58:14.:58:18.

the way that some of our European colleagues are approaching the same

:58:19.:58:22.

issues and who are holding out for a much better deal for their tax

:58:23.:58:29.

payers. Many people throughout Britain will feel that the

:58:30.:58:32.

honourable member has made a very fair point. Which is why I have

:58:33.:58:35.

argued that we must do something to have a proper investigation and by

:58:36.:58:42.

perhaps in the longer run we need to do something about transparency,

:58:43.:58:49.

otherwise it is difficult for us to bring to bear a proper critique

:58:50.:58:55.

unless you get that clarity. This is not a new phenomenon. I first became

:58:56.:58:59.

aware of concerns about this issue regarding multinationals back in

:59:00.:59:12.

1970s I briefly worked for IBM. I am aware two of concerns that predate

:59:13.:59:18.

that, so this has not been going on for a couple of years, this has been

:59:19.:59:22.

an issue for decades that governments have not been able to

:59:23.:59:27.

satisfactorily resolve. Emphasising its complexity. It is an issue that

:59:28.:59:35.

has been around for a long time regardless of whether in this

:59:36.:59:38.

country that has been a Conservative or a Labour government and

:59:39.:59:41.

regardless of the government in many other countries. Back in the early

:59:42.:59:45.

1970s I remember that the concerns then were about what is called

:59:46.:59:51.

transfer pricing where in one company could buy a handle from the

:59:52.:59:55.

parent company in another country and charge an exorbitant fee for it

:59:56.:00:00.

and that allowed them to easily transfer profits from one area to

:00:01.:00:05.

another. Now I am the first to admit that since the 1970s there have been

:00:06.:00:10.

moves to tighten up on many of these matters but it remains a fundamental

:00:11.:00:16.

problem to this day. And corporation tax does seem to be a tax that is

:00:17.:00:23.

very susceptible to avoidance by multinational corporations because

:00:24.:00:26.

of the way that they are quite legally able to operate. Speaking of

:00:27.:00:35.

transfer pricing the Public Accounts Committee found, Mr Debord is

:00:36.:00:40.

bigger, that the HMRC as a whole had only 65 specialists in transfer

:00:41.:00:43.

pricing which was the same as each of the big four accounting firms.

:00:44.:00:49.

Does he welcomed this government's introduction of more transfer

:00:50.:00:53.

pricing specialists into HMRC? Punch Mike those people who wish to speak,

:00:54.:00:58.

without intervening, they if they go to the bottom of the list because

:00:59.:01:02.

they have almost used up their time. Roger Mullin. I think the honourable

:01:03.:01:06.

member for his intervention. I was not aware of only 65 involved in

:01:07.:01:12.

transfer pricing which does seem to me remarkably little given the

:01:13.:01:16.

challenge that it has faced. So I would welcome anything that is done

:01:17.:01:23.

to strengthen that. Times have been changing. Back in the 1970s it was

:01:24.:01:28.

never envisaged that huge multinational corporations could

:01:29.:01:31.

quickly rise and operate in the world of the Internet. The tax

:01:32.:01:37.

system built up over many years, one honourable member mentioned from the

:01:38.:01:43.

1920s, is singularly unable to deal with some of the types of

:01:44.:01:47.

corporations like Facebook and Google that we have today. And the

:01:48.:01:52.

world also has changed, in other regards. I am old enough to remember

:01:53.:01:58.

when I used to be able to go into a cafe and just ask for a copy! Surely

:01:59.:02:04.

not! LAUGHTER

:02:05.:02:10.

No air in delight it is that I know about cappuccinos and other things!

:02:11.:02:16.

-- now I'm delighted to disable and I know about them! Including in my

:02:17.:02:21.

constituency! Am delighted to say that I know about them. But I have

:02:22.:02:27.

to say, the days of Starbucks were not present many years ago. The days

:02:28.:02:33.

of internationalising what seemed simple products is something that is

:02:34.:02:39.

a comparatively new phenomenon. And we must not lose sight that that

:02:40.:02:45.

much more traditional companies who engage in practices which may be

:02:46.:02:51.

legal yet create major challenges for international corporations. For

:02:52.:02:55.

example if I were to ask a question in the local pub quiz which I rarely

:02:56.:03:00.

frequent, of course... Because and linking copy! What would you

:03:01.:03:05.

consider to be the biggest charity in the world -- because of course

:03:06.:03:09.

I'm drinking coffee. Many people would say it would be the Bill Gates

:03:10.:03:13.

foundation, the economist has estimated that is worth about ?37

:03:14.:03:19.

billion. Few would be able to say, as the Economist pointed out some

:03:20.:03:26.

years ago, it is a charitable body whose aims include the advancement

:03:27.:03:35.

of architecture and interior design. This charitable foundation owns Inge

:03:36.:03:46.

Holding and they owned the IKEA group. This setup, much more complex

:03:47.:03:54.

than I just described, moves money across territories such as the

:03:55.:03:59.

Netherlands, Luxembourg, into sets in and and so on, and the money is

:04:00.:04:03.

not even trapped within that foundation. The IKEA trademark is

:04:04.:04:14.

owned by another private company. Inter-IKEA Systems. So just to

:04:15.:04:21.

operate IKEA stores, the charity hast to meet substantial yearly

:04:22.:04:26.

payments and eventually this trail is thought to lead back to the

:04:27.:04:35.

owning family. When you have such complexity come even more complex

:04:36.:04:39.

than I have tried to summarise, we can see that type of international

:04:40.:04:44.

challenge and why the current tax regime is not well equipped to cope

:04:45.:04:47.

and why we need fundamental reform. And there are other examples. Let me

:04:48.:04:54.

give you another glimpse of a tactic used by offshore companies. There

:04:55.:05:04.

are approximately 19,000 registered businesses at one single address in

:05:05.:05:08.

the Cayman Islands. That must be a pretty big house!

:05:09.:05:15.

LAUGHTER Full of IKEA furniture! Indeed, it

:05:16.:05:23.

has been claimed by Oxfam, I haven't checked this, so I can only say it

:05:24.:05:28.

has been claimed by Oxfam, that 98 of the FTSE 100 companies have

:05:29.:05:35.

subsidiaries in tax havens. And there's a wider ethical question.

:05:36.:05:39.

This is not merely about how international corporations may pay

:05:40.:05:44.

tax. Some countries are much more vulnerable than the UK. And there

:05:45.:05:49.

are particular concerns which the honourable member is already raised

:05:50.:05:56.

in the developing world, some 30% of Africa's Wealth is held offshore.

:05:57.:06:05.

Research has found that developing countries lose ?200 billion a year

:06:06.:06:11.

from tax avoidance, more than they get in all forms of foreign aid. And

:06:12.:06:17.

the UK itself needs to take a lead and hopefully we will see that when

:06:18.:06:24.

the Prime Minister holds the anti-corruption Summit in May 2016

:06:25.:06:28.

because the UK remains at the centre of some global networks. I'm

:06:29.:06:33.

grateful to the honourable gentleman for giving way. Does he also think

:06:34.:06:37.

given it is three years since the Prime Minister promised to clamp

:06:38.:06:42.

down on tax evasions and publish the organisations people, UK-based

:06:43.:06:47.

companies in these overseas territories, that he should fulfil

:06:48.:06:51.

his obligations? A manifesto commitment he has failed to fulfil.

:06:52.:06:58.

I agree with the honourable member, but hopefully he will fulfil that at

:06:59.:07:03.

the conference he will chair shortly. We shall wait and see. I

:07:04.:07:08.

shall conclude with another example close to the heart of the Scottish

:07:09.:07:13.

people. And that is our historic links in them allow me. We launched

:07:14.:07:21.

a new campaign this week calling for the UK to offer to negotiate a

:07:22.:07:27.

fairer tax treaty with Malawi. We have got some strong and important

:07:28.:07:34.

links in every constituency, in Scotland we have links with Malawi.

:07:35.:07:42.

The tax treaty was signed in 1955 under British colonial rule and

:07:43.:07:46.

limits the ability of the government of Malawi to collect tax revenues

:07:47.:07:53.

from UK firms operating there. Preventing it from raising money

:07:54.:07:59.

that poor country desperately needs. It is right there should be a

:08:00.:08:05.

thorough investigation into the Google settlement. It is right we

:08:06.:08:08.

should press for greater transparency. But it is also right

:08:09.:08:14.

we should now press the UK to take an international lead in addressing

:08:15.:08:20.

the corrupt tax avoidance practices of the many and not just the few.

:08:21.:08:25.

Getting our own House in order would be a fine start. I shall do my best

:08:26.:08:35.

to make the most of the three minutes available to me. This is a

:08:36.:08:42.

complicated area. Whilst we seem to have two approaches on either side

:08:43.:08:45.

of the House, the Shadow Chancellor was very rational in his approach

:08:46.:08:50.

and I recognise how strongly there are feelings around this topic. When

:08:51.:08:56.

you look at the approach from the Minister, it was a very measured and

:08:57.:09:03.

detailed approach. Unfortunately, the tax system has to be approached

:09:04.:09:07.

from a methodical and detailed way and cannot be emotional. I can

:09:08.:09:14.

understand the strength of those motions and I understand how people

:09:15.:09:17.

feel some of these large international companies don't pay

:09:18.:09:19.

the fairway. But we are blessed with the global taxation system

:09:20.:09:25.

agreement, whereby you actually pay, not on the profit that you make in

:09:26.:09:30.

that country, but where you add the value, where you create the IP of

:09:31.:09:39.

those subjects, if you like. I turn to the SNP spokesman who talked

:09:40.:09:46.

about the kill caddy from shop, clearly excellent produce from his

:09:47.:09:50.

shop, but if he were to export his poor pies to parity would expect to

:09:51.:09:56.

pay the profit on that caught pike in Scotland and not in Paris. That

:09:57.:09:59.

is the way this country has benefited a great deal. If we look

:10:00.:10:07.

at my own constituency, it has Rolls-Royce, fantastic international

:10:08.:10:11.

company where they create a world leading jet engines. A use

:10:12.:10:16.

manufacturers and subsidiaries all over the world, but those dividends

:10:17.:10:20.

and the profit of that company should be paid to the UK taxpayer

:10:21.:10:23.

and not to other countries in the world. The Minister already made

:10:24.:10:27.

reference to the video games industry. In Nottinghamshire we were

:10:28.:10:38.

create the -- blessed with Boots who created new offence and the profits

:10:39.:10:46.

for those drugs should stay in this country. I was lucky enough to go

:10:47.:10:52.

and see the latest James Bond movie, created at Pinewood Studios in the

:10:53.:10:57.

UK. The profits from those movies, the tax should be paid in this

:10:58.:11:03.

country and not all over the world. I turn to the opposition and say

:11:04.:11:07.

what happened under the regime, frankly no tax was gained from

:11:08.:11:13.

Google. I am running out of time, but we need to recognise it is more

:11:14.:11:17.

important to get some of those profits, rather than all of nothing

:11:18.:11:20.

if they are exported to other countries. Thank you.

:11:21.:11:30.

I think the most bizarre feature of the row over the last ten days is

:11:31.:11:38.

both Google and the Chancellor but they had landed a PR coup. Frankly I

:11:39.:11:43.

think the arrogance of Google and the hopelessness of our government

:11:44.:11:47.

takes some beating. Look at Google's results announced this week, they

:11:48.:11:51.

claim to be the world's most valuable company. A claim with pride

:11:52.:11:57.

they have put the tax rate from 18% down to 5%. If you look at the man

:11:58.:12:03.

of the top, the man who is very proud of the tax structure, it is

:12:04.:12:10.

called capitalism, in 2014 alone he was paid ?76 million and that is the

:12:11.:12:13.

equivalent of well over half of what Google paid the British public for

:12:14.:12:17.

all of the money they made out of the British public over ten years.

:12:18.:12:27.

Would she agree with me, or is she concerned, the Google agreement

:12:28.:12:31.

could present a threat to future tax revenues by setting a very dangerous

:12:32.:12:36.

resident? I agree with that entirely and the Minister talked about work

:12:37.:12:42.

that was done by the Public Accounts Committee, the law is not a complete

:12:43.:12:47.

ass. I don't believe that. When they looked at ten cases, I will be

:12:48.:12:52.

corrected if I'm wrong, they found three where the HMRC had not abided

:12:53.:12:56.

by its own rules. Every time something like this happens, it

:12:57.:13:05.

damages British jobs and British business and we have the Goldman

:13:06.:13:09.

Sachs example where a sweetheart deal was definitely entered into,

:13:10.:13:14.

one we have proof of. It was five cases and in every single case, Sir

:13:15.:13:21.

Andrew Parker concluded it was reasonable and the overall result

:13:22.:13:24.

for the Exchequer was good. Those are the facts. With the greatest

:13:25.:13:29.

respect, they are not the facts, the judge looked at five cases, the NAO

:13:30.:13:35.

look at ten cases and found in three of those big HMRC had not abided by

:13:36.:13:40.

its own rules. I think the reason his Chancellor and the team don't

:13:41.:13:43.

get it, is because of the people they talk to about tax. There is a

:13:44.:13:49.

small army of tax professionals and multinational companies who are the

:13:50.:13:54.

only people with whom they conversed. I have to say to the

:13:55.:13:59.

Minister, there is a difference between good working relationships,

:14:00.:14:03.

which I applaud, and undue preference and preferential

:14:04.:14:05.

treatment, which I don't. There is the good thing about talking to

:14:06.:14:11.

stakeholders, there is the bad thing about being captured by

:14:12.:14:15.

stakeholders. We have to look at the evidence, not just the 25 meetings

:14:16.:14:19.

held with Google, but the professional tax Forum, the members

:14:20.:14:26.

are KPMG, Ernst and Young, nobody, nobody from any of the tax

:14:27.:14:30.

campaigning organisations, nobody from any of the charities and no

:14:31.:14:34.

academic with a different view. If we look at Ernst and Young, they

:14:35.:14:39.

made ?250 million over recent years in advising Google, apple, Facebook

:14:40.:14:45.

and others. We look at what the Minister has done. He appointed

:14:46.:14:51.

David Heaton from Baker Tilly which was supposed to look at closing the

:14:52.:14:58.

loopholes. That particular gentleman was captured on video describing,

:14:59.:15:04.

and I quote," ways to keep the money out of the Chancellor's grubby

:15:05.:15:10.

hands". If we look at what happened at Dave Hartnett within six months

:15:11.:15:14.

of going to work at HMRC and with any year of going to work at

:15:15.:15:18.

Deloitte. And also the Commissioner on taxation who wrote in the

:15:19.:15:22.

Financial Times, taxation is legalised extortion. This is a small

:15:23.:15:27.

bunch of people who all have the same interest and do not have the

:15:28.:15:33.

widest interests at heart. The government says it wants companies

:15:34.:15:36.

to paid drop attacks, but the government is obsessed with tax

:15:37.:15:42.

competition. That means that far from tackling tax havens, it is

:15:43.:15:45.

trying to make the UK and alternative best tax haven in the

:15:46.:15:51.

world. You only have to look at the changes this government brought

:15:52.:15:55.

through uncontrolled foreign company rules, Europa one or even the

:15:56.:16:01.

infamous tax relief, those three examples to see it is right. We

:16:02.:16:06.

don't know if the Google settlement was fair, because under the existing

:16:07.:16:09.

law, the Minister is right, we cannot see it. I do not accept HMRC

:16:10.:16:17.

properly challenged Google on the evidence of the Public Accounts

:16:18.:16:21.

Committee collected, which demonstrated there was economic

:16:22.:16:26.

activity here in the UK. I personally don't think the

:16:27.:16:28.

whistle-blowers were properly listen to. Google do sell here, they do

:16:29.:16:36.

complete sales here, they do to economic activity here. What is that

:16:37.:16:42.

massive complex in King's Cross for if it is not to undertake economic

:16:43.:16:47.

activity? The Minister has lost the argument on transparency and he

:16:48.:16:52.

should cave in gracefully and open the books month a national

:16:53.:16:57.

company... Order, order. Nigel Huddleston. May I first draw members

:16:58.:17:03.

attention to the register of interests by declaring drier to the

:17:04.:17:12.

2015 general election, I worked for Google. I must make it very clear I

:17:13.:17:17.

am not a spokesperson for Google, I did make, in my maiden speech, made

:17:18.:17:22.

it clear I do wish to be an advocate for the Internet and digital set is

:17:23.:17:29.

in the UK, which at 12.4% of GDP, is the largest of any Internet sector

:17:30.:17:32.

in the world, greater than Germany, France and double the size of the

:17:33.:17:36.

US. But the point of whether Google or any of these Internet companies

:17:37.:17:40.

pays its fair share of tax is a reasonable one? Google does many

:17:41.:17:45.

things, deciding on tax law is not one of them. That is very squarely

:17:46.:17:49.

the responsibility of this place. We make those decisions in here. If we

:17:50.:17:54.

want to change the laws, it is our responsibility. Corporation tax,

:17:55.:18:00.

like income tax, is not a voluntary tax. You pay what you owe, no more,

:18:01.:18:07.

no less, according to the law. HMRC do a very good job at implementing

:18:08.:18:11.

that law and the difficult circumstances. In particular the

:18:12.:18:15.

companies that are complex, that deal internationally where it is

:18:16.:18:18.

difficult to hold intangible products, where there is

:18:19.:18:22.

international poverty and transfer pricing involved and customers are

:18:23.:18:25.

served from multiple territories. What really really need to do, as

:18:26.:18:33.

Mike honourable friend made a valid point, is update the international

:18:34.:18:35.

trade laws because international trade is as likely to be conducted

:18:36.:18:39.

with the push of a button as being shipped in canisters and widgets

:18:40.:18:44.

from country to country. Our tax laws, some of them are as old as the

:18:45.:18:47.

1920s. While this government is trying to make progress and has

:18:48.:18:53.

closed many loopholes, we have a lot more to do. Nothing should be taken

:18:54.:18:58.

out of consideration. We should consider whether corporation tax in

:18:59.:19:02.

its current form is still fit for purpose and the valid comments about

:19:03.:19:08.

establishing international property in international tax havens, whether

:19:09.:19:11.

it is valid or not, is a fair one to investigate. I have one final thing

:19:12.:19:18.

to say. We must remember Google was only founded in 1998, it makes it a

:19:19.:19:26.

teenager. Like many of the other major Internet companies, they are

:19:27.:19:29.

teenagers. Teenagers make mistakes and they need guiding. It is up to

:19:30.:19:35.

us and the responsibility of a responsible parents, to make sure we

:19:36.:19:38.

reset the ground rules on behaviour. The Google tax to Barca will

:19:39.:19:51.

demonstrate attempts to patch up the current international tax system are

:19:52.:19:59.

clearly, woefully inadequate. Despite the overhaul, it appears

:20:00.:20:04.

unlikely corporate tax will be an optional extra for most

:20:05.:20:06.

multinational companies going forward. The UK's tax treaties, this

:20:07.:20:14.

is to do with Ireland as well in terms of Google, would allow UK

:20:15.:20:19.

firms to allow their tax payments often in countries it is most

:20:20.:20:23.

needed, to fund hard pressed the big services. According to the IMF,

:20:24.:20:32.

recent calculation show developing countries are taking 200 billion a

:20:33.:20:39.

year in tax avoidance by companies. The OECD has estimated tax havens

:20:40.:20:45.

could be costing these countries three times the global aid budget

:20:46.:20:50.

currently. The value flowing out of countries is huge from companies not

:20:51.:20:54.

paying the tax. An estimated one trillion dollars a year, in context

:20:55.:21:00.

Africa is a net creditor to the world in terms of the taxi loses

:21:01.:21:04.

from multinational companies operating in their jurisdictions.

:21:05.:21:09.

According to Oxfam, corporate tax avoidance in the form of trade

:21:10.:21:13.

mispricing by the G-7 -based companies and investor costs, Africa

:21:14.:21:20.

six billion in 2010. More than enough to improve the health care

:21:21.:21:25.

systems of the bowler affected countries of Sierra Leone and New

:21:26.:21:33.

Guinea. Then anonymous shell companies on the British version

:21:34.:21:35.

Isles using minor concessions in the Democratic Republic of Congo for 275

:21:36.:21:43.

million. They were sold for 1.6 three billion or twice the combined

:21:44.:21:52.

health or education budget. What is to be done? David Cameron is hosting

:21:53.:21:59.

an anti-corruption Summit in May and inviting heads of state from all

:22:00.:22:03.

over the world to London. How can the UK lecture other countries in

:22:04.:22:05.

what they should be doing in tax avoidance and corruption when the

:22:06.:22:09.

Crown dependencies in overseas Territories in our own

:22:10.:22:14.

constitutional backyards are such purveyors of secrecy. I argued with

:22:15.:22:18.

the minister about this on radio five just before the election, we

:22:19.:22:22.

need to insist multinationals public accounts in every country, insist

:22:23.:22:25.

they clean up the backyard by making British link tax havens that cannot

:22:26.:22:31.

continue to act as conduits for tax dodging. We need to stop applying

:22:32.:22:38.

sticking plasters to a broken OECD tax rules mandate and the UN to

:22:39.:22:43.

develop a set of rules that show big business pay their fair share of tax

:22:44.:22:46.

on every country in which they do business in.

:22:47.:22:53.

I think it would be unfair. Mr deputy speaker, I will be great. The

:22:54.:23:02.

member for Wythenshawe said that paying corporation tax is an

:23:03.:23:06.

optional extra. If he is right, and there are good arguments, it is

:23:07.:23:09.

because of the unbridled complexity of the system. The character... When

:23:10.:23:18.

I went to the Public Accounts Committee tax conference organised

:23:19.:23:22.

by the Right honourable member for Barking, the Dame Professor lady

:23:23.:23:25.

right honourable lady for barking, I discovered the tax code is 17,000

:23:26.:23:31.

pages long. That is the central problem. If you made the Bible ten

:23:32.:23:37.

times longer, you would not expect there to be less work for

:23:38.:23:41.

theologians. This is what we need to sort out fundamentally. The

:23:42.:23:47.

complexity is not always avoidable in a mature economy but there are

:23:48.:23:51.

things that one can do to make it simpler. The office of tax

:23:52.:23:57.

simplification actually examined 155 different tax reliefs for the

:23:58.:24:01.

possibility of abolishing them. It recommended 47 for abolition and 43

:24:02.:24:06.

actually were abolished but, over the same period, it introduced, or I

:24:07.:24:09.

should say the government of the day through this place introduced 134

:24:10.:24:16.

new tax reliefs. That gave a total, according to the office of text

:24:17.:24:22.

implication, 1140 tax reliefs. HMRC had thought there were only 398, so

:24:23.:24:29.

you can see how extraordinarily complex this is. That is the problem

:24:30.:24:33.

which needs tackling. If the system can only be dealt with with a high

:24:34.:24:36.

priestly caste and you combine that with a global economy you will get

:24:37.:24:42.

what we have got. It is this government which introduced the idea

:24:43.:24:45.

of the office of tax simplification and this government has started to

:24:46.:24:49.

do something about flattening and simplifying the system. There is

:24:50.:24:54.

also the question of the cost. Sometimes tax relief costs a lot

:24:55.:24:58.

more than HMRC expects. When the right honourable lady introduced a

:24:59.:25:03.

film tax credit, she was horrified to find that, using the law of the

:25:04.:25:07.

land, some clever entrepreneurs and accountants went round doing things

:25:08.:25:10.

which bore some relations but perhaps, for her taste, too

:25:11.:25:16.

tangential in relation to UK film activity but were which in the law.

:25:17.:25:22.

They ended up costing taxpayers hundreds of millions more than was

:25:23.:25:26.

expected. This government is actually starting to tackle the

:25:27.:25:31.

problem. It hasn't made all of the progress it needs to. It is a very

:25:32.:25:34.

big problem indeed but at least it is starting to tackle it. The

:25:35.:25:38.

previous government didn't collect this tax. This government is making

:25:39.:25:45.

a start and I commend its activity. I am highly enamoured of the record

:25:46.:25:50.

of the last Labour government, particularly its treasury policies,

:25:51.:25:53.

and I'm grateful to my right honourable friend for drawing

:25:54.:25:57.

attention to the Financial Times assessment of the comparative record

:25:58.:26:00.

of the Labour government and the governments since then, reported on

:26:01.:26:06.

in an article in the newspaper last February. That article makes three

:26:07.:26:14.

very important points to set the record straight. First, it says the

:26:15.:26:20.

current Chancellor, and I quote, has raised much less income than the

:26:21.:26:23.

last Labour government from reforms to tackle corporate tax avoidance,

:26:24.:26:31.

much less than was the record of the last Labour government. The second

:26:32.:26:34.

point has already been referred to by my honourable friend in his

:26:35.:26:38.

introduction, and I'm quoting directly, measures put in place by

:26:39.:26:42.

Labour during its 13 years in power to counter corporate tax avoidance

:26:43.:26:47.

are projected to raise ten times as much over the next four years as

:26:48.:26:51.

those introduced by the Coalition Government. The third point, the

:26:52.:26:56.

important point, the coalition, and I quote again, eased laws aimed at

:26:57.:27:04.

stopping corporates using tax havens which had been repeatedly tightened

:27:05.:27:09.

under Labour. That is the difference between the record of the government

:27:10.:27:15.

that I was a Treasury minister in and the current government. It was,

:27:16.:27:20.

in fact, Labour in government that did the heavy lifting on corporate

:27:21.:27:26.

tax avoidance. The new government was elected, with different

:27:27.:27:29.

priorities, and it is entitled to that, but it cannot claim that it

:27:30.:27:33.

has maintained the progress that was made by Labour in government,

:27:34.:27:36.

because it hasn't. I also want to make a comment about country by

:27:37.:27:42.

country reporting. I welcome that the government seems now to be

:27:43.:27:46.

supporting that. Those close to the process and find it difficult to

:27:47.:27:50.

recognise the claim that this government has let on that since

:27:51.:27:53.

2010. We certainly were leading on it prior to that. The original idea

:27:54.:27:59.

for country by country reporting was devised by Richard Murphy, about who

:28:00.:28:02.

we have heard a lot more in the last couple of years. It was first

:28:03.:28:09.

brought to me when I was occupying the Minister's office by Christian

:28:10.:28:13.

Aid, and I pay tribute to their work on this. They came to see me in

:28:14.:28:19.

early 2009 and there were a series of meetings in Berlin and Paris and

:28:20.:28:24.

others. I was able to put this on the agenda, culminating in a joint

:28:25.:28:29.

meeting, I think, the first joint meeting of the OECD tax and

:28:30.:28:33.

development amity in January 2010 in Paris, which kicked off the process

:28:34.:28:38.

I am delighted the government is now swinging behind. But it was Labour

:28:39.:28:42.

in government which started this off and it is entitled to credit for

:28:43.:28:49.

that. I start by saying that it is rich to attack this government for

:28:50.:28:53.

collecting tax. Big multinational corporations cannot carry on as they

:28:54.:28:57.

have in the past and they must expect to pay more tax. Google's

:28:58.:29:03.

payment is an important step forward to address the long-standing problem

:29:04.:29:06.

that larger corporations were not paying fair amount of tax in the

:29:07.:29:11.

past, under the last Labour government. Let's be clear today.

:29:12.:29:15.

Any debate about that last tax in particular and aggressive tax

:29:16.:29:18.

avoidance debate in general are of course about the gap is a -- as

:29:19.:29:23.

against what passed law asked to be collected. Today's debate should

:29:24.:29:28.

rightly look ahead to whether and how our laws should change to

:29:29.:29:32.

collect more. Let's start with an understanding of the present tax

:29:33.:29:39.

gap, reported to be ?24 billion, 6.4% of tax liabilities. Let's have

:29:40.:29:43.

another look at what else is ?34 billion might buy you. It is half

:29:44.:29:46.

the deficit that the side opposite also let us, whereas public sector

:29:47.:29:53.

net borrowing is around... ?34 billion is three times more the pay

:29:54.:29:59.

bill for nurses, Mr Deputy Speaker. Let's break it down further and give

:30:00.:30:04.

international examples. Just ?1 billion would buy what we have

:30:05.:30:08.

contributed to be Ross and in the global fight against malaria. Let's

:30:09.:30:12.

also look at what that is made up of. Only one third is committed by

:30:13.:30:18.

large businesses. One half is in fact committed by small and

:30:19.:30:21.

medium-sized businesses, with the rest made up by what I take to the

:30:22.:30:26.

individuals in error and criminals in malice. We need to take to looks

:30:27.:30:32.

at this. First, is the law applied fairly? We should expect HMRC to

:30:33.:30:36.

collect as much as physically possible from every source, large

:30:37.:30:41.

and small, mistaken or malicious, under a fair application of existing

:30:42.:30:46.

law. Second, is the law fair itself and let's address whether and how

:30:47.:30:51.

our law needs to change further to ask for more tax. This is an

:30:52.:30:54.

international question and I welcome the OECD work on base erosion and

:30:55.:31:00.

profit shifting. I look forward to scrutinising the results in the

:31:01.:31:03.

finance bill to come, perhaps, because it is ready to implement. I

:31:04.:31:08.

welcome the government's leadership on a diverted profits tax and I look

:31:09.:31:11.

forward to hearing a summary of what it has brought in in its first year.

:31:12.:31:17.

In summary, I want tough action to ensure law companies pay their fair

:31:18.:31:21.

share of tax. I want more tax to be collected. I want the laws we

:31:22.:31:26.

already have two be used. I want new laws to be reported upon carefully

:31:27.:31:30.

so my constituents can be assured we are collecting what we need and I

:31:31.:31:35.

want Britain to continue to lead the world in the OECD's implementation

:31:36.:31:38.

in a sensible set of international measures. Thank you for allowing me

:31:39.:31:44.

the opportunity to contribute to this very important debate. I was

:31:45.:31:50.

originally going to start this speech by going through the

:31:51.:31:53.

alphabet, naming different companies which didn't pay their fair share of

:31:54.:32:00.

tax. Amazon, BP, Citigroup, Dell, eBay, Facebook, Google. Google. I

:32:01.:32:09.

stopped at Google and went to the search engine of the same name and

:32:10.:32:15.

searched for the word alphabet. I would assume that most people would

:32:16.:32:18.

assume I would have found information on the alphabet. But,

:32:19.:32:26.

no. What came up was alphabet incorporated. It turns out that the

:32:27.:32:32.

Google we all know and use has created a parent company, and it is

:32:33.:32:37.

called Alphabet. Alphabet is a multinational conglomerate created

:32:38.:32:41.

last year, a parent company of Google and several other companies

:32:42.:32:46.

previously owned by or tied to Google. It is the world's most

:32:47.:32:51.

valuable company, even wealthier than Apple. However, it does have

:32:52.:32:57.

something in common with Apple, the desire not to pay tax. In a world

:32:58.:33:01.

which is increasingly becoming more and more connected, and as we seek

:33:02.:33:08.

to develop far reaching global trade deals, we find ourselves in a

:33:09.:33:13.

situation where multinational corporations are moving their money

:33:14.:33:18.

and profits around the world. And we should be under no illusions as to

:33:19.:33:21.

why they do this. It is to maximise their profits by reducing their tax

:33:22.:33:28.

liability. So how do we make multinational companies pay their

:33:29.:33:34.

tax, when they invest so much money and time in trying to dodge paying

:33:35.:33:41.

them? Indeed, they use any system, loophole, avenue open to them to get

:33:42.:33:47.

out of paying their tax obligation. With this Chancellor, they have even

:33:48.:33:51.

got someone on the inside helping them out. Quite frankly, it sends

:33:52.:33:59.

out the wrong message. Now, the Chancellor often referred to as the

:34:00.:34:04.

octopus. With his tentacles reaching every part of government. He has

:34:05.:34:10.

declared this tax deal with Google as a victory. He may be the octopus,

:34:11.:34:15.

but we are not his suckers. He should publish the details of the

:34:16.:34:23.

deal, show transparently what was agreed, deal with every loophole

:34:24.:34:29.

which comes in forward and make sure we deal with the deficit by ensuring

:34:30.:34:34.

that those who can pay do pay. I joined my colleagues today in

:34:35.:34:36.

demanding that the government publish full details of the deal and

:34:37.:34:40.

implement country by country reporting of company accounts. I

:34:41.:34:48.

think this is a very timely debate and I am very grateful that I have

:34:49.:34:53.

been given the opportunity to speak in it. I think it is important to

:34:54.:34:57.

remember what the previous government actually did, because we

:34:58.:35:00.

have got members of that government who are speaking eloquently, in many

:35:01.:35:07.

cases, in this particular debate. It is absolutely relevant. That

:35:08.:35:10.

actually gives us the context in which this debate has been called.

:35:11.:35:19.

For 13 years, Labour were in power and, for at least the last five of

:35:20.:35:23.

those years, these multinational companies, Amazon, Google, Apple,

:35:24.:35:30.

paid almost no corporation tax whatsoever. That was the immediate

:35:31.:35:35.

context. I know that the honourable member for East Ham is suggesting...

:35:36.:35:43.

You know, is suggesting that that was a great record at that

:35:44.:35:48.

government had. It wasn't great. These companies paid very little,

:35:49.:35:52.

they paid very little, and this is the general context. It is quite

:35:53.:35:56.

right for the Shadow Chancellor to bring up this debate. I think he

:35:57.:36:01.

makes a reasonable point, that ordinary people, our constituents

:36:02.:36:05.

expect companies to pay their fair share, but I would observe that the

:36:06.:36:08.

very fact he points out with respect to Google employing thousands of

:36:09.:36:14.

people at very high salaries, in a way, shows the success of Google. It

:36:15.:36:19.

shows the success of this government in creating a business friendly

:36:20.:36:23.

environment, in which these companies can operate. Every single

:36:24.:36:29.

one of those employees are paid an average -- who are paid an average

:36:30.:36:33.

of ?161,000 per year are contributing to the Treasury in the

:36:34.:36:37.

form of income tax and other taxes. That fact should be observed. If we

:36:38.:36:45.

are looking at actually being able to tax multinational companies, and

:36:46.:36:50.

we have to consider the fact that, as the member for Sherwood

:36:51.:36:54.

suggested, they are operating in lots of jurisdictions and, in many

:36:55.:36:58.

cases, if they are not Internet companies, they will probably only

:36:59.:37:03.

be paying tax in one country. There lots of variations we need to

:37:04.:37:06.

consider. I don't think is right for members on the party opposite simply

:37:07.:37:14.

to try and score political capital in a sensitive debate and in a

:37:15.:37:19.

highly complicated debate. Lastly, as my honourable friend, the member

:37:20.:37:25.

for South Norfolk, has said, the reason why do companies avoid tax is

:37:26.:37:29.

because of the complexity. There is a direct correlation between their

:37:30.:37:34.

propensity to avoid tax and the complexity of the system, and that

:37:35.:37:39.

is something which the last Labour government had a pretty poor record

:37:40.:37:43.

on. So this is a complete debate and I object to the fact that they are

:37:44.:37:45.

scoring political points. He may have got more respect if he

:37:46.:37:57.

listened with respect to the views of my right honourable friend, the

:37:58.:38:03.

member for Barking. What we know? Google is valued at $524 billion,

:38:04.:38:10.

the profits last year were ?11 billion, an increase of 1 billion in

:38:11.:38:15.

a year, based on revenues of over ?52 billion. The Daily Mail reports

:38:16.:38:21.

it has over 5000 UK-based employees, a 10th of their total workforce and

:38:22.:38:27.

that includes 279 of their European, Middle East and African directors,

:38:28.:38:33.

compared to Dublin, where they have 79 directors. They are constructing

:38:34.:38:37.

a new headquarters worth 1 billion near King's Cross, on top of the

:38:38.:38:46.

other five offices they have in the UK. I do not want to get into the

:38:47.:38:50.

blame game. I want is to get the way we recover tax right. I believe

:38:51.:38:52.

there are factors that did not help to focus on a growing problem.

:38:53.:38:58.

Public finances up to 2008 were healthy, before netting 30% of tax

:38:59.:39:06.

receipts from financial services which fell by 2009. The online

:39:07.:39:11.

giants of today were largely below the radar and many floated before

:39:12.:39:15.

making a penny profit. We look at the corporate giants, Twitter,

:39:16.:39:21.

valued at ?18 billion on the day of flirtation, but it never made a

:39:22.:39:25.

profit up to that point and would not do so for another year --

:39:26.:39:31.

flotation. When Google floated, its valuation was $23 billion, but it

:39:32.:39:34.

did not turn profits we talk about today. That is not the case today.

:39:35.:39:41.

The government after six years, with all the benefit of hindsight has

:39:42.:39:46.

only achieved ?130 million of that we do not know how much is interest

:39:47.:39:53.

or penalties they have had to pay. We have to do more on this. We can

:39:54.:39:57.

add other household names to the list that paid no corporation tax in

:39:58.:40:06.

2014. Shell, Lloyds Banking Group, AstraZeneca, SAB Miller, Vodafone,

:40:07.:40:09.

British American Tobacco, six companies with a combined profit of

:40:10.:40:14.

?30 billion in 2014 but notionally not making money in the UK. I will

:40:15.:40:21.

give way. Does she not agree that initiatives like the fair tax mark,

:40:22.:40:26.

like the fair trade stamp, should encourage companies to demonstrate

:40:27.:40:29.

publicly their tax liabilities and they should wear it as a badge of

:40:30.:40:35.

pride? I think there is cross-party support for more transparency. Given

:40:36.:40:40.

Google, H MRC and the Chancellor publicised the outcome, surely they

:40:41.:40:46.

should be open about how they arrived at 130 million. We need to

:40:47.:40:50.

know the benchmark it sets for other companies as well. Government makes

:40:51.:40:58.

the rules. H MRC enforces. If I worked for Google and advise them, I

:40:59.:41:02.

would say volunteer to give the information because it is not doing

:41:03.:41:09.

your company any goods will stop -- good. It is important to restore

:41:10.:41:13.

confidence of UK-based businesses that have lower revenues but pay

:41:14.:41:19.

more tax, including 20% corporation tax. We cannot content ourselves

:41:20.:41:25.

with companies appearing to decide whether or not to pay tax, as if it

:41:26.:41:31.

is discretionary. If the broader shoulders bare their share of the

:41:32.:41:36.

burden, I am afraid the government has is to raise its game. We will

:41:37.:41:42.

support the government. Our motion may not receive a majority but the

:41:43.:41:47.

problem will not go away. I look forward to next week when as a

:41:48.:41:50.

member of the Public Accounts Committee I will hear from Google

:41:51.:41:57.

and H MRC. In preparing for the debate I was keen to see facts about

:41:58.:42:02.

the government's record and turn to a study published by the Oxford

:42:03.:42:08.

centre for business taxation, probably the most academically

:42:09.:42:11.

reputable institution in the area of corporation tax. The report

:42:12.:42:15.

published last year identifies 42 separate measures the government has

:42:16.:42:21.

taken since 2010 to clamp down on corporation tax avoidance. Which are

:42:22.:42:26.

forecast to raise 34 billion. I welcome the measures the financial

:42:27.:42:32.

Secretary and colleagues have taken, which include to be diverted profits

:42:33.:42:39.

tax and anti-abuse rules. They have increased corporation tax is, a

:42:40.:42:49.

loophole that was exploited by some hedge funds is. The government

:42:50.:42:55.

record in this area I think is one that bears scrutiny and indeed

:42:56.:42:57.

Richard Murphy who describes himself as the father of Corbynomics 's

:42:58.:43:03.

declared himself pleased and surprised at the progress made since

:43:04.:43:08.

2010, which includes the initiative the UK Government has been strongly

:43:09.:43:15.

pushing. I noted the Shadow Chancellor did not repeat a claim he

:43:16.:43:20.

has made in the past about ?93 billion of what he called corporate

:43:21.:43:24.

welfare, implying there is some evasion or avoidance going on.

:43:25.:43:29.

Richard Murphy yesterday said he would question whether that figure

:43:30.:43:35.

was correct for the reason it includes capital allowances,

:43:36.:43:37.

research and development, tax credits, that support companies that

:43:38.:43:46.

invest in productivity. On Google, I said that this government has

:43:47.:43:52.

collected 130 million in tax, more than the last Labour government that

:43:53.:43:56.

collective zero, and such as a welcome step. Two members who have

:43:57.:44:04.

mentioned the 3% rate, I think some honourable friends have pointed out

:44:05.:44:09.

such analysis ignores the fact Google's staff headcount and

:44:10.:44:13.

intellectual property reside disproportionately in the US and

:44:14.:44:18.

were we to adopt that approach, UK companies, particularly in music and

:44:19.:44:22.

pharmacy industries, would suffer greatly. That is not to say there is

:44:23.:44:30.

not more that can be done. I would suggest we look carefully at the way

:44:31.:44:35.

transfer pricing rules are applied. There was a case where Starbucks

:44:36.:44:41.

Levy at a 6% brand feed from an offshore jurisdiction into the UK

:44:42.:44:46.

that almost extinguished their you -- their UK profits. I would ask the

:44:47.:44:53.

financial Secretary to give guidance to H MRC on that topic but I support

:44:54.:44:57.

the government initiatives and hope they go further. I am grateful for

:44:58.:45:04.

the opportunity to speak in this debate. I want to say someone who

:45:05.:45:09.

represents a constituency with thousands of which feed into the

:45:10.:45:16.

supply chain, I am proud of the role my constituency and country plays in

:45:17.:45:24.

leading industries. I want this country to be a place to set up

:45:25.:45:31.

business. This is about fairness and transparency. To follow one

:45:32.:45:35.

immediately from the speech, the fact the minister could not tell us

:45:36.:45:42.

what the effective tax rate Google will be paying. I can tell him for

:45:43.:45:47.

businesses in my constituency, what rate of corporation tax they will

:45:48.:45:52.

pay, how difficult is it for Google to be clear and transparent about

:45:53.:45:56.

the rate they are paying? The statutory rate of 20% applies to

:45:57.:46:02.

everybody. There are businesses that have a lower effective rate,

:46:03.:46:07.

entirely legally, in accordance with the spirit of the law because for

:46:08.:46:11.

example they make use of capital allowances, they might have losses

:46:12.:46:17.

they make use of. Someone having a rate below the statutory rate does

:46:18.:46:20.

not mean they are conducting avoidance. Many tax experts

:46:21.:46:26.

estimated Google pay an effective tax rate of 3% and if that is not

:46:27.:46:31.

the case we need to see the numbers that give us that assurance. We do

:46:32.:46:37.

not doubt the difficulties in a globalised world where intellectual

:46:38.:46:41.

property and the growth of internet companies makes this more important

:46:42.:46:45.

in the debate about tax. They are difficult issues to grasp. There is

:46:46.:46:50.

no hint of fairness or transparency about this deal and that is what we

:46:51.:46:56.

seek with this debate. I think we would have more confidence with

:46:57.:47:00.

consistent messaging from Google and the government. In January, the

:47:01.:47:08.

Treasury Twitter accounts, it claims the Google tax bill for the years

:47:09.:47:17.

2005-11, almost all under Labour, and yet the accounts period to 2015

:47:18.:47:23.

reported a liability of 130 million in respect of additional taxes, due

:47:24.:47:29.

for prior accounting periods and the current accounting period. The

:47:30.:47:33.

minister said there is no sweetheart deal. How can he give that assurance

:47:34.:47:39.

if he has not seen the deal? The Chancellor said it was a major

:47:40.:47:42.

success, how could the Chancellor Lord this as a major success if he

:47:43.:47:47.

is not close enough to the deal? If it is a success, why did the Prime

:47:48.:47:51.

Minister run so far away from that claim? And why in recent weeks, the

:47:52.:47:58.

financial Secretary has not once stood by the Chancellor and said

:47:59.:48:02.

this deal is a major success, because he knows it is nothing of

:48:03.:48:10.

the sort. He accuses us of attacking HMRC staff. HMRC have a

:48:11.:48:15.

responsibility to apply tax law and go for the full rate of tax due. But

:48:16.:48:22.

as pointed out, they have not always applied that and I am sure in the

:48:23.:48:27.

work for the Treasury committee, the committee is doing, and the Public

:48:28.:48:31.

Accounts Committee, I am sure we will find the issue at H MRC is

:48:32.:48:36.

about resourcing and expertise and whether you have the people and

:48:37.:48:42.

capacity to pursue not just current claims and outstanding tax, but the

:48:43.:48:48.

historic backlog. What concerns me also is that Google have made rather

:48:49.:48:54.

odd claims about this. On one hand we see senior executives writing to

:48:55.:48:58.

newspapers about how great the deal is and how they stood by their

:48:59.:49:04.

obligation, yet they make the commitment to pay more tax in the

:49:05.:49:09.

future. Is it they are paying the tax liability they argue, or have

:49:10.:49:13.

they somehow got away with it and plan to pay more in the future? Do

:49:14.:49:20.

they see tax is a form of charity to the state and see to top up the

:49:21.:49:25.

cough is more in the future? There is inconsistency in messaging from

:49:26.:49:28.

government and Google. We should look at comments by the Mayor of

:49:29.:49:33.

London who suggested finance directors have a duty to minimise

:49:34.:49:38.

tax exposure. That cannot possibly be the case. If the Mayor of London

:49:39.:49:42.

looked at the duties under the companies act, he would see they

:49:43.:49:46.

have to make reference to the consequences of decisions in the

:49:47.:49:53.

long-term. And of course the impact of company's operations on the

:49:54.:49:57.

community and environment. There is a problem with the ethos of the

:49:58.:50:02.

party opposite, and many of them see tax as a form of theft, whereas we

:50:03.:50:12.

see it as civic duty. I want businesses in my constituency to pay

:50:13.:50:16.

their fair share and they do. It is not unreasonable to expect a

:50:17.:50:19.

multinational company to do the same and the government needs to do more

:50:20.:50:24.

to make sure there is transparency for all companies in all

:50:25.:50:31.

jurisdictions in which they operate. I must draw members attention to the

:50:32.:50:43.

register of interests. If one I'm involved this company makes a

:50:44.:50:46.

profit, it will pave the correct rate of corporation tax. This is a

:50:47.:50:58.

global problem. Many years ago in the 60s, one was asked about the

:50:59.:51:01.

consequences of the French Revolution. He said it was too early

:51:02.:51:08.

to tell. The same issue with globalisation. These are global

:51:09.:51:18.

problems. In the USA, the effective rate of corporation tax is halved in

:51:19.:51:25.

the last 60 years. Apple are sat with ?120 billion of acid of sure

:51:26.:51:28.

they do not want to repatriate because they will have to pay tax.

:51:29.:51:33.

The opposition sound like a failed football manager turned TV pundit,

:51:34.:51:38.

who lost all their games without scoring a goal, and now criticise

:51:39.:51:42.

the new manager for not winning by a big enough margin. Of course, nobody

:51:43.:51:55.

on this side would countenance the avoidance of tax. The thin

:51:56.:52:02.

justification is this is for shareholders. Only this week James

:52:03.:52:08.

Anderson, shareholder of Google, said Google should pay the effective

:52:09.:52:14.

rate of corporation tax. Absolutely right. Warren Buffett has gone on

:52:15.:52:19.

record that company should pay the going rate of corporation tax. We

:52:20.:52:25.

need to look at where advisers stand on this. My experience in my

:52:26.:52:30.

business, when these things have come across our desk and rejected,

:52:31.:52:34.

they came from tax advisers. We need to make sure that the likes of Ernst

:52:35.:52:40.

Young, these people are responsible for much of this

:52:41.:52:46.

activity, and I do wonder whether they have government contracts,

:52:47.:52:49.

public sector contracts, and whether that kind of organisation should be

:52:50.:52:53.

allowed access to public contracts on the basis of those activities.

:52:54.:52:58.

My honourable friend for Mid Worcestershire talks about, if we

:52:59.:53:04.

were the parents of Google, what would we be saying? They talk about

:53:05.:53:10.

values, but you cannot talk about integrity and not pay your fair

:53:11.:53:15.

share of taxes. I do wonder whether we should be giving the companies

:53:16.:53:21.

that do pay taxes greater prominence, greater recognition, do

:53:22.:53:24.

some kind of kitemark for fare-paying. But we must rely on the

:53:25.:53:31.

integrity of the individual companies to pay their taxes, where

:53:32.:53:34.

they have built their businesses on the backs of British people. I am

:53:35.:53:41.

very pleased to have the opportunity to take part in this extremely

:53:42.:53:45.

important debate. Clearly, a number of things have gone wrong in what

:53:46.:53:50.

has happened with Google, but I want to focus on just one particular

:53:51.:53:53.

point, which is the treatment in our tax system of intellectual property.

:53:54.:53:59.

I think this is an extremely important area, a growing part of

:54:00.:54:04.

the economy, and we need to get it right. I'd like to draw a

:54:05.:54:08.

distinction between two extremes. On the one hand, a large pharmaceutical

:54:09.:54:12.

company that does a lot of our industry, employs a lot of people to

:54:13.:54:17.

make a new drug. On the other hand, a company like Starbucks, which

:54:18.:54:22.

registers its name in Luxembourg, which it looks very much as though

:54:23.:54:27.

it is doing purely for a tax avoidance device. Obviously, there

:54:28.:54:31.

is a continuum and, in the case of Google, they are somewhere in the

:54:32.:54:35.

middle, because they have done some mathematics to make some algorithms

:54:36.:54:39.

but they also have a brand which is extremely powerful. I think we need

:54:40.:54:43.

to tighten up on this. What happened at the moment is that a name is

:54:44.:54:49.

registered in a low tax domain. That separate company charges a fee to

:54:50.:54:56.

this country, where the work is being done, and that wipes out the

:54:57.:55:02.

entire tax treatment. That is obviously ridiculous. One thing that

:55:03.:55:05.

is wrong is that the company seems to be able to make this price

:55:06.:55:11.

itself. The revenue is not really auditing it and saying, is this

:55:12.:55:16.

reasonable? Obviously maintaining a brand does involve costs, but small

:55:17.:55:21.

costs, maybe repainting some signs, training your marketing people. Not

:55:22.:55:35.

big costs, like proper RNs D. -- R A lot of the cost could be in

:55:36.:55:42.

intellectual property and it isn't necessarily as cheap as a lick of

:55:43.:55:49.

paint. I was trying to distinguish between real intellectual property

:55:50.:55:53.

and intellectual property which is purely branding. Let's take the

:55:54.:55:58.

example of the BBC, which sells television programmes. The BBC can

:55:59.:56:02.

get more money for its television programmes then a small television

:56:03.:56:07.

production company, partly because it is called the BBC. Even though

:56:08.:56:11.

the actual costs of making the television programme will be the

:56:12.:56:16.

same. The question we have to ask is whether, because of the high value

:56:17.:56:22.

of the brand, they should pay less tax. And I submit to the Minister

:56:23.:56:26.

that that is a fundamental mistake, because the brand is an asset. What

:56:27.:56:34.

the company is getting in that situation is economic rent. Because

:56:35.:56:38.

they have got a valuable asset, that is not a reason for paying less tax.

:56:39.:56:42.

Indeed, it is somewhat absurd. If you invest in a piece of machinery

:56:43.:56:47.

and you make a claim against your allowance, over time, the amount you

:56:48.:56:54.

can claim against tax, it decreases as you move from the point at which

:56:55.:56:58.

the investment has been made. In this case, in the case of the brands

:56:59.:57:02.

being the asset, what is happening is that they are claiming more over

:57:03.:57:06.

time as they are selling more. I think this is an area where we could

:57:07.:57:11.

very usefully tighten up. If I could just say, I think perhaps this area

:57:12.:57:17.

of tax would be better handled if we had a fume or economists looking at

:57:18.:57:24.

the underlying economics of it and fewer accountants, who seem very

:57:25.:57:28.

comfortable with where the system is but not driven by the desire that

:57:29.:57:31.

the rest of us had to make sure these people pay their fair share.

:57:32.:57:37.

Let me first declare that this morning I was elected as chair of

:57:38.:57:44.

the PCS parliamentary group. Following the Shadow Chancellor, who

:57:45.:57:49.

will be a hard act to follow, I will be referring to HMRC staff. Such is

:57:50.:57:55.

the widespread scepticism and lack of public confidence that this deal

:57:56.:57:59.

has transpired that there is now a new meaning in the streets of the

:58:00.:58:06.

UK" to Google it". No longer does it mean logging onto a computer and

:58:07.:58:11.

reaching a search engine. To Google it means something else. I'm -- when

:58:12.:58:16.

members of the public grabbed their self-assessment forms, they will be

:58:17.:58:21.

asking themselves, do I need to Google it? The government minister,

:58:22.:58:27.

I think, had four opportunities and for tests to address that widespread

:58:28.:58:34.

scepticism. It is about the messages that are sent. First, there was row

:58:35.:58:40.

-- there was no real answer on what methodology was used to make the

:58:41.:58:45.

calculation. More worryingly, he praised HMRC staff on the one hand

:58:46.:58:50.

but didn't address the issue of why there are 120 compulsory

:58:51.:58:54.

redundancies being issued to HMRC staff on the 28th of January, and no

:58:55.:59:00.

explanation as to why the chief executive of HMRC has refused to

:59:01.:59:04.

meet the public and commercial services trade union to try and help

:59:05.:59:09.

mitigate those job losses. That is a message, I think, that will be sent

:59:10.:59:16.

to companies, who will wonder why HMRC offices are closing in towns,

:59:17.:59:21.

many towns in which they are the largest employer, seeing staff

:59:22.:59:26.

reductions, they will wonder if the UK Government is serious about

:59:27.:59:29.

dealing with tax avoidance and evasion. Would my honourable friend

:59:30.:59:36.

agree with me that taxes are the price that we pay for a civilised

:59:37.:59:40.

society and these multinational companies should be paying their

:59:41.:59:44.

taxes willingly? I do agree with that. Usually in debates, we hear

:59:45.:59:51.

government members praise the self appointed tax payers allowance. It

:59:52.:59:54.

is interesting today that the taxpayers allowance -- Alliance

:59:55.:59:59.

haven't been mentioned, but I agree that it is the price to pay for a

:00:00.:00:02.

civilised society. There was nothing from the minister about financial

:00:03.:00:08.

transactions taxes. I am a supporter of them, particularly a global one,

:00:09.:00:17.

which would bring in ?250 billion to national governments. Surely the UK

:00:18.:00:21.

Government could take a lead on introducing a financial transaction

:00:22.:00:26.

tax? There was no mention that Madrid there was no mention in the

:00:27.:00:31.

government 's remarks on the tax havens which honourable members have

:00:32.:00:35.

raised, including the UK overseas territories. For example, the Cayman

:00:36.:00:46.

Islands. Research by the tax Justice network rates the Cayman Islands as

:00:47.:00:49.

the second most significant tax haven in the world. Of 267 banks

:00:50.:00:55.

registered there, only 19 were licensed to operate domestically.

:00:56.:01:02.

The rest were shovelling money from country to country. The Cayman

:01:03.:01:08.

Islands is a population of 56,000 but there are 100,000 registered

:01:09.:01:12.

companies. As President Obama has said, in relation to -- it is the

:01:13.:01:24.

biggest tax scam on record. I believe it to be the latter. Where

:01:25.:01:29.

is the action to tackle this? There was no mention from the government

:01:30.:01:32.

to do that. As the tax Justice network says, the UK and its

:01:33.:01:37.

dependent territories remain by far the most important part of the

:01:38.:01:42.

global offshore system of tax havens and secrecy in jurisdiction. The

:01:43.:01:48.

fact is that the widespread scepticism and lack of confidence

:01:49.:01:52.

from the public mean that they have no confidence in the government's

:01:53.:01:57.

handling of this affair and in dealing with tax avoidance and

:01:58.:02:00.

evasion. That is why I will be supporting the motion today. Can I

:02:01.:02:07.

first of all apologise to the Shadow Chancellor. I missed the live fast

:02:08.:02:12.

-- be first 60 seconds or so of his speech. It has been suggested that

:02:13.:02:17.

we are criticising BT manager for not winning by a big enough margin.

:02:18.:02:23.

If it was such an important victory, why is the team manager refusing all

:02:24.:02:28.

interviews, instead sending the reverse -- the reserve team

:02:29.:02:34.

goalkeeper? Not to do interviews but talk about anything and everything

:02:35.:02:38.

else. The government have tabled an amendment four times as long as the

:02:39.:02:42.

motion. It doesn't mention Google anywhere. It doesn't mention the

:02:43.:02:48.

?130 million victory anywhere. A strange victory indeed if the

:02:49.:02:53.

government are trying to hide it under the biggest, deepest, darkest

:02:54.:02:56.

bushel they can find. It is to the shame of this government that

:02:57.:03:01.

something which brings this parliament into ridicule and

:03:02.:03:04.

disrepute that every time members on this side of the house from

:03:05.:03:08.

opposition parties have asked for a justification of this deal, every

:03:09.:03:12.

minister has answered by batting it across to the Labour benches, as if

:03:13.:03:16.

it were the most expensive ping-pong ball in the history of sport. I

:03:17.:03:21.

commend the Shadow Chancellor for being prepared to acknowledge that

:03:22.:03:24.

the actions of the previous Labour government would stand up too much

:03:25.:03:28.

scrutiny. I think the downfall we have seen for Labour started when

:03:29.:03:34.

they got far too cosy with the big, anonymous multinational

:03:35.:03:37.

institutions. I suspect a few people on the Labour benches today with

:03:38.:03:41.

hindsight would accept that. If all the government can say to defend

:03:42.:03:44.

their actions is to say that the previous government were even worse,

:03:45.:03:48.

the message that sends out to the people of these islands is that both

:03:49.:03:53.

governments are indefensible. A government that tries to defend the

:03:54.:03:57.

indefensible by saying somebody else is more indefensible really is not

:03:58.:04:03.

delivering much for the people. If we are to believe the selective

:04:04.:04:05.

information Google have put out about our productive their 2300

:04:06.:04:15.

employees have been, each of us would have to deliver less than 25p

:04:16.:04:20.

value added per year for each of our constituents. I doubt if any of us

:04:21.:04:24.

would fancy the next election if that was all we were delivering. It

:04:25.:04:29.

is not credible for a major, successful multinational business to

:04:30.:04:31.

suggest it is employing so many people to deliver so little profit

:04:32.:04:38.

for shareholders. This is not just about the technicalities of what is

:04:39.:04:43.

very complex legislation. This is about this Parliament building HMRC

:04:44.:04:46.

and Google to account and allowing the public to hold us to account,

:04:47.:04:52.

because it is clear that the messages coming from the majority of

:04:53.:04:55.

the people represented in this chamber that this Google deal stinks

:04:56.:05:01.

and it cannot possibly be justified. It is interested that the government

:05:02.:05:08.

are not even attempting to do so. The subject of tax avoidance and

:05:09.:05:13.

evasion is of real relevance to my constituents in Saint Helen 's

:05:14.:05:17.

south, for whom paying tax is not negotiable, unlike, it seems, for

:05:18.:05:23.

large corporations such as Google. The rationale for public service

:05:24.:05:26.

cuts based on the notion that we cannot afford as a country to pay

:05:27.:05:31.

for public services in the way that we have done, that we cannot afford

:05:32.:05:35.

to meet the basic needs of our citizens because of the debt facing

:05:36.:05:38.

the country. It is important to note that this government has now been in

:05:39.:05:42.

office nearly six years, during which time the Chancellor and Prime

:05:43.:05:46.

Minister have been able to take action on this action -- on this

:05:47.:05:51.

issue. The limited progress the government has made is welcome, but

:05:52.:05:55.

the Google deal flies in the face of it. Attempted to blame the previous

:05:56.:05:58.

Labour government every time their record is questioned is wearing very

:05:59.:06:03.

thin, even with their own supporters. Issues of taxation and

:06:04.:06:09.

who pays what are more pertinent when the political choices of the

:06:10.:06:14.

Conservatives are meaning that jobs are being lost, services closed and

:06:15.:06:18.

people suffering as a result. The cuts agenda that the government has

:06:19.:06:23.

embarked upon over the past 69 months as it my constituents

:06:24.:06:27.

extremely hard. The cumulative cuts to my local council took office at

:06:28.:06:39.

up to a staggering ?168 million. ?94 million came from Knowsley's budget,

:06:40.:06:44.

the highest of any council in the country, despite having some of the

:06:45.:06:50.

highest levels of deprivation and suffering from the most income

:06:51.:06:54.

deprivation. This has meant unavoidable savage cuts to services,

:06:55.:06:57.

which are clear to everyone in my constituency. However, the detail of

:06:58.:07:05.

why Google are paying only ?130 million is still shrouded in

:07:06.:07:09.

secrecy. This is about a choice as to who pays what. Currently, the

:07:10.:07:14.

government have made it very clear who has no option to pay and for

:07:15.:07:20.

whom it is negotiable. Local government is meant to self finance.

:07:21.:07:26.

It is meant to generate more business, activity to get tax. Who

:07:27.:07:32.

is paying while Google are not? Many small businesses in my constituency

:07:33.:07:38.

pay their tax. They have no choice. The nature of the business means

:07:39.:07:42.

that they cannot physically moved premises, like small businesses.

:07:43.:07:46.

They have no option but to relocate their profits... If the Chancellor

:07:47.:07:52.

wishes for local authorities to generate more of their own finances

:07:53.:07:57.

for themselves and rely less on central government, how can he

:07:58.:08:01.

justify that businesses which make a large contribution to local

:08:02.:08:04.

economies and pay their taxes locally are effectively subsidising

:08:05.:08:06.

multinationals? May I start by thanking all the

:08:07.:08:18.

honourable and right honourable members who have made excellent

:08:19.:08:23.

contributions today, including the right honourable member for Barking

:08:24.:08:27.

who said the government have lost the argument on transparency, but

:08:28.:08:30.

other members who raised important issues about how we now seem to have

:08:31.:08:36.

one tax rules for large multinationals and another for small

:08:37.:08:41.

businesses. The use of tax havens, the issue of transfer pricing, also

:08:42.:08:45.

the issue about how the Tories cannot claim that they have

:08:46.:08:51.

continued the progress of labour on this issue. I would like to pay

:08:52.:08:56.

tribute to the work of those who have campaigned for tax Justice,

:08:57.:09:01.

including Richard Murphy, Christian Aid and others, and the co-operative

:09:02.:09:05.

movement to their campaign for a fair tax mark. The Google tax

:09:06.:09:13.

settlement issue has shocked us all. The Chancellor cut a lonely figure

:09:14.:09:18.

when he tweeted the tax deal was a victory. The tweet had scarcely had

:09:19.:09:25.

a chance for a re-tweet before Downing Street distanced itself, and

:09:26.:09:30.

MPs on all sides called the deal derisory. Questions came about how

:09:31.:09:34.

we could have reached a settlement that implied a 3% effective tax

:09:35.:09:40.

rate. It was the moment as modern journalist wrote, that Google lost

:09:41.:09:45.

the argument in a court of public opinion. There is a not to admire

:09:46.:09:51.

about Google. Millions rely on access to information that the

:09:52.:09:56.

Google search engine puts at our fingertips. Innovative products

:09:57.:10:00.

pushing at the frontier of the digital age have transformed our

:10:01.:10:05.

lives. What we cannot tolerate is that this global business is not

:10:06.:10:08.

playing fair when it comes to tax. We know for a fact that Google has

:10:09.:10:15.

been short-changing us for more than a decade. Whatever else it has done,

:10:16.:10:21.

this settlement proves that facts. And now the deal has left a series

:10:22.:10:27.

of questions in its wake. First, do we know if Google is paying their

:10:28.:10:32.

fair share as they tell us? We don't know because the deal is shrouded in

:10:33.:10:37.

secrecy. There is a lot to suggest they are not. Just this week we

:10:38.:10:43.

heard its parent company Alphabet is the world's most valuable company

:10:44.:10:49.

with a valuation of $568 billion. In four years Google paid their

:10:50.:10:56.

chairman a total of ?166 million, more than Google paid in UK taxes

:10:57.:11:02.

for ten years. We support success, but this is an issue of fairness.

:11:03.:11:06.

Many are now asking a second question. After his tweet, can we

:11:07.:11:13.

trust the judgment of the Chancellor on this issue? Can we trust the

:11:14.:11:19.

judgment of a man who describes a 3% effective tax rate for the world's

:11:20.:11:27.

most valuable company as a victory? In 2014 alone, Google UK made an

:11:28.:11:32.

estimated ?1 billion profit. 20% tax on this would have been ?200

:11:33.:11:38.

million. Enough for 4000 police officers. Fairness in the tax system

:11:39.:11:43.

is in Houghton for us all. This is not a victim three zone. When global

:11:44.:11:50.

companies like Google do not pay their fair share, businesses and

:11:51.:11:55.

families in the UK take a hit. All of us will have heard from

:11:56.:11:59.

businesses in our constituencies. Wondering why there is one rule for

:12:00.:12:03.

multinationals and one rule for them. British families lose out.

:12:04.:12:10.

Uncollected taxes mean revenue is foregone, with bigger cuts to public

:12:11.:12:14.

services, lower levels of investment at a time when we needed the most.

:12:15.:12:19.

There is another reason for questioning the Chancellor's

:12:20.:12:23.

judgment. How can people trust the judgment of a man who thinks it is

:12:24.:12:32.

right to undermine -- and tomorrow lies his tax collecting agency? Why

:12:33.:12:41.

has this inquiry setup under the Labour government back in 2009 taken

:12:42.:12:49.

over six years? Nobody knows, seemingly not even the Chancellor.

:12:50.:12:53.

If ever there was a lack of political will, this is it.

:12:54.:12:59.

People'strust in the Chancellor and the tax system has been undermined

:13:00.:13:07.

further by two reports. The Chancellor, and different Tory

:13:08.:13:09.

ministers, had talks with Google bosses over the last two years, but

:13:10.:13:14.

did any raise the issue of tax structures with them? May be the

:13:15.:13:19.

minister can let us know today. There is a growing sense of huge

:13:20.:13:24.

injustice, that people feel when large multinationals are able to

:13:25.:13:28.

shift profits so easily and avoid taxes they should pay. And now we

:13:29.:13:35.

find out that last year, Tory MEPs were instructed on six occasions,

:13:36.:13:41.

six different occasions, to vote against proposals that would clamp

:13:42.:13:48.

down on multinationals that engage in aggressive tax avoidance, and in

:13:49.:13:50.

addition they have voted repeatedly against measures to tackle tax

:13:51.:13:55.

evasion. The Chancellor even failed to apply his Google tax to Google.

:13:56.:14:03.

Perhaps he can answer the question as to whether the diverted profits

:14:04.:14:07.

tax would have applied if a deal had not been beach? Things need to

:14:08.:14:12.

change and we believe the Chancellor has a duty to take steps to restore

:14:13.:14:18.

public confidence in how H Emwazi operating cases like this -- HMRC.

:14:19.:14:24.

He must address concerns about the lack of transparency surrounding the

:14:25.:14:30.

deal, show how it was reached though it can be scrutinised by Parliament

:14:31.:14:33.

and the public. You can understand how HMRC accepted Google UK's claim

:14:34.:14:42.

that they are a company with 2000 UK employees do not have a permanent

:14:43.:14:47.

establishment in the country for corporation tax purposes. Since last

:14:48.:14:52.

week, we have seen this deal unravelled. Every step of the way it

:14:53.:14:56.

has shown the Chancellor's failure of judgment. It is not the first

:14:57.:15:01.

time we see the Chancellor failing to stand up for people in Britain.

:15:02.:15:07.

He is hurting and not helping British businesses and families. We

:15:08.:15:12.

need a renewed focus, and action on tax avoidance and evasion will stop

:15:13.:15:17.

and a real plan now to close the UK tax gap. It is what Britain deserves

:15:18.:15:23.

and what the British people expect, a plan that puts transparency and

:15:24.:15:30.

fairness first. A plan that works to see us reach international agreement

:15:31.:15:34.

on country by country reporting and drive forward its implementation.

:15:35.:15:38.

This deal and how it came about cannot be allowed to be a precedent.

:15:39.:15:44.

If the Chancellor will not act, labour stands ready and I urge all

:15:45.:15:48.

in this House to vote with us in the lobby today. ?153 billion is the

:15:49.:15:59.

size of the budget deficit inherited from the party opposite, equivalent

:16:00.:16:04.

to almost ?6,000 for every household in the country. When you inherited

:16:05.:16:08.

deficit like that, one of the first things you go after is the money

:16:09.:16:13.

supposed to be coming in that isn't. As my honourable friend set out at

:16:14.:16:16.

the start of the debate, no government has done more than this

:16:17.:16:21.

one to crack down on tax evasion and tax avoidance. This crackdown led by

:16:22.:16:31.

my right honourable friend the Prime Minister and Chancellor has meant

:16:32.:16:33.

over 40 changes to tax law, closing loopholes that Labour left in place,

:16:34.:16:37.

among them the diverted profits tax to stop multinationals who shift UK

:16:38.:16:41.

profits to other countries, this policy will bring an extra ?1.3

:16:42.:16:45.

billion by the end of the Parliament. Some directly and more

:16:46.:16:53.

importantly, due to its deterrent behavioural impact. I believe this

:16:54.:16:57.

is a record the government can be proud of, but more needs to be done

:16:58.:17:02.

and we are doing it. Tax avoidance is a global problem that calls for

:17:03.:17:07.

global solutions. Corporation tax is not a tax on sales that happen in

:17:08.:17:12.

this country, nor even a tax on profits derived from sales in this

:17:13.:17:18.

country. The system that operates internationally is that profits

:17:19.:17:20.

should be allocated based on the economic activity in each country.

:17:21.:17:27.

Economic activity is not just about sales, it is about RND, where the

:17:28.:17:32.

various production takes place in so one. This was a simple formula to

:17:33.:17:38.

work out in the 1920s when the world tax system came into being, as the

:17:39.:17:44.

honourable gentleman reminded us in his entertaining style. Since then

:17:45.:17:49.

there has been a move from manufacturers to services, from the

:17:50.:17:53.

tangible to intangible, from the mechanical and edible to the

:17:54.:17:57.

digital. The government has embarked on a programme to tighten the rules.

:17:58.:18:03.

We have acted to prevent companies taking advantage of ambiguities and

:18:04.:18:07.

internationally we are working to plug gaps and address loopholes. The

:18:08.:18:14.

Institute for Fiscal Studies said there is literally nothing anyone

:18:15.:18:19.

national government can do unilaterally about those loopholes.

:18:20.:18:23.

That is why we work with international partners. We lead the

:18:24.:18:26.

debate on updating the international tax rules by initiating the G20 OECD

:18:27.:18:34.

base erosion and profit shifting project under our G8 presidency. We

:18:35.:18:37.

were the first country to take action to implement that

:18:38.:18:43.

recommendation to help us better align the location of taxable

:18:44.:18:47.

profits with the location of economic activity. As part of the

:18:48.:18:52.

implementation, the UK signed an agreement with 30 tax

:18:53.:18:56.

administrations to share country by country reports from next year. Now

:18:57.:19:01.

we want agreement so information can be made public, as spelt out in the

:19:02.:19:06.

manifesto, and we will continue to lead multinational unilateral

:19:07.:19:12.

debates in this area. We know that to drive productivity, carry on

:19:13.:19:18.

creating jobs, we need competitive taxes. We are clear those taxes must

:19:19.:19:26.

be paid. In 2009-10, the tax gap, the difference between tax

:19:27.:19:30.

liabilities and tax collected, was 7.3% on last year it fell to 6.4%.

:19:31.:19:37.

In the last parliament HMRC secured more than ?100 billion in compliance

:19:38.:19:42.

revenues. At the spending review, the Chancellor approved an

:19:43.:19:46.

additional ?800 million of funding for HMRC to recover an additional

:19:47.:19:57.

7.2 billion. HMRC investigates tax impartially. No organisation gets

:19:58.:20:00.

preferential treatment because of their size or income. Let me remind

:20:01.:20:06.

honourable members, including the member for Barking, that during the

:20:07.:20:09.

tenure government of the Labour Party, this House of Commons rear --

:20:10.:20:16.

reaffirmed a principle of confidentiality through the act in

:20:17.:20:24.

2005, the principle of taxpayer confidentiality that means that HMRC

:20:25.:20:29.

cannot publish details of a settlement. Confidentiality is a

:20:30.:20:34.

fundamental principle of every major economy's tax system. There is no

:20:35.:20:41.

ministerial involvement. The honourable member asked how you can

:20:42.:20:44.

know there is no sweetheart deal. HMRC publishes litigation and its

:20:45.:20:53.

strategy online which means it cannot settle for anything less than

:20:54.:20:56.

full tax, interest and penalties payable. My time is short but I want

:20:57.:21:02.

to respond to a couple of points made. The honourable member for

:21:03.:21:06.

Glasgow South West, we had a debate on the HMRC office estates. The plan

:21:07.:21:15.

is to concentrate expertise into regional centres that makes

:21:16.:21:20.

interaction between the areas of expertise straightforward. It

:21:21.:21:22.

improves career opportunities for many. Large business staff numbers

:21:23.:21:28.

are not going down, they are going up in line with the increasing

:21:29.:21:38.

investment. To the member for Wythenshawe, I think it is right we

:21:39.:21:42.

give extra support to countries that need it and in 2015 - 16, a tax team

:21:43.:21:50.

was established to support a number of countries. We have had excellent

:21:51.:22:05.

speeches from among others Norwich, Spelthorne, and we were reminded of

:22:06.:22:09.

the last Governor's record. I feared their current plans are worse. They

:22:10.:22:13.

claim they want to make businesses pay more tax in the UK but their

:22:14.:22:20.

policies would drive companies away from this country. We have learned

:22:21.:22:26.

they do not just want to put up taxes on business but increased

:22:27.:22:30.

taxes on working people also. To achieve long-term growth we need

:22:31.:22:34.

competitive taxes but our message is clear, if you operate in the UK, you

:22:35.:22:38.

pay tax in the UK and whoever you are the same UK law applies. We will

:22:39.:22:44.

continue to strengthen the door, close loopholes and investing HMRC

:22:45.:22:48.

capacity through extra funding and powers and we will lead the world in

:22:49.:22:54.

the fight against international tax avoidance, to ensure the UK is

:22:55.:23:01.

internationally competitive, but has a fair tax regime. I urge members to

:23:02.:23:04.

support the amendment and reject this motion.

:23:05.:23:08.

The question is that the original word spent part of the question. As

:23:09.:23:14.

many rows of that opinion, say iron. Of the country, no macro.

:23:15.:24:07.

The question is that the original words stand part of the question.

:24:08.:24:15.

Tellers for the ayes, Vicky subscript and sue Heymann. Tellers

:24:16.:24:18.

will be nose, Jackie Price and Simon Kirby.

:24:19.:31:26.

The ayes to the right, 271. The noes to the left, 299.

:31:27.:35:57.

The ayes to be right, 271. The noes to the left, 299. The noes have it.

:35:58.:36:12.

Unlock. The question is that the proposed words be there added. As

:36:13.:36:15.

many are of that opinion, say aye. To the contrary, no. Division. Clear

:36:16.:36:20.

the lobby. And the question is the proposed

:36:21.:38:32.

words be added. Say aye, of the country no. -- of the contrary.

:38:33.:44:23.

The ayes to the right, 303. The noes to the left, 261. The ayes to the

:44:24.:47:58.

right, 303. The noes to the left, 261. The ayes habit, the ayes have

:47:59.:48:04.

it. I declare the question as amended to be agreed -- have it. We

:48:05.:48:09.

now come to the motion in the name of the Leader of the Opposition on

:48:10.:48:14.

public finances in Scotland. I informed the house that the Speaker

:48:15.:48:17.

has selected the amendment in the name of the leader of the Scottish

:48:18.:48:23.

National Party, and before I call the shadow minister to move, may I

:48:24.:48:27.

remind the house there are a lot of speakers and very little time. There

:48:28.:48:32.

will be a three-minute limit on backbenchers in the main debate. We

:48:33.:48:36.

may not be able to get everybody in. With that in mind, if the

:48:37.:48:41.

frontbenchers could make their contributions like the points, the

:48:42.:48:42.

house would be very grateful. I am sorry you do not want an

:48:43.:48:49.

oratorical flourish. It is a pleasure to open today's

:48:50.:49:13.

opposition day debate for the opposition and at its core it is a

:49:14.:49:16.

debate about the transfer of new powers to Scotland under the

:49:17.:49:20.

Scotland Bill Burt completed its passage last November and is in the

:49:21.:49:25.

other place. It is worth reflecting on the Scotland Bill, to put the

:49:26.:49:31.

debate about the finances in context. It has its genesis in the

:49:32.:49:37.

Smith Commission, the recommendations agreed by all major

:49:38.:49:41.

Scottish parties and went past it will transform the Scottish

:49:42.:49:46.

Parliament to one of the most powerful devolved parliaments. It

:49:47.:49:55.

will have control of attack, which generated ?11 billion in revenues.

:49:56.:50:02.

It will have the power to vary, decrease or increase those revenues.

:50:03.:50:12.

The Scottish Parliament controls 10p in the pound. Kezia Dugdale

:50:13.:50:17.

announced yesterday that faced with a choice of using the powers of the

:50:18.:50:24.

Scottish Parliament, we have chosen to use these powers, setting at 11p

:50:25.:50:34.

rather than 10p, to invest in that future for Scotland and indeed to

:50:35.:50:39.

protect the low-paid. The revenue raising powers are accompanied by

:50:40.:50:43.

new spending powers such as control over ?2.5 billion of welfare. The

:50:44.:50:49.

Scottish Parliament will top up -- be able to top up existing UK

:50:50.:50:55.

benefits. Thanks to amendments it would have total autonomy to create

:50:56.:51:00.

new benefits in devolved areas. When enacted the Scottish Parliament will

:51:01.:51:03.

be able to make different choices to create a better Scotland. I am happy

:51:04.:51:09.

to give way. Could he tell the House who in his party speaks for England

:51:10.:51:14.

to make sure the settlement would be fair to England as well as Scotland?

:51:15.:51:17.

The settlement house to be fair to England as well as the rest of the

:51:18.:51:24.

United Kingdom, including England. I will come onto that later. We hear

:51:25.:51:33.

of cheers in the Scottish Parliament as the Finance Minister tried to

:51:34.:51:38.

justify expenditure cuts in public expenditure, cuts backed by the

:51:39.:51:42.

Tories. Is this final proof the socialist credentials the SNP try to

:51:43.:51:48.

claim have no foundation? I am grateful to my honourable friend for

:51:49.:51:53.

that intervention. What we have seen in Scotland is a Scottish Labour

:51:54.:51:57.

Party determine to use the current powers of the Scottish Parliament to

:51:58.:52:01.

do something different from conservative austerity and the

:52:02.:52:05.

result is a Scottish Finance Minister and Scottish Government

:52:06.:52:08.

just managing that conservative austerity. When left with a choice

:52:09.:52:13.

of either managing the Tory austerities or creating a different

:52:14.:52:15.

future of the Scotland we have chosen to create that different

:52:16.:52:24.

future. I was just explaining the principles behind the Scotland Bill,

:52:25.:52:29.

but before it can be enacted, they must be underpinned by a new fiscal

:52:30.:52:33.

framework, and this is running alongside the legislative process of

:52:34.:52:36.

the Bill which is different from what happened in 2012 with the

:52:37.:52:41.

Scotland Act. The Smith Commission stipulated the Barnett formula would

:52:42.:52:44.

be retained as a mechanism for determining the block grant. That is

:52:45.:52:50.

not in question in this debate. The block grant will need to be adjusted

:52:51.:52:56.

to reflect new tax-raising powers and expenditure responsibilities

:52:57.:52:58.

being devolved and that is the heart of the debate today.

:52:59.:53:12.

Subtitles will resume on 'Wednesday In Parliament' at 2300.

:53:13.:53:20.

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