19/04/2016 House of Commons


19/04/2016

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that as a price worth paying which is a respectable argument but not

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one I agree with. We must now move on. Statement the Secretary of State

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for Foreign and Commonwealth Office. Secretary Philip Hammond. With

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permission I would like to update the House on the current situation

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in Libya and what the Government is doing to support the new Libyan

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Government of National accord. Yesterday I visited Tripoli, the

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first time that a British Foreign Secretary has done so since 2011.

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The fact that this visit was able to take places positive sign of the

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progress that has been made in recent weeks including the security

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situation in and around the capital. During my visit I met Prime Minister

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Suraj Randiv manages -- members of the privacy counsel in the naval

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base which has become the headquarters of the GNA. I welcomed

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their commitment to represent all the Libyan people and the progress

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that they have made in establishing the Government of national accord as

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a Government of the whole of Libya. I underline the UK is a balk at the

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GNA as the only legitimate Government of Libya. It has the

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endorsement of the Libyan political dialogue and the majority of members

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of the House of Representatives. I believe the Libyan people want it to

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succeed. We look forward to the House of Representatives completing

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its formal vote of endorsement in line with its obligations under the

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Libyan political agreement. I was encouraged to hear from the Prime

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Minister and his ministers about the steps they are taking to assume

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control of Government ministries in Tripoli. After five years of

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conflict following the overthrow of Gaddafi, the Libyan people are wary

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of fighting and eager for peace. They want a Government which will

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start to address the many challenges Libya faces. It is important that

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the international community works in partnership with the GNA as they

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continue to consolidate their position and take forward their work

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to meet the needs of Libyan citizens across the country. In my meetings I

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emphasised the need to keep the momentum on the political process

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and to deliver practical progress on the ground. I was encouraged to hear

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that a clear plan is being developed to address some of the immediate

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challenges delivering security, tackling Di macro and restoring

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public services, countering people trafficking and restarting the

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economy. We agreed that delivering security is fundamental to improving

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the day-to-day lives of the Libyan people and creating an environment

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that economic reactivation. The security agenda must be owned and

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led by the GNA. The UK, along with other European nations, stands ready

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to respond to requests from the Libyan Government for assistance in

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training the Libyan Armed Forces to improve their effectiveness in

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providing security and in the fight against Di macro. We agreed that we

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should continue to work closely to establish what those training and

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technical support requirements are and what if any role the

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international community can play in helping to meet them. A number of

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honourable and right Honourable members have speculated in recent

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days that the Government might be on the cusp of committing British

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troops to Libya in a combat or combat support role. I am pleased to

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have the obscenity to clarify the situation. I am clear that there is

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no appetite in Libya for foreign combat troops on the ground. We do

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not anticipate any requests from the GNA the ground combat forces to take

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on Daesh or any armed groups and we have no plans to deploy troops in

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such a role. I will keep the House informed of any plans we develop in

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the future in response to requests from the Libyan Government. The type

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of mission that we currently envisage would be focused on

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providing training and technical support away from any front-line

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operations. The Libyan economy is suffering from the effects of years

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of conflict and the impact of lower oil prices. It is clear that the

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presidency council is focused on the immediate need to alleviate the

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pressure is on ordinary Libyans including those arising from the

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current squeeze on liquidity in the banking system, the shortfall in

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power generation and the shortage of basic commodities. As well as the

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longer term challenges of ensuring the effective functioning of the key

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state financial institutions, the central bank of Libya, the national

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oil comp oration and Libyan investment authority. Also the

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challenge of rebuilding oil production and export capacity. As I

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said the President, the UK stands ready to provide whatever assistance

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it came with these issues, all of them areas where British companies

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have relevant experience and expertise to share. Turning to the

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migration of threat, there is clearly an urgent need to tackle the

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challenges arising from a regular migration and the criminal networks

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that facilitates much of it. I highlighted our desire to work in

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close partnership with the GNA to make progress on this issue

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including on tackling the people smugglers and traffickers. As part

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of this initiative we should look at creating a package of support that

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could include extending the EU's current naval operation and building

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the capacity of the Libyan coast guard to support and eventually take

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over that operation. Clearly such a package would only be implemented at

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the invitation of the Libyan Government. Mr Speaker, guest today

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I announced Britain would be allocating ?10 million for technical

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support to be GNA in this financial year to be delivered through the

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conflict security and stability fund. This package will support

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strengthening political participation, economic development

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and the delivery of capacity in security, justice and defence. We

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will work closely with the GNA to ensure that this support is

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channelled to the areas where it can have most effect. After years of

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conflict in Libya, the formation of the Government of national accord

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and its arrival in Tripoli have the potential to be a real turning point

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in Libya's fortunes. The challenges facing the GNA should not be

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underestimated and delivering the security and economic development

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that will allow the Libyan people to realise their country's huge

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potential will not be an easy task to fulfil. Big UK, together with

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many of our international partners, stands ready to assist. It is in all

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our interests that the Prime Minister and his Government are able

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to re-establish security and reactivate the economy and defeat

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Leave in Libya as quickly as possible. I commend this statement

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to the House. Can I begin by thanking the Foreign Secretary for

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advanced sight of his statement. The situation in Libya has been

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bloody and dangerous. And it is important to recall that it was

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Colonel Gaddafi's brutal response to the protests that eresulted early in

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-- erupted in 2011 that triggered a civil war and UN Security Council

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resolution that authorised a no-fly zone. This house voted to support

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that action, but since Gaddafi's fall Libya has become awash with

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rival militias, the presence of Daesh and insecurity and questions

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have been raised about the government and the international

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community's focus on what followed. I join the Foreign Secretary in

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praising the efforts by Libyan politicians, the UN, and special

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representative Martin Cop ra to reconcile the competing institutions

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and encourage them to follow a single Government and support the UN

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solution recognising the progress and calling on member states to

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provide support to the new government. On this side, we welcome

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the establishment of the Libyan Government of national accord. As

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the Foreign Secretary said, it faces a formidable task in restoring

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public services, building up the economy and tackling Daesh. Does the

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Foreign Secretary agree its ability to do so will be determined by the

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extent to which the new government is able to gain support and consent

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right across Libya, as it faces the task of re-establishing government

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and governance in all parts of country? Can the Foreign Secretary

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set out what assessment he has made of its capacity to do so, particular

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in respect of the rival militias. Can he say more about the

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conversations he is having with our allies about what steps can be taken

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and does he expect there to be a further UN Security Council

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resolution? The Government has indicated that it was not

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contemplating a British combat Nish in Libya. -- mission in Libya. Given

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the circumstances there, I think this is the right approach to take

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and I'm grateful to the honourable gentleman for confirming again today

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that the Government has no plans to deploy British troops in such a

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role. Can the Foreign Secretary therefore give the House a

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categorical assurance that were this view to change, any proposal to

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deploy forces would come before this House for a vote? He has however

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spoken about possibly providing training for the Libyan military,

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did the Prime Minister ask for specific types of support? Does he

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envisage any such deployment would take place in Libya or might it

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involve providing training in a neighbouring country? Will he give

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the House an undertaken he will come to the House before any such

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deployment takes place and seek approval as appropriate? On economic

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development, we support all efforts to assist the new government in

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eme-- improving the lives of people and getting the economy moving

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again. On migration is further support being requested by the new

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Prime Minister, or is it being considered through the EU naval

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force to enhance Libya's ability to disrupt criminal human smuggling and

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people trafficking? The people of Libya have suffered a great deal and

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this moment is important for their future. It is the responsibility of

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the world community to do all that it can to help the new government to

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succeed. May I thank the honourable gentleman for his response and in

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particular let me join with him, it is remiss of me, should have said in

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praising the UN Special Envoy. He has been shuttling between the

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groups in Libya and it is due to his energy and his effort that we have

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got where we are today. This is a Government of national unity, but we

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should be clear about the historical context of Libya. It is a country

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that traditionally has had a very high degree of devolution in its

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Government, held together often by a strong man at the centre. We need to

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find a new model, where Government of National Accord is going to be a

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national umbrella organisation, but the Prime Minister made clear this

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will only work if municipalities are empowered and are prepared to take

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on a significant degree of devolution. A devolved model is the

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only model that will work in Syria. And I think I need to make sure

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clear that the Government is at an early stage of its operation. The

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Prime Minister and his ministers are sitting in a naval base, physically

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separated from the civil servants who could support them. Yesterday

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they retook control of three ministries. It will only be as they

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are able to re-enter the ministries and regain working contact with the

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civil servants that they can start to do some of the detailed work and

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I think that... Underpins and shapes the answers to some of the questions

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that I will now give him. He is right, of course the GNA can only

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succeed with the support and concept of the factions in Libya. Let me say

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one thing, when I went to Tripoli, I was expecting to find the Government

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in a heavily fortified base. Defending all Kommers. That is not

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the situation. The base is lightly defended and it was clear that the

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Prime Minister's ability to operate there is based on the consent of the

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militias operating in that part of the capital. So I think he is

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conscious of the need to build a bottom up consensus around his

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activities. He asked me about the European Union, there was, I

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returned from Tripoli to Luxembourg, where there was a discussion at 28

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about future support to Libya, including defence minister

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colleagues and looking at the possibility of extending operation

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Sophia. No decisions were taken, but this is very high on the the

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European Union's agenda. The key will be to develop a package that

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addresses Libyan priorities. The Libyans are focussed on migration,

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but it is not their top priority I have to say. We have to create an

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environment where delivering on Europe's top priorities also

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addresses the Libyan people's top priorities. He asked about a UN

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security resolution I don't see and haven't heard anything suggest there

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is a need for a further resolution. I think the next moves at the UN

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will be the granting of exemptions to the arms embargo and the

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unfreezing of assets to allow the Government to function properly. The

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house will of course be consulted were the Government to decide at any

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point that it wanted to insert ground forces or any forces in a

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combat role into Libya. We do not envisage that happening in the

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current sishs. He asked about the situation where a training

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deployment is contemplated and if I quote the honourable gentleman he

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asked, if we would seek the House's approval for a training deployment.

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I should be clear about this, it is not a question of approval, it is a

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question of consulting the House and allowing the House to express an

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opinion through a vote. Which the history over the last three years

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has shown clearly the Government will take great notice of. But this

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would not be the case in the event of a training deployment. We have

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training deployments around the world. In fact my MoD colleagues

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informed we we have 16 per Nantes training -- permanent training

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deployment. It is not appropriate that the House is consulted on such

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deployment as if it were a combat deployment. Did the Prime Minister

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ask for training support? Not explicitly, but he did intd Kate as

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the -- indicate as the Government develops it may ask the

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international community for some support. I gained the personal

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impression that his instinct is very much at the lighter end of the

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scale. He does not want to be seen to be dependent on foreign support.

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He wants to do as much as possible internally, using Libyan

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capabilities and of course if there is any question of training, we

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would want to look at the options for training outside Libya as well

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as the permissiveness of the situation to allow training inside

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Libya. I think I have covered all the honourable gentleman's

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questions. Can I welcome the Foreign Secretary's statement and last

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night's European council conclusions. The sanctioning of the

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speaker of the the House of Representatives is welcome as he has

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been an obstacle to formation of GNA. As it welcomed the commitment

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that the E. And I assume the British contribution bill the co-ordinated

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with other support. A coherent British contribution will be easier

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with the consent and understanding of this House. It might need to

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include air strikes on Daesh targets and the training mission he alluded

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to. He is on thin ground in differentiating between a training

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mission and a combat zone and not seeking to carry the House. I notice

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the language he used talks about being away from the front line of

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operations. I wonder if there is anything more he can say about that?

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I urge him to try to continue to carry this House with him. I am

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grateful to my honourable friend. He is right that any kind of

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international support will be more effective if it is properly

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co-ordinated and the work of the mission and the planning cell that

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is in operation should be and will be co-ordinated together. Let me be

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clear, any proposal to carry out air strikes in support of a counter

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Daesh operation would trigger the convention that the Government would

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come to the House, consult the House, and allow a vote by which the

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House could express its view on the the proposed intervention. I

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understand his concern, he has expressed it several times in this

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House and in newspapers, that the, in a context of a situation like

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Libya, the lines between what is a combat mission and a training

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mission could be blurred. We are clear that we can make that

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distinction. I would draw his attention to Afghanistan, a kin

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nettic theatre, but we have a training mission there which has

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been successfully conducted for the last 15 months with great effect.

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And in Iraq, where we carry out training activities in what is an

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active war zone. There is a big difference between training and

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advising troops and getting engaged in combat activities and the

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Government is mindful of that distinction and of the obligations

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it has entered into in respect of consulting the House. Can I add my

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praise to the work of Martin Cobbler and the British ambassador to Libya,

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who has been making the best of a difficult job. Libya has been an

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unmitigated disaster for this government, where we have a sitting

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president criticising a sitting UK Prime Minister and a humanitarian

:21:29.:21:36.

side where a UN official described UK efforts as paltry bone-throwing.

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We do not have a good record on Libya. Can I ask these questions

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after the questions asked by the member for Leeds central and the

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chair of the committee, can he tell us how much of the mission does he

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envisage taking place on Libyan soil. In terms of a training

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mission, will any deployment of UK troops to Libyan soil be brought

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here and how does he distinguish between a training mission in Libya

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take bg place now, giving you can only have meetings in the naval base

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and finally does he commend the US president's candour that this has

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been his worse mistake and will he tell the House what does he think

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the Prime Minister's worst foreign policy mistake has been? Well it is

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easy to sit there hurling stones. The world is not a neat and tidy

:22:33.:22:38.

place and we have to deal with the situations that present themselves

:22:39.:22:42.

and he talks about humanitarian, I would remind him that when we

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intervened in 2011, it was to prevent an imminent genocide in

:22:49.:22:54.

Benghazi. That was a successful intervention that saved thousands of

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lives. And Libya is a rich country, we shouldn't forget that, there are

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70 billion dollars worth of Libyan assets frozen by UN security consill

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resolution. So this is about getting the Government in place and then

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releasing those assets so that the Government can function. Libya is

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not a country that needs humanitarian asis tans in the

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convention sense, but it needs technical support and help to get

:23:24.:23:26.

into a position where we can release its own assets to it, to enable it

:23:27.:23:29.

to function. He mention the British bass tab. He

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came with me to Tripoli and it is his desire and mine as well that we

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reopen the British Embassy in Tripoli just as soon as we are able

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to do so. -- he mentioned the British ambassador. I cannot promise

:23:56.:24:03.

that it would be eminent works -- but we will keep it under constant

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review and do it as soon as we can. He asks me whether any training

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mission to Libya would take place on Libyan soil. Yet again there is no

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training mission, there is no putative training mission. There has

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been no request for a training mission. Clearly if there is a

:24:20.:24:29.

request for such a mission, there -- the military will want to make sure

:24:30.:24:34.

it is undertaken with the minimum risk it possible to UK personnel.

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Their first preference would be to do it here and then next preference

:24:39.:24:41.

would be to do it somewhere else in the region and the third preference

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will be to do it in Libya if it is safe to do so. I can assure him that

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we will spare no effort in trying to ensure that any support we do give

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the Libyans would be delivered in a way that represents the least

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possible risk to the British forces delivering support. There can be no

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doubt that I intervention in Libya in 2011 are some in this house

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suggested has been an unmitigated disaster resulting in many thousands

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of casualties. It is a vicious civil war. Looking forward, given that

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this country is at a tipping point in his involvement in Libya, what

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lessons can we learn? The honourable gentleman asserts a fact that there

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can be no doubt which is deeply contentious. The situation in Libya

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is very difficult. The situation post 2011 was very messy. Countries

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in many parts of the world do not function like Britain or Switzerland

:25:53.:25:57.

and we have to deal with the real situation on the ground. I think we

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should look to the future and be positive about this potentially

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affluent country regaining stability and being able once again to

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function as an effective state, allowing the Libyan people to get on

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with their business. There is a weariness after five years and there

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is a growing sense that if a properly devolved form of Government

:26:22.:26:27.

can be established, that the various militias and regional groupings can

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work. Can I ask the Foreign Secretary what assessment is made up

:26:35.:26:40.

the size of the Daesh Libya and what their capability is? Are they going

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to sit tight or expand into the rest of Libya? I think our current

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assessment is that there are probably up to about 3000 Daesh

:26:54.:26:58.

fighters in Libya of whom are significant number would be foreign

:26:59.:27:04.

fighters. There is a generally accepted view that what Daesh are

:27:05.:27:11.

doing a Libya is a holding operation seeking to hold an area of ground

:27:12.:27:16.

possibly as a bolt hole if they find that their freedom of manoeuvre and

:27:17.:27:22.

freedom to operate is coming under intolerable pressure in Syria. I

:27:23.:27:26.

think there are many pointers to the facts that now is the time to move

:27:27.:27:32.

against them in Libya while they are still relatively thin on the ground

:27:33.:27:37.

and a their operation is in a holding phase. One of the measures

:27:38.:27:43.

of success of the Libyan Government will be the creation of a

:27:44.:27:49.

functioning economy and as a step towards that a functioning central

:27:50.:27:53.

bank. Is there any role that Britain can play in helping them achieve

:27:54.:28:01.

this? I offered the Prime Minister technical support in relation to the

:28:02.:28:06.

central bank, the national oil company and the Libyan investment

:28:07.:28:11.

authority. It is a tribute to Libyan resilience and ingenuity that

:28:12.:28:15.

international partners recognise the figures that have continued to run

:28:16.:28:19.

these institutions through this period of chaos over the last few

:28:20.:28:25.

years as technically competent and well motivated. They have been doing

:28:26.:28:30.

a good job. What the Prime Minister has now done is brought the

:28:31.:28:36.

competing appointees the eastern and western chairman of each of these

:28:37.:28:41.

institutions together to work together and to seek to forge a

:28:42.:28:44.

consensus around how the institutions can go forward as truly

:28:45.:28:49.

national is Jewish and is on a collaborative basis. I was

:28:50.:28:55.

interested in what the Foreign Secretary had to say about the

:28:56.:28:59.

current state of Daesh and the need that they need to be contained now.

:29:00.:29:05.

We're talking to other allies such as Jordan to work on training

:29:06.:29:10.

deployments and training up troops because if we don't contain Daesh

:29:11.:29:14.

now in North Africa it will be an expanding problem? We are talking to

:29:15.:29:23.

other partners like Jordan about how we can provide support to the Libyan

:29:24.:29:30.

Government. There are other actors who are acting independently. Egypt

:29:31.:29:38.

has a recognised vital interest because it has a long land border

:29:39.:29:43.

with Libya and some of the problems that Egypt has been facing in the

:29:44.:29:48.

Western desert are attributable to penetration from Libya. The House

:29:49.:29:53.

will recall that there is they continuing issue of general -- of

:29:54.:29:59.

the general, the commander of the Libyan RB who is an important figure

:30:00.:30:02.

in command significant military forces in the East but is

:30:03.:30:09.

unacceptable as a command figure to many who are supporting the new

:30:10.:30:13.

Government. That is one of the big challenges the Prime Minister is

:30:14.:30:18.

facing. I welcome the Foreign Secretary's statement and in

:30:19.:30:21.

particular the reassurances about the use of British troops in

:30:22.:30:29.

training and mentoring if that becomes necessary. Does he recall

:30:30.:30:33.

the disaster that was the training of Libyans in the UK and will he

:30:34.:30:41.

assure the House that those mistakes have been noted and if you does

:30:42.:30:47.

intend to train Libyans in the UK, that we will not make those mistakes

:30:48.:30:54.

again? We are not the only ones who had a poor experience with seeking

:30:55.:31:01.

to train Libyans outside Libya. The Italians, the Bulgarians also had

:31:02.:31:05.

similar experiences. The Prime Minister referred to this yesterday

:31:06.:31:08.

and is conscious of what was not a very glorious episode in living

:31:09.:31:16.

history. The situation on the ground has changed but we would look the

:31:17.:31:21.

most effective location for any training that was done. It is

:31:22.:31:25.

probably the case that it would not be in the UK. For climatic reasons

:31:26.:31:31.

as much as anything else we need to train people in an environment as

:31:32.:31:34.

close as possible to the environment in which they will be operating.

:31:35.:31:39.

There has been no request and there is as yet no plan. I can't impart to

:31:40.:31:49.

the House any more information. Camera welcome the progress made but

:31:50.:31:54.

say that I am disappointed that more has not been offered to deal with

:31:55.:31:59.

the migration crisis. There has been an 80% increase in crossings between

:32:00.:32:03.

Libya and Italy. This time last year half a million people were waiting

:32:04.:32:12.

in Libya to get to Italy and the EU is offering Turkey 3 billion euros

:32:13.:32:16.

to deal with the migration crisis and offering Libya nothing. What we

:32:17.:32:23.

need is permission to enter Libyan coastal waters in order to stop the

:32:24.:32:27.

people traffickers. Did he ask that permission and when can we have that

:32:28.:32:31.

permission so we can deal with people traffic and in a robust way?

:32:32.:32:40.

Can I say that he is approaching this in exactly the wrong way. Going

:32:41.:32:47.

to Libya as a bunch of Europeans and saying here is our priority agenda,

:32:48.:32:51.

what are you going to do about delivering it? It is not likely to

:32:52.:32:56.

get the buy in that we need. What I suggested is that we have to package

:32:57.:33:03.

the objectives that we want to achieve with objectives that our

:33:04.:33:09.

priorities -- that our priorities with the Libyans. It allows

:33:10.:33:19.

foreigners to operate in Libya's waters and the only way they could

:33:20.:33:23.

sell it to the Libyan people. We have to be acutely sensitive to the

:33:24.:33:29.

concerns in Libya about foreigners. I am in a stress position. I have

:33:30.:33:34.

one bunch of people who are primarily concerned to make sure we

:33:35.:33:38.

don't have any foreigners going in to Libya and the honourable

:33:39.:33:42.

gentleman desperately keen to get some foreign naval forces into their

:33:43.:33:46.

territorial waters. We have to balance this very carefully and get

:33:47.:33:49.

a package which works for the Libyans as well as for the European

:33:50.:33:56.

agenda. The Foreign Secretary and the Shadow Foreign Secretary is

:33:57.:34:01.

speaking in eloquent terms about the Prime Minister, a Government of

:34:02.:34:05.

National Accord and even the House of Representatives. Any member of

:34:06.:34:08.

the British public watching the news yesterday would have seen our

:34:09.:34:12.

Foreign Secretary and the Prime Minister of National Accord holed up

:34:13.:34:16.

in a naval base unable to leave it because there -- because they

:34:17.:34:23.

control arm of the country. Can we have a reality check. Can the

:34:24.:34:29.

Government at last realised that its bid to undermine authoritarian

:34:30.:34:32.

leaders such as Saddam Hussein Gaddafi who had a deal with the

:34:33.:34:37.

Italian Government to return migrants has involved the region in

:34:38.:34:41.

death and destruction? Can we learn the lessons and try and find a

:34:42.:34:44.

strongman and do what the chairman of the home affairs committee once

:34:45.:34:48.

and while we all want is to find some way of creating some kind of

:34:49.:34:51.

safe haven for migrants to be returned? The Chinese have a saying

:34:52.:34:57.

that the journey of 1000 miles starts with a single step and I urge

:34:58.:35:01.

my honourable friend to view this process in that context stop

:35:02.:35:05.

self-evidently I did manage to get out of the naval base in Tripoli

:35:06.:35:12.

yesterday and return to these shores. He is being a little harsh

:35:13.:35:16.

on Prime Minister on the Prime Minister and what he has achieved.

:35:17.:35:21.

There is a process going on whereby militias which only a couple of

:35:22.:35:25.

weeks ago worth threatening to shoot down any aircraft seeking to enter

:35:26.:35:30.

the airport in Tripoli bringing his Government back into the city, who

:35:31.:35:34.

are now patrolling the streets outside that naval base who are

:35:35.:35:39.

present on the ground when I landed in Tripoli yesterday. They have

:35:40.:35:44.

recognised and they have given a tentative consent to this Government

:35:45.:35:48.

process to go forward and its success will depend on prime depth

:35:49.:35:52.

-- on the Prime Minister making the right judgments and being patient

:35:53.:35:55.

enough to bring all the relevant parties with him as he develops a

:35:56.:36:06.

plan for his Government. I thank the Foreign Secretary for advanced copy

:36:07.:36:10.

of his statement. Given the failure of the last Labour Administration is

:36:11.:36:19.

to secure adequate compensation for Libya supplied Semtex for victims in

:36:20.:36:26.

Scotland, England and Northern Ireland, at the same time America

:36:27.:36:30.

was able to get that compensation, won the Foreign Secretary now

:36:31.:36:33.

indicates that he will redeem the situation and place on the agenda

:36:34.:36:39.

for the GNA and for the Prime Minister that compensation will now

:36:40.:36:42.

be a key issue that this Government will now pursue with the new

:36:43.:36:49.

administration? I can confirm to the honourable gentleman that it is

:36:50.:36:53.

already on the agenda. The Prime Minister is aware of our focus on

:36:54.:36:59.

this issue but it is a question of timing. The Government hasn't got

:37:00.:37:04.

access to the great majority of its ministries or its civil servants and

:37:05.:37:08.

hasn't got access to its assets. It would be premature to be making that

:37:09.:37:15.

the number one issue. The Government is focused on the need to raise and

:37:16.:37:20.

resolve these issues at the right point in this progression and the

:37:21.:37:25.

Prime Minister is notified that we will do so. I think it has been a

:37:26.:37:33.

thoughtful exchange between the Foreign Secretary and his shadow.

:37:34.:37:38.

There are figures of optimism but a lot of sombre atmosphere about this,

:37:39.:37:42.

not least because there is other members that have pointed out we

:37:43.:37:45.

have responsibility for what has happened in Libya.

:37:46.:37:50.

May I say this, I think he has dealt with this issue of technical or

:37:51.:37:58.

other expertise skilfully, I think what the British public would be

:37:59.:38:04.

reluctant to be for any sense of our expertise would be going to help one

:38:05.:38:10.

side or other on what could be a bloody civil war. While I think

:38:11.:38:15.

there are difficult things and there are often no good guys, there must

:38:16.:38:20.

be an appreciation that would be something that would cause angst to

:38:21.:38:24.

public if we are to have a functioning Libya in the years

:38:25.:38:35.

ahead. I'm grateful to my honourable friend, and if only it were as

:38:36.:38:40.

simple as if there were two sides. There are 120 sides. We have to make

:38:41.:38:46.

sure the support is behind Government of National Accord. We

:38:47.:38:48.

have to look for bright spots and one of the positive things is that

:38:49.:38:54.

by and large the different fangses are not motor -- factions are not

:38:55.:38:58.

motivated by ideology as they are in some of the other conflict zones, in

:38:59.:39:04.

particular not motivated by extreme religious ideology. A lot is

:39:05.:39:08.

traditional money and power interests. It is people wanting to

:39:09.:39:14.

protect their local fiefdoms, make sure they get their share of the

:39:15.:39:23.

wealth of state. I think Prime Minister Sarrage is going about this

:39:24.:39:26.

in the right way, going with the grain of Libyan society, and trying

:39:27.:39:33.

to build a consensus around it. What guarantees can he offer that our key

:39:34.:39:39.

partners, particularly in Europe have a coherent strategy on good

:39:40.:39:44.

governance and nation building, as well as migration and terrorism, and

:39:45.:39:50.

what assurances did he get from the the GNA that they have a plan to

:39:51.:39:55.

broaden out this deal so it is not beholden and vulnerable to the rival

:39:56.:40:01.

regional armed factions? Well the most effective step to broaden out

:40:02.:40:07.

the legitimacy of the government will be the vote in the HOR. The HOR

:40:08.:40:16.

is committed by the Libyan political accord, the Libyan political

:40:17.:40:19.

agreement to do that and we hope that will happen soon. On the

:40:20.:40:25.

question of our European partners, look, it is true that amng the other

:40:26.:40:37.

26 states migration is at the top of the agenda and it falls to me to

:40:38.:40:41.

urge them, as I urged the chairman of the select committee that, if we

:40:42.:40:45.

want to make progress on this, we are going to have to try and set

:40:46.:40:48.

this in a context that the makes sense to the Libyans, not just that

:40:49.:40:56.

makes sense to us. I welcome the progress the Foreign Secretary has

:40:57.:41:01.

outlined and appreciate his point about the practical realities on the

:41:02.:41:05.

ground. With that in mind, the long-term prospects for Libya are

:41:06.:41:08.

linked to its economic prospects, which are linked to its oil

:41:09.:41:17.

industry. What steps are UK TI and the British Government taking to

:41:18.:41:24.

ensure that UK industry can play its part? Well, my honourable friend is

:41:25.:41:31.

right, of course Libya has Africa's largest oil and gas reserves and a

:41:32.:41:37.

population of only 6 million. So this is in per capita terms a

:41:38.:41:42.

potentially wealthy country. British companies have played an important

:41:43.:41:47.

role in Libya's oil and gas industry and Prime Minister Sarrage made the

:41:48.:41:52.

point yesterday that BP would be very welcome back in the country. I

:41:53.:41:56.

shall pass that on to BP's management. The Foreign Secretary

:41:57.:42:05.

said that there is no appetite in Libya for foreign combat troops on

:42:06.:42:13.

the ground. Is there any appetite in the Libyan political system for

:42:14.:42:19.

foreign air forces, or foreign naval forces operating in Libyan

:42:20.:42:23.

territorial waters? I think we have seen on the latter point, we have

:42:24.:42:31.

seen already a clear wariness of any suggestion of foreign naval forces

:42:32.:42:36.

operating in Libyan waters, even if the focus is counter migration,

:42:37.:42:40.

rather than counter Daesh. I can't rule out and it would be wrong to

:42:41.:42:47.

rule out any future request for air or naval support to a counter Daesh

:42:48.:42:54.

operation. I can envisage the Prime Minister Sarrage if his Government

:42:55.:42:58.

is successful, being able to muster enough grouped forces to mount --

:42:59.:43:04.

ground forces to mount an attack on the Daesh stronghold around Sirte.

:43:05.:43:09.

Sirte is a coastal port and the Libyans will not be able to develop

:43:10.:43:13.

naval or air assets in any reasonable period of time to support

:43:14.:43:17.

such an operation and it is possible that from a military point of view

:43:18.:43:25.

they would seek assistance. Prime Minister Sarrage would have to

:43:26.:43:28.

balance that military imperative with the political issues that would

:43:29.:43:33.

arise if he were to request foreign assistance. There has been no such

:43:34.:43:37.

request, no discussion of such a request, but if it comes, we will

:43:38.:43:42.

consider it and if we think the UK should take part in such action we

:43:43.:43:46.

will come to the House and allow the House to express an opinion through

:43:47.:43:54.

a vote. A further 21 members are trying to catch my eye. Brevity will

:43:55.:44:03.

assist. I thank my right honourable friend for his statement and I know

:44:04.:44:09.

I may be a lone voice, but I would urge him against Parliamentary

:44:10.:44:14.

approval for every military intervention we take. Can I ask the

:44:15.:44:20.

Foreign Secretary about a strategy to specifically target Daesh,

:44:21.:44:25.

separate, but complimentary to the peace strategy. If we wait for the

:44:26.:44:30.

perfect political settlement, we will wait forever. Well I take my

:44:31.:44:36.

honourable friend's warning on the use of war powers with the

:44:37.:44:41.

importance that it deserves and my my right honourable friend the

:44:42.:44:45.

Defence Secretary published a statement setting out the

:44:46.:44:48.

Government's position. We must maintain the operational flexibility

:44:49.:44:52.

that we need while ensuring that the House of Commons has a proper

:44:53.:44:59.

involvement in any proposed combat deployment. The honourable gentleman

:45:00.:45:06.

asked me, sorry what did he ask me? Daesh. Look, before the Government

:45:07.:45:11.

Government of National Accord was formed, there was a discussion going

:45:12.:45:16.

on among the international community about how we would deal with Daesh

:45:17.:45:20.

if there was no solution on the ground in Libya. We concluded it

:45:21.:45:24.

would be pretty much impossible for us to do so. So I'm pleased that we

:45:25.:45:29.

do now have a government formed in Libya that we can support to do that

:45:30.:45:39.

job. Thank you. UK past intervention in Libya has been a disagser the,

:45:40.:45:47.

the mess we have -- disaster, this cannot happen again. Given that we

:45:48.:45:51.

are offering training and technical support to armed forces away from

:45:52.:45:55.

the front line, could the Secretary of State tell me what amped forces

:45:56.:46:00.

will it be training and supporting, given that Libya has a myriad of

:46:01.:46:06.

competing groups? Well, first, another assertion and I can tell him

:46:07.:46:11.

that it is not the view of the people I met yesterday that the

:46:12.:46:16.

intervention in 2011 was a disaster. It has rid the country of Gaddafi

:46:17.:46:24.

and averted a genocide. He talks in the present tense about training

:46:25.:46:28.

support. I should say yet again we are deliver nothing training support

:46:29.:46:35.

in Libya at the present time. And if any proposals, any request from the

:46:36.:46:40.

Libyan Government comes forward, for training, it would be for militia

:46:41.:46:45.

groups that have signed up to Government of National Accord's

:46:46.:46:50.

security plan and are being incorporated into the Libyan

:46:51.:46:52.

security forces that will be formed from them. Thank you. Like the the

:46:53.:47:04.

honourable lady for Birmingham, I was struck by the Foreign

:47:05.:47:07.

Secretary's correct comments that we need to continue to move against

:47:08.:47:13.

Daesh in Libya. What discussions have been had with gulf state

:47:14.:47:16.

nations in helping with that epest effort? We do of course have

:47:17.:47:23.

continuing discussions with all gulf states. It is well known fact that

:47:24.:47:30.

both Qatar and the UAE have been active in Libya. But it is fair to

:47:31.:47:36.

say that all gulf states have been distracted by the war in Yemen and

:47:37.:47:40.

have not played perhaps as active a role as they did earlier on in this

:47:41.:47:50.

conflict. Given the turmoil in Libya since the five years and one month

:47:51.:47:55.

since the House of Commons authorised action, does he regret

:47:56.:48:08.

having the UK aquay -- agree in the mission to become a mission focussed

:48:09.:48:18.

on regime change? Well, this was a complicated situation opt ground and

:48:19.:48:23.

-- on the ground and having embarked on the the mission to protect the

:48:24.:48:28.

population of Benghazi and having to then follow where that took us in

:48:29.:48:33.

order to protect the population from the retribution that the regime was

:48:34.:48:38.

seeking to vent upon it, we did what we had to do. I think we should be

:48:39.:48:45.

proud of having rid Libya of the tyrant Gaddafi, who had dismantled

:48:46.:48:49.

the structure of government in Libya and that is why Libya has had the

:48:50.:48:55.

problems it has had. There was no Government structure in Libya.

:48:56.:49:05.

Deploying British troops to Libya would add to the demands placed upon

:49:06.:49:10.

them. Can the Secretary of State provide any clarity on how many

:49:11.:49:13.

troops would be necessary and when we will learn from the GNA if

:49:14.:49:19.

British assistance is required. I'm afraid I can't. I can gave personal

:49:20.:49:23.

view that I would expect that we would be talking about training

:49:24.:49:27.

mission on the sort of scale that we are carrying out in other countries

:49:28.:49:31.

around the world. That is to say between tens and hundreds of

:49:32.:49:40.

trainers, not thousands of trainers. The Foreign Secretary says he must

:49:41.:49:45.

tackle Daesh, but Prime Minister Sarrage only operates with

:49:46.:49:49.

permission of the militia, does he not think in certain circumstances,

:49:50.:49:59.

some of the -- militia are a relying on other forces and they are at the

:50:00.:50:03.

heart of Government and where will that leave Libya in the future?

:50:04.:50:08.

There is a misunderstanding about what these militia are. After 2011,

:50:09.:50:15.

Libya fragmented, every city, every town, every region had its armed

:50:16.:50:19.

forces, its armed men protecting their communities. That doesn't make

:50:20.:50:26.

them bad people. They're not extreme Islamists in most cases, they're

:50:27.:50:29.

people who have formed home defence units if you like. They are the only

:50:30.:50:35.

force on the ground. It is not possible to talk about raising a new

:50:36.:50:40.

Libyan armed forces that will take on all these militias, that would be

:50:41.:50:46.

an unrealistic project. The only way forward is to coopt militias into a

:50:47.:50:52.

Libyan armed force and backed by a political system which is highly

:50:53.:50:58.

devolved and assures them of the autonomy and the fair shares of

:50:59.:51:02.

Libya's wealth for the communities that they're seeking to back.

:51:03.:51:10.

Following the point raised by the member for North Antrim about Libyan

:51:11.:51:15.

sponsored IRA murder in Northern Ireland and England, I understand

:51:16.:51:18.

the Foreign Secretary's comments about timing, but given that there

:51:19.:51:23.

is an emerging government in Libya and that we will be releasing

:51:24.:51:29.

something between 7 and 8 billion pounds of frozen assets from this

:51:30.:51:33.

country, will the Secretary of State and his ministerial team continue to

:51:34.:51:39.

do all they can to get compensation for the people who suffered for far

:51:40.:51:45.

too long? Yes, the assurance that I gave to the member for North Antrim

:51:46.:51:51.

extends to the WPC Yvonne Fletcher case. On the floor of the House last

:51:52.:52:01.

week, I urged caution, the member for beck Nam reminded the house of

:52:02.:52:06.

how missions change and the impact on our armed services who may have

:52:07.:52:11.

to make edecisions o'n't hoof. I would -- make decisions on the hoof.

:52:12.:52:18.

In relation, the question is this, we are told in this Parliament, that

:52:19.:52:23.

the North Atlantic treaty organisation is our primary model of

:52:24.:52:28.

defence, yet in this statement, all we have heard and I'm grateful to

:52:29.:52:34.

the EU naval deployment and our European partners, all we heard

:52:35.:52:40.

about was the European Union's role, if the GNA seeks a request, will the

:52:41.:52:45.

Secretary of State advise the House what role is the North Atlantic

:52:46.:52:51.

treaty organisation playing give the organisations that evolve from

:52:52.:53:02.

Jordan to Hungary. I suggest he puts this to his advisor.

:53:03.:53:11.

Nato is our war fighting alliance but we're not talking about

:53:12.:53:20.

fighting, we are talking about real welding and the European Union and

:53:21.:53:24.

bilateral arrangements delivered by other European countries is the

:53:25.:53:28.

right way to go about this. This is not a role for Nato. My right

:53:29.:53:38.

honourable friend and the whole house will recognise that a peaceful

:53:39.:53:43.

Libya is in the interests of the region and Europe. Could he talk

:53:44.:53:49.

about the envisaged timetable he sees for EU discussions to continue

:53:50.:53:55.

and then conclude working closely with the European governments to

:53:56.:54:02.

ensure a colour of -- collective response? I think it would have to

:54:03.:54:06.

be the timetable which will be determined by what is happening on

:54:07.:54:11.

the Libyan side. At the discussion as night we were clear we need to

:54:12.:54:16.

work up a European Union package. Somebody mentioned Turkey. It hasn't

:54:17.:54:19.

escaped the notice of the Libyans how the EU has dealt with Turkey on

:54:20.:54:27.

migration. There will have to be a comprehensive proposal and as soon

:54:28.:54:34.

as is appropriate to make the Libyan Government aware of what such a

:54:35.:54:38.

package might look like, the ball will be in their court to decide

:54:39.:54:43.

whether they wish to request such support. Went as the Foreign

:54:44.:54:47.

Secretary expect to receive the invitation to provide the support

:54:48.:54:51.

that he has mentioned and will he elaborates on what the specific and

:54:52.:54:56.

mutual objectives are, especially the timescales involved. Our troops

:54:57.:55:03.

cannot be involved in an open-ended support. There is a spectrum here.

:55:04.:55:10.

Hard training of troops at infantry level, we are a long way from any

:55:11.:55:14.

request to do that if it comes at all. Advise on structuring military

:55:15.:55:23.

command structures in a civilian led Ministry of Defence, it is quite

:55:24.:55:27.

likely that we will be asked quite soon if we can give advice on that.

:55:28.:55:31.

That is the advice we will probably give from Whitehall. Indeed as my

:55:32.:55:42.

role in the Nato Parliamentary Assembly, I was in Algeria last week

:55:43.:55:45.

and the parliamentarians I met have much experience of bringing a

:55:46.:55:48.

country together after the dog decade. They made it clear they

:55:49.:55:53.

would like to help the Libyan Government through diplomacy and

:55:54.:55:58.

bring together 120 different fractions to come together. They

:55:59.:56:01.

have a lot to offer in the circumstances. Gritty ensured that

:56:02.:56:07.

offers of help Thruway non-military intervention taken as far as they

:56:08.:56:11.

can be with the new Libyan Government? I will be pleased to

:56:12.:56:18.

hear the Algerians wanted to provide assistance based on their own

:56:19.:56:22.

experience of rebuilding a country after a bitter civil war and I am

:56:23.:56:28.

sure the Libyans would be pleased to receive such an offer. I trust the

:56:29.:56:33.

Algerian Parliamentary is felt privileged to meet the honourable

:56:34.:56:44.

gentleman. Come I welcome the ?10 million that you referred to. You

:56:45.:56:48.

looked at security, justice and defence. Can I ask the Minister

:56:49.:56:52.

consider that those serving in the RS -- RUC and PSNI will be part of

:56:53.:57:02.

the security that will be offered? The honourable gentleman raises a

:57:03.:57:05.

good point. There has been an assumption across the House that any

:57:06.:57:10.

training week it would be given by UK military personnel. Some of the

:57:11.:57:13.

training needed will be police training and may be the PSNI might

:57:14.:57:19.

be able to make a contribution to that. It is quite possible that some

:57:20.:57:25.

of the training will be delivered by contractors, often ex-military

:57:26.:57:29.

personnel are working for contractors rather than current

:57:30.:57:37.

serving military personnel. The main concern might constituents have that

:57:38.:57:43.

Libya is the country has the main conduit for illegal immigration from

:57:44.:57:48.

both safe and unsafe countries in Africa. If the Government of

:57:49.:57:51.

National Accord in Libya is unwilling or unable to make this a

:57:52.:57:58.

national priority and if my right honourable friend is unable or

:57:59.:58:02.

unwilling to press the case for how important this is for us, what is

:58:03.:58:08.

the EU plan to prevent this year being one of an absolutely

:58:09.:58:12.

disastrous to set of circumstances where we are about to experience a

:58:13.:58:18.

mass wave of illegal immigration, very dangerously across the

:58:19.:58:25.

Mediterranean towards Italy? Just to reassure my honourable friend, the

:58:26.:58:27.

Libyan Government does understand the importance of this issue. It

:58:28.:58:31.

understands the importance of the Libya because having an organised

:58:32.:58:38.

criminal traffic crosses border undermines Libya 's sovereignty. It

:58:39.:58:42.

understands the importance of addressing this issue for Libya's

:58:43.:58:47.

relations with the international community. The point I was making is

:58:48.:58:52.

we have got to put this agenda in the context of the many other very

:58:53.:58:58.

immediate challenges facing the Libyan people. In answer to his

:58:59.:59:02.

second, what is the EU doing in the meantime? The European naval

:59:03.:59:12.

operation in the Mediterranean is designed to intercept people seeking

:59:13.:59:18.

to migrate on an irregular basis and the European Union from Libya. The

:59:19.:59:25.

global initiative against transatlantic organised crime

:59:26.:59:29.

estimated that the illegal migrant trade is worth 255 to year. The 10

:59:30.:59:36.

million is hugely welcomed in terms of stopping this awful trade but

:59:37.:59:41.

also with the right honourable gentleman confirm it will plug that

:59:42.:59:49.

gap in Libya's economy so we commit something positive? Libya is

:59:50.:59:54.

potentially a rich country. It has significant oil and gas wealth and

:59:55.:59:59.

it has significant assets. The Government will not be lacking in

:00:00.:00:08.

cash. The ?10 million is simply a UK technical assistance fund. It will

:00:09.:00:11.

fund experts, it will fund the commissioning of studies and advice

:00:12.:00:16.

to the Libyan Government in the areas I either land. My right

:00:17.:00:22.

honourable friend will know the entire region of the South is a

:00:23.:00:28.

black hole. Would it have a good idea of what is going on but we know

:00:29.:00:33.

instability and the availability of arms has created a threat for the

:00:34.:00:38.

whole of sub Saharan and West Africa and not only from Daesh but from

:00:39.:00:43.

Boko Haram who have armed themselves from the Gaddafi arsenals. Can he

:00:44.:00:46.

update the House and what the Government is doing to tackle a

:00:47.:00:50.

threat to sub Saharan and West Africa from Libya? The Libyan

:00:51.:00:56.

Government is acutely aware of the threat to its sovereignty from the

:00:57.:00:59.

porosity of its borders to the south porosity of its borders to the south

:01:00.:01:04.

and south-west. I am speculating but that could be one of the areas where

:01:05.:01:11.

international community is asked for sex -- technical support in the

:01:12.:01:16.

future. This is a long border in on populated area ideally suited to

:01:17.:01:20.

policing by technical means rather than the by border guards on the

:01:21.:01:26.

ground. He will be reassured to know that the Prime Minister stated to me

:01:27.:01:31.

clearly yesterday that although his Government is intricately and the

:01:32.:01:37.

world is focused on Tripoli, use costs of the fact that it has to be

:01:38.:01:41.

Government for the east and south as well as a Government for the West.

:01:42.:01:47.

May I press the Foreign Secretary on the issue of where Libyan personnel

:01:48.:01:51.

might be trained in future? You will recall the unhappy saga in 2014 when

:01:52.:01:57.

some 2000 Libyan personnel were trained in Cambridgeshire. That

:01:58.:02:02.

ended badly with a series of violence, sexual assaults in my city

:02:03.:02:08.

of cabbages -- Cambridge when they were left unsupervised. Can he

:02:09.:02:11.

assure residents in Cambridge that there will be no further training of

:02:12.:02:15.

Libyan personnel in Cambridgeshire and can he upped the House -- that

:02:16.:02:25.

has now about the money owing to the authorities after that experience? I

:02:26.:02:30.

was Defence Secretary at the time and I remember the plans the

:02:31.:02:38.

training. It did not end well and the Libyans are acutely conscious of

:02:39.:02:45.

that. This would be a very different operation in very different

:02:46.:02:47.

circumstances. There are no plans yet and there is no request so I

:02:48.:02:51.

can't give the House any further information about what such a

:02:52.:02:54.

training programme might look like and where it will be conducted. I

:02:55.:02:58.

can give him the assurance that the lessons of what happened has been

:02:59.:03:04.

taken on board by the MoD and will be factored into any future plan. If

:03:05.:03:14.

spending 30 times as much on bombing Libya instead of reconstructing it,

:03:15.:03:17.

I wonder if the Foreign Secretary can tell us what is. If the 10

:03:18.:03:21.

million announced today that the conflict security fund, can you tell

:03:22.:03:26.

us how will be counted as ODA, the Nato 2% target and how much will be

:03:27.:03:34.

counted towards both? I will write to the honourable gentleman if I am

:03:35.:03:39.

wrong but I think Libya does not qualify for ODA because of the GDP

:03:40.:03:44.

per Capita of the country. If I am wrong, I will write to him and place

:03:45.:03:50.

a copy in the library. The Foreign Secretary spoke about the situation

:03:51.:03:54.

in Benghazi in the past but the situation remains extremely volatile

:03:55.:03:57.

and serious and Reuters were poisoned -- talking of extant ting

:03:58.:04:03.

-- reporting of extensive fighting. I wonder what discussions he had

:04:04.:04:07.

about the situation around Benghazi and whether he expects any requests

:04:08.:04:10.

for support to do with operations in that region of Libya? We did discuss

:04:11.:04:17.

this issue and we discussed it in the context of general -- of the

:04:18.:04:20.

general and the Libyan national army who are active in this area. This is

:04:21.:04:25.

one of the challenges the Prime Minister faces. One of the most

:04:26.:04:29.

effective military units available is under the command of the general

:04:30.:04:37.

who is a better while for those people who are supporters of the

:04:38.:04:41.

Government. The Government does have -- doesn't have an alternative and

:04:42.:04:44.

the effectiveness of the guard force and the LMA in stemming Daesh

:04:45.:04:53.

attacks is an important part of the Government's arsenal of defences. It

:04:54.:04:57.

has to get all these units under some form of effective central

:04:58.:05:09.

control. We implied -- we wanted to prevent and imminent large attacks

:05:10.:05:19.

on civilians in Benghazi. We said we were strung with US you build your

:05:20.:05:24.

country for the future. Will the secretary of state guarantee we will

:05:25.:05:28.

fulfil our promises? That is what we are doing. It has taken a

:05:29.:05:33.

regrettably long time to get the end of the campaign in 2011, the

:05:34.:05:37.

overthrow of Colonel Gaddafi to the point where the Libyan people are

:05:38.:05:42.

now seriously starting to seek to rebuild their democracy and economy.

:05:43.:05:45.

They are now looking to do so and we will be support them. The idea of

:05:46.:05:56.

Daesh being located in Libya is worrying enough in its own right.

:05:57.:06:02.

The prospect of them moving their operational headquarters from Iraq

:06:03.:06:07.

and Syria and Libya should be deeply worrying to us all and especially

:06:08.:06:11.

the Secretary of State. What discussions has he had both with his

:06:12.:06:15.

Libyan counterpart but also with those countries neighbouring Libya

:06:16.:06:20.

to stem the flow of Islamic militants into the country? I have

:06:21.:06:25.

had discussions but with the Libyans and also with the Egyptians and the

:06:26.:06:29.

Tunisians who are very concerned about this. The problem is the

:06:30.:06:36.

principal route of access into Libya for Daesh militants appears to be by

:06:37.:06:40.

sea and the Libyans are struggling to control that route at the moment

:06:41.:06:50.

with that present resources. We know from experience elsewhere that in

:06:51.:06:55.

fledgling democracy is and troubled states that are rife with armed

:06:56.:06:59.

groups that often corruption and conflict become drivers for each

:07:00.:07:06.

other. We also know that there are people who can sort through Livia.

:07:07.:07:11.

If the Foreign Secretary right to minimise the relevance of a

:07:12.:07:14.

humanitarian and civil contribution at least in the medium term? I say

:07:15.:07:22.

Libya is not a poor country. There are tens of billions of dollars of

:07:23.:07:28.

Libyan assets owned by the Libyan people available to the Libyan

:07:29.:07:32.

Government wants the UN decides to unfreeze control of those assets. I

:07:33.:07:37.

don't believe Libya needs humanitarian support in the

:07:38.:07:42.

conventional sense. What it needs is technical support to build the

:07:43.:07:44.

Government structures that will allow the UN to release its own

:07:45.:07:46.

money to it. Could the Foreign Secretary say

:07:47.:07:59.

something about the use of embedded troops in any future operation? And

:08:00.:08:04.

with the House be consulted on any British military personnel embedded

:08:05.:08:13.

in the forces of other nations? The statement that the Defence

:08:14.:08:16.

Secretary made yesterday clarified this point. Where troops or

:08:17.:08:20.

personnel are embedded in the military forces of other nations,

:08:21.:08:27.

they are treated as being part of those forces, they are not covered

:08:28.:08:33.

by the commitment we have made, to come back to the House, it would be

:08:34.:08:38.

absurd if a British pilot embedded in the US Navy, for example,

:08:39.:08:42.

retaining our carrier -based skills ahead of the commission of our own

:08:43.:08:48.

carriers in 2018, had to be the subject of a debate in the House of

:08:49.:08:51.

Commons because of a decision taken by the United States government.

:08:52.:08:58.

In answer to a question last week the Foreign Secretary's ministerial

:08:59.:09:02.

colleagues said they would facilitate a visit of UK victims of

:09:03.:09:08.

terrorism that involved Semtex, in the near future. Is there any

:09:09.:09:14.

indication or timescale as to when we can expect this visit?

:09:15.:09:20.

I do not think that the conditions would be right, right now, to

:09:21.:09:25.

facilitate such a visit. And I can't see exactly what the point of such a

:09:26.:09:30.

visit with the bat this stage. Once the government of National Accord is

:09:31.:09:34.

established, with access to its records and competent civil

:09:35.:09:37.

servants, then I am certainly prepared... And once our own

:09:38.:09:43.

ambassador is back in Tripoli, then I would be prepared to see what we

:09:44.:09:49.

could do to facilitate such a visit. Point of order, Mr Andrew Quinn.

:09:50.:09:56.

In Treasury questions earlier, a minister, inadvertently or

:09:57.:10:00.

vertically, besmirched the work of the House of Commons library. --

:10:01.:10:16.

advertently. Given that their work is usually valued by all sides of

:10:17.:10:19.

the House and the servants of this House are able to come into this

:10:20.:10:22.

chamber to defend their work, how can we put on the record that

:10:23.:10:27.

members of Parliament of all political persuasions of value and

:10:28.:10:31.

respect the work and research of the House of Commons library?

:10:32.:10:37.

I am grateful for the point of order. I would not seek to comment

:10:38.:10:40.

on the merits or otherwise of a particular report, suffice to say

:10:41.:10:48.

however, I think the House of Commons library service is held in

:10:49.:10:56.

universal esteem. I have always had the highest regard to the

:10:57.:10:59.

professionalism, the competence, the Internet, and the analytical skill

:11:00.:11:07.

of those who work in the service -- intellect. I was told, before

:11:08.:11:12.

employing researchers, first Sea and realise the benefits that the

:11:13.:11:16.

library service can bring. I was told that 19 years ago. It was true

:11:17.:11:21.

then and it is true now, I am sure nobody would suggest otherwise. If

:11:22.:11:29.

there are no more points of order we come to the ten minute rule motion.

:11:30.:11:36.

I beg to move that they should be given to bring a bill that requires

:11:37.:11:40.

the labelling of farm produce sold in the UK to include country of

:11:41.:11:44.

origin, and whether produced in accordance with designated animal

:11:45.:11:50.

welfare standards. I am asking for more transparency so that the

:11:51.:11:54.

British consumer can make a more informed decision about what they

:11:55.:11:55.

are buying. The current situation is confusing,

:11:56.:12:06.

bolted on to EU legislation, with some other offering greater clarity

:12:07.:12:11.

than others. It took a Europe-wide scandal on horse meat finding its

:12:12.:12:15.

way into our food chain to jolt the commission into action. It was a big

:12:16.:12:20.

wake-up call to the meat industry. New EU rules are already being

:12:21.:12:22.

implemented in the UK regarding country of origin labelling for

:12:23.:12:28.

unprocessed pork, lamb, and poultry meat. And I stress, unprocessed,

:12:29.:12:33.

because there's more confusion surrounding imported meat that is

:12:34.:12:36.

processed into sausages then labelled as a British product but

:12:37.:12:39.

that is a can of worms for another day. Although there are better rules

:12:40.:12:45.

on the traceability of meat product of this is not true for milk used in

:12:46.:12:49.

dairy products. Our dairy farmers are having a tough time of it and

:12:50.:12:54.

now dresses are very low. With Britain operating under current EU

:12:55.:12:59.

rules we cannot unilaterally bring in mandatory country of origin

:13:00.:13:06.

labelling -- prices are very low. So far the government has not been able

:13:07.:13:09.

to convince the commission, which is regrettable. The commission and the

:13:10.:13:13.

favours a voluntary code on dairy products and a recent EU report

:13:14.:13:17.

covering dairy indicated it felt that producing such a measure would

:13:18.:13:22.

be costly and bureaucratic. However our own farming Minister has said, I

:13:23.:13:27.

do not accept the argument that it would be too complicated to do this,

:13:28.:13:32.

it might be on some dairy product but an butter, cheese, and some

:13:33.:13:35.

staple product, you could deliver country of origin labelling

:13:36.:13:41.

relatively inexpensively. But we are not going very fast on this agenda.

:13:42.:13:46.

Doctor Judith O'Brien, Chief Executive of dairy UK said, there

:13:47.:13:51.

obvious consumer demand the clearer information on the country of origin

:13:52.:13:55.

of food product is demonstrated by existing rules on fresh meat. A

:13:56.:14:01.

mandatory labelling system would help the dairy industry showcase its

:14:02.:14:06.

product and reassure consumers on its provenance. Clear mandatory

:14:07.:14:10.

labelling is what other government wants. It is in the interest of

:14:11.:14:14.

British farmers and consumers. The UK Government has said there is

:14:15.:14:17.

great potential for significant long-term growth in the dairy sector

:14:18.:14:21.

with the global market expected to grow at over 2% per year for the

:14:22.:14:27.

next ten years. In or out of the EU British dairy farmers should have a

:14:28.:14:34.

bright future. A farm prices report said that it is unacceptable that

:14:35.:14:37.

consumers cannot buy British in confidence and could be misled as to

:14:38.:14:42.

country of origin when they are buying food in the supermarket. It

:14:43.:14:46.

is essential that labelling and produce is improved and I wholly

:14:47.:14:49.

agree. Those consumers who cared deeply about animal welfare need

:14:50.:14:56.

clearer labelling regarding animal rearing processes as well. Consumers

:14:57.:15:00.

do care about how animals in the food chain RKO for in their short

:15:01.:15:04.

lives. There are specific EU requirements and the keeping of

:15:05.:15:15.

pigs, hence. -- hens. It specifically ruled out the use of

:15:16.:15:21.

individual stalls for pregnant sows in 2013. They were banned for

:15:22.:15:30.

cruelty reasons in the UK in 1999. Specifically banned in the rest of

:15:31.:15:35.

the EU from 2013. Shockingly, more than two years on from this, six EU

:15:36.:15:41.

countries are still officially noncompliant with their own key

:15:42.:15:44.

welfare standards. This wilful noncompliance cuts cost for those

:15:45.:15:48.

farmers but the picture it misery for the animals. -- perpetuates. The

:15:49.:15:57.

consumer has a right to know if pork has been reared in band conditions.

:15:58.:16:01.

A campaign group said, the country is -- countries failing to comply

:16:02.:16:10.

France, Cyprus, Greece, Finland, and Slovenia, saying it is appalling

:16:11.:16:13.

that the EU commission fails to enforce its own band. -- ban. We

:16:14.:16:24.

need a level Langfield and production and animal welfare. --

:16:25.:16:30.

playing field. The German of the rural affairs select committee

:16:31.:16:34.

accused the European Commission prevaricating -- chairman. Giving EU

:16:35.:16:43.

farm is an unfair flouting of the ban on sow stalls. 60% of our pork

:16:44.:16:51.

is imported, undercutting our own farmers. If the consumer wishes to

:16:52.:16:56.

be sure that their pork is cruelty free then clear, mandatory labelling

:16:57.:17:03.

is essential. We know that the EU has been slow in obliging states to

:17:04.:17:08.

adopt high welfare standards, perhaps this is why the strategy

:17:09.:17:13.

does not plan to extend their welfare labelling beyond eggs, it

:17:14.:17:18.

would certainly shame some key EU countries about unacceptable farming

:17:19.:17:21.

practices. The animal welfare foundation said that as demand for

:17:22.:17:26.

livestock continues to surge particularly in developing

:17:27.:17:27.

countries, the importance of ethically sourced food is more

:17:28.:17:31.

important than ever as more animals are farmed. In this country we

:17:32.:17:38.

already have a voluntary scheme demonstrating clear animal welfare

:17:39.:17:44.

and labelling. It demonstrates high quality British produce and that

:17:45.:17:47.

food has been farmed, processed, and packed in the UK. It is Europe's

:17:48.:17:52.

food is traceable, safe to eat and produced responsibly. -- it ensures

:17:53.:18:02.

that. It is not ) that European countries can dodge welfare issues.

:18:03.:18:08.

-- it is not fair. They can hide anonymously behind inadequate

:18:09.:18:12.

labelling. If British consumers were made aware of the lower welfare

:18:13.:18:16.

standards in many European countries I believe they would choose to buy

:18:17.:18:21.

British and by compassionately. We would know where our milk has come

:18:22.:18:25.

from, where an animal has been reared, and how well it was treated

:18:26.:18:30.

in its life and potentially even how it was slaughtered. By championing a

:18:31.:18:35.

robust, sustainable, compassionate British farming industry we are

:18:36.:18:39.

delivering jobs, prosperity, and it's during our own food security.

:18:40.:18:44.

This is what the public wants and I would like to see our government

:18:45.:18:47.

ring a ill in that they do exactly that. -- bring a bill in.

:18:48.:19:02.

As many of that opinion say aye? On the contrary, no? The ayes have it.

:19:03.:19:13.

Who will bring in the bill? Stephen McPartland, will weaken,

:19:14.:19:23.

near Paris, Nigel Evans, and myself. -- Neil Harris.

:19:24.:19:49.

Farm produce labelling requirement will.

:19:50.:19:57.

On what day? Friday, May six.

:19:58.:20:04.

The Kirk will now proceed to read the orders of the day.

:20:05.:20:12.

Bank of England public services built to be considered.

:20:13.:20:15.

We begin with new clause 12 with which it will be convenient to

:20:16.:20:18.

consider the new clause and amendments are listed on the revised

:20:19.:20:24.

selection paper. To move new clause 12.

:20:25.:20:30.

Thank you, Madam Deputy Speaker. I moved government new clause 12, and

:20:31.:20:37.

emphasise how the Treasury Select Committee is an esteemed committee

:20:38.:20:42.

of this House and provides exceptional scrutiny of the

:20:43.:20:46.

government and its regulators. Through its programme of

:20:47.:20:52.

pre-commencement hearings its questions several appointees before

:20:53.:20:55.

they start work. After they have started that they can expect to

:20:56.:20:58.

appear regularly before the committee and the public can expect

:20:59.:21:04.

them to be held firmly to account. The government welcomes this

:21:05.:21:07.

scrutiny of appointees, it is a critical democratic function. That

:21:08.:21:12.

is why we have tabled the new clause to guarantee that in statute the

:21:13.:21:15.

committee always has the chance to scrutinise a new chief executive of

:21:16.:21:21.

the SCA before they start work. Since tabling the amendment... I

:21:22.:21:26.

give way. Will this be setting a trend? Which

:21:27.:21:36.

other important posts or city institutions would now be

:21:37.:21:39.

appropriate for a similar process of approval?

:21:40.:21:46.

I am speaking very narrowly to a particular new clause 12, I am sure

:21:47.:21:53.

it will be something that other committees and the Treasury Select

:21:54.:21:57.

Committee looked at again in future. I expect it to be part of the

:21:58.:22:00.

ongoing discussions between Parliament and the executive. But I

:22:01.:22:04.

speak to the very narrow characteristics of our government

:22:05.:22:11.

new clause 12 this afternoon. Since we tabled the amendment and there

:22:12.:22:14.

have been further discussions with the chair of the Treasury Select

:22:15.:22:20.

Committee over the role of the appointment of the Chief Executive

:22:21.:22:25.

of the SCA and I'm pleased to announce we have found a way of

:22:26.:22:31.

scrutinising further than the context of this legislation, indeed,

:22:32.:22:34.

today the Chancellor has written to the chair of the committee agreeing

:22:35.:22:38.

that the government will make appointments to the Chief Executive

:22:39.:22:43.

of the SCA in such a way to ensure that the Treasury Select Committee

:22:44.:22:47.

can hold a hearing before the appointment is formalised. I give

:22:48.:22:51.

away. I am most grateful. Is the letter in

:22:52.:22:57.

the vote office now, if it has already been penned?

:22:58.:23:05.

The letter is in my binder, and I am very happy, provided the chair of

:23:06.:23:08.

the select committee does not object, to read that out. And if it

:23:09.:23:14.

has not already happened, I will put a copy in the House of Commons

:23:15.:23:18.

library. I am sure that the chair of her select committee will be more

:23:19.:23:21.

than happy to share it. She led me to read it out in full? By popular

:23:22.:23:25.

demand, here is the letter. We have considered the role of the

:23:26.:23:35.

Treasury Select Committee on scrutinising the appointment of the

:23:36.:23:37.

Chief Executive of the Financial Conduct Authority. This scrutineer

:23:38.:23:41.

is important and welcome. I would ensure that appointments to the

:23:42.:23:45.

Chief Executive of the FCA are made in such a way as to ensure the

:23:46.:23:48.

Treasury Select Committee is able to hold a hearing after the appointment

:23:49.:23:52.

is announced but for it is formalised. Should the Treasury

:23:53.:23:56.

Select Committee recommend in his report that the appointment be put

:23:57.:24:01.

as a motion to the whole House, the government will make time for this

:24:02.:24:03.

motion and respect the decision of the House. Additionally, I will

:24:04.:24:12.

speak any future bill to make changes to the legislation governing

:24:13.:24:17.

a to the FCA, CEO, to make the appointees subject to a fixed

:24:18.:24:20.

five-year term. This does not apply to Andrew Bailey library -- recently

:24:21.:24:26.

announced, but would first apply to his successor and I believe these

:24:27.:24:31.

changes will reinforce the Treasury Committee's important scrutiny role.

:24:32.:24:34.

That is the end of the quote in terms of the letter. I give way to

:24:35.:24:38.

the Shadow Chancellor. It would be hobbled to ensure the House that

:24:39.:24:43.

that future legislation would be sooner rather than later. -- it

:24:44.:24:49.

would be helpful. Indeed. And I am sure he will therefore welcome the

:24:50.:24:53.

addition of government new close 12 to the bill today and he will also

:24:54.:25:00.

welcome news that the government will take the appropriate earliest

:25:01.:25:04.

opportunity to reflect that, and indeed, the earliest possible

:25:05.:25:20.

opportunity will be something that the government will consider very

:25:21.:25:26.

carefully following today's session. As I mentioned in the letter, should

:25:27.:25:30.

the Treasury Select Committee follow the hearing, the pre-commencement

:25:31.:25:34.

hearing with a report and recommend in its report that the appointment

:25:35.:25:40.

be put as a motion to the whole House, the government will make time

:25:41.:25:44.

for this motion and, should it result in a boat, the government

:25:45.:25:46.

will respect the decision of the House. As I said in my reply to the

:25:47.:25:53.

Shadow Chancellor, we will also seek an opportunity to alter the

:25:54.:26:02.

arrangement to make the appointee subject to a fixed five-year term. I

:26:03.:26:07.

can confirm that Andrew Bailey, the new CEO has been appointed to a

:26:08.:26:10.

five-year tour which can be renewed, and so, this agreed process would

:26:11.:26:17.

first apply to his successor. This agreement is the right way to

:26:18.:26:21.

reinforce the crucial scrutiny role of the Treasury Select Committee. I

:26:22.:26:26.

give way. I am grateful to the Minister. She is being extremely

:26:27.:26:31.

generous. What the minister says is extremely welcome and a significant

:26:32.:26:36.

step forward. Could the Minister explain why the Chancellor felt it

:26:37.:26:41.

was better not to insert this into the legislation but to have an

:26:42.:26:45.

arrangement through an exchange of letters's the tabled or amendment on

:26:46.:26:52.

Thursday. And as I mentioned in my remarks, there have been further

:26:53.:26:55.

discussions with the Chair of the Treasury Select Committee and I am

:26:56.:26:58.

delighted to be able to announce the result of those discussions today

:26:59.:27:03.

from the dispatch box. I would also like to take a moment to address the

:27:04.:27:08.

question of dismissals of the FCA Chief Executive. I can confirm that

:27:09.:27:12.

the government does not have the power, except in limited

:27:13.:27:16.

circumstances, to dismiss the Chief Executive of the FCA during his or

:27:17.:27:20.

her term of office. I refer the House to schedule one Z a to the

:27:21.:27:26.

financial services and markets Act 2000, paragraph four, which applies

:27:27.:27:30.

to the Chair and external members as well as the CEO. It says, "The

:27:31.:27:35.

Treasury may remove an appointed member from office on the grounds of

:27:36.:27:40.

incapacity or serious misconduct or on the grounds that in all the

:27:41.:27:46.

circumstances, the member's financial or other interests are

:27:47.:27:48.

such as to have a material effect on the extent of the functions as

:27:49.:27:52.

member as it would be proper for the person to discharge", but the

:27:53.:27:58.

lawyers are clear, those are the only reasons the Treasury can

:27:59.:28:04.

dismiss an FCA Chief Executive Tom incapacity, serious misconduct,

:28:05.:28:09.

conflicts of interest. And I hope that offers the House considerable

:28:10.:28:15.

reassurance. I give way. It is worth saying what happened in relation to

:28:16.:28:20.

Maarten Wigley in this regard. He was not technically dismissed but

:28:21.:28:24.

has term was not renewed. The situation was straight forward last

:28:25.:28:29.

year an announcement was made, July 2014 that there would not be a

:28:30.:28:33.

renewal, which would have taken place in March 2016, and as a

:28:34.:28:41.

result, he left his office six months early. I accept that might

:28:42.:28:47.

have been a mutual decision between the Treasury and Mr Wheatley, but it

:28:48.:28:49.

certainly gave the impression that if it was not a fully fledged

:28:50.:28:55.

dismissal, ultimately, the Exeter office came six months before the

:28:56.:29:05.

end of a fixed term. -- the exit from office. The honourable

:29:06.:29:10.

gentleman has stated a fact about the term of office to which he was

:29:11.:29:14.

appointed and the government chose not to renew that term of office. I

:29:15.:29:21.

think it is appropriate to put on tribute what I hope is a cross-party

:29:22.:29:24.

tribute to the excellent work of the acting Chief Executive, Tracy

:29:25.:29:28.

McDermott, who stepped into the role at that time and has carried out

:29:29.:29:36.

that role for almost a full year, absolutely in an exemplary fashion.

:29:37.:29:42.

Any further questions on this section? I am going to move on to

:29:43.:29:46.

the question of evolution, amendments referring to devolution.

:29:47.:29:52.

No further interventions. Madame Liberty Speaker, the next set of

:29:53.:29:56.

amendments in the name of the honourable member for East Lothian,

:29:57.:30:01.

the member for Carmarthen and Andy honourable member for Kirkcaldy and

:30:02.:30:07.

Cowdenbeath forced us to ask exactly who the bank works for. The answer

:30:08.:30:13.

must be the entire United Kingdom. Indeed, this is emphasised in its

:30:14.:30:19.

mission statement to promote the good of the people of the United

:30:20.:30:22.

Kingdom by maintaining monetary and financial stability. To fulfil this

:30:23.:30:27.

mandate the Bank of England goes to great lengths to make sure that it

:30:28.:30:30.

has a comprehensive understanding of the economic and financial situation

:30:31.:30:34.

across all corners of the United Kingdom. The bank has a network of

:30:35.:30:40.

12 agencies which are located across Scotland, Wales, Northern Ireland

:30:41.:30:43.

and the regions of England. Each year those agents undertake some

:30:44.:30:50.

5500 company visits and participate in panel discussions with

:30:51.:30:53.

approximately a further 3500 businesses. In this context,

:30:54.:30:59.

imposing a requirement to have regard to regional representation is

:31:00.:31:04.

unnecessary. A comprehensive framework for regional information

:31:05.:31:07.

gathering already exists. I give way to the normal gentleman. Please

:31:08.:31:14.

inform me who the Welsh representative is because I have no

:31:15.:31:17.

idea who represents Wales on the Bank of England. I will make sure

:31:18.:31:24.

that he or she makes himself or herself known to him with the

:31:25.:31:29.

greatest of speed. It is important to point out that these agents don't

:31:30.:31:36.

engage with us as politicians. I know that the one for the West

:31:37.:31:42.

Midlands and Worcestershire is very engaged with local businesses

:31:43.:31:45.

although I, as a politician, have never met him, and that is no way

:31:46.:31:51.

that it should work. I realise the Minister is trying to be hopeful,

:31:52.:31:56.

but she must recognise the reserve strategic defence between the

:31:57.:31:58.

process of information- gathering through agents and policy-making

:31:59.:32:03.

through the bodies of the bank itself and that is where we are

:32:04.:32:08.

asking for representation. I will be getting to that point as I carry on.

:32:09.:32:13.

As always with the honourable gentleman I am seeking to be helpful

:32:14.:32:16.

so hopefully he will enjoy those remarks when I get to them. In terms

:32:17.:32:25.

of the context he asks, by imposing a requirement as he does in his

:32:26.:32:30.

amendment to have regard to regional representation on the court,

:32:31.:32:33.

effectively the board of directors of the Bank of England, we believe

:32:34.:32:37.

that is unnecessary because of this framework for regional information

:32:38.:32:40.

gathering that already exists, and also, if we were to insist that we

:32:41.:32:46.

find a candidate with the perfect profile for them to serve on the

:32:47.:32:49.

court, only to downgrade them because they lived in an

:32:50.:32:54.

oversubscribed part of the country in terms of representation we did

:32:55.:32:58.

not believe that would be the most effective way to produce an effect

:32:59.:33:05.

of court. I have been clear that in setting both monetary and is

:33:06.:33:09.

financial stability policy the bank must take into account economic

:33:10.:33:12.

conditions in and the impact of policy decisions on every part of

:33:13.:33:17.

the UK. Monetary and financial stability policy must be set on a

:33:18.:33:23.

UK- wide basis. None of the 65 million people this House represents

:33:24.:33:28.

would be well served if different capital requirements applied to

:33:29.:33:31.

banks in different parts of the UK. Monetary policy must be consistent.

:33:32.:33:36.

It is impossible to set different interest rates in one region versus

:33:37.:33:41.

another. Monetary and financial stability are rightly reserved

:33:42.:33:45.

policy areas. The men and women who make up the Policy Committees must

:33:46.:33:51.

have their decision scrutinised, but policy must be set UK - wide. It is

:33:52.:33:56.

this Parliament that must hold them to account. It is this Parliament

:33:57.:33:59.

that holds power of reserved matters as these issues right we are, and it

:34:00.:34:04.

is as Parliament that represents people from every part of the

:34:05.:34:08.

country on an equal basis. Likewise, it ministers who are accountable to

:34:09.:34:13.

this House and who hold positions with the support of a majority of

:34:14.:34:16.

the House of Commons who must be responsible for making the external

:34:17.:34:19.

appointments to the Monetary Policy Committee with each member

:34:20.:34:22.

responsible for considering the impact of their policy decisions on

:34:23.:34:26.

all 65 million people in the UK. Madam Deputy Speaker, we return to

:34:27.:34:33.

the question of the bank was sows hundred -year-old name. It is

:34:34.:34:38.

important to recognise the reputation associated with the name

:34:39.:34:41.

built up over such a long period. During this time the bank has become

:34:42.:34:45.

globally renowned as a strong, independent Central Bank. We should

:34:46.:34:50.

not underestimate the importance of this. International confidence in

:34:51.:34:53.

the Bank of England helps support international confidence in our

:34:54.:34:59.

economy and currency. Turning now to the monetary framework, the

:35:00.:35:02.

government amendment that we have tabled this week is modest. The bill

:35:03.:35:06.

reduces the minimum frequency of monetary policy at the meetings from

:35:07.:35:09.

monthly meetings to at least eight meetings in every calendar year and

:35:10.:35:14.

are meant that are the reporting requirements of the Monetary Policy

:35:15.:35:17.

Committee to match. I give way to the honourable gentleman. I thank

:35:18.:35:22.

the Minister for giving way. She moved on very quickly on the matter

:35:23.:35:26.

of the name. I just wanted to clarify whether or not the

:35:27.:35:31.

government has a view on changing the name of the Bank of England in

:35:32.:35:34.

order to reflect the fact that it is in fact the bank of all of the

:35:35.:35:37.

United Kingdom ommer notwithstanding the fact that in normal everyday

:35:38.:35:43.

parlance it will still be referred to as the bank of England, it's long

:35:44.:35:47.

and proper title surely should reflect all of the nations of the

:35:48.:35:52.

native kingdom. In fact the government was founded by someone

:35:53.:35:56.

from Scotland. He's absolutely right draw attention to the fact that this

:35:57.:36:02.

is an historical anomaly. I would be the first to accept that the

:36:03.:36:04.

monetary policy of the bank of England is set for the whole of the

:36:05.:36:07.

United Ingram, but that does not mean to say that we are going to

:36:08.:36:12.

accept the amendment tabled today to change the name of the Bank of

:36:13.:36:15.

England because we think that it is well established over 300 years that

:36:16.:36:19.

it is called the Bank of England. I think the Treasury are in this

:36:20.:36:25.

instance right not to change the name. The bank of England has a

:36:26.:36:30.

brand and it could be a history lesson for those on the opposite

:36:31.:36:33.

benches. The Bank of England was founded in 19 6094, before I drop

:36:34.:36:38.

the Act of Union that might otherwise have had an impact on his

:36:39.:36:42.

initial name but the brand that it has is important and I would rather

:36:43.:36:47.

hope at least that those on the other parts of the United Kingdom

:36:48.:36:49.

would not feel that their interests are being downgraded just by not

:36:50.:36:55.

appearing in the headline name, not trees that are not least for the

:36:56.:36:59.

reasons that have been set out, that the recognise that it acts for the

:37:00.:37:04.

entirety of the United Kingdom rather than just England. On that

:37:05.:37:13.

point, I hope that his support of the United nature of our kingdom

:37:14.:37:18.

means that his party has now moved on from the discussions of last year

:37:19.:37:24.

were they wanted to break up the United Kingdom, accept the settled

:37:25.:37:27.

will of the Scottish people, that they will continue to benefit from

:37:28.:37:31.

the monetary policy established right across the country. I give way

:37:32.:37:33.

to the gentleman. Further to the point, in that

:37:34.:37:48.

regard, the amendment put forward by my colleague from East Lothian, it

:37:49.:37:56.

actually will address that issue. It is the England and Wales Cricket

:37:57.:38:02.

board, officially, when it comes to the cricket side, but of course, it

:38:03.:38:04.

is named England for promotional purposes. Even if the

:38:05.:38:11.

well-intentioned amendment of my colleague from the Scottish National

:38:12.:38:16.

party, the anchor of England would still for all intent and purposes be

:38:17.:38:22.

known as the Bank of England. -- the honourable gentleman tempts me down

:38:23.:38:29.

a path towards comparisons in terms of sports teams, which I shall

:38:30.:38:35.

decline to be tempted down. In the terms of the amendments we

:38:36.:38:41.

have tabled on the monetary Wallasey committee, the amendment we have

:38:42.:38:44.

tabled is modest. It reduces the minimum frequency of meetings from

:38:45.:38:49.

monthly to at least eight meetings in every calendar year. Our

:38:50.:38:53.

amendments are simply just the reporting requirements to match. The

:38:54.:38:58.

amendment in the name of the member for, and used suggests three add a

:38:59.:39:06.

second policy objective of maximising employment. We conducted

:39:07.:39:11.

a review of the monetary policy framework in 2013. It concluded that

:39:12.:39:17.

a flexible inflation targeting framework was the best approach.

:39:18.:39:21.

Employment is already explicitly part of the committee objectives.

:39:22.:39:26.

The secondary objective is, and I quote, to support the economic

:39:27.:39:29.

policy of the government including the objectives for growth and

:39:30.:39:34.

employment. The most recent monetary policy committee remit letters

:39:35.:39:38.

summarised the government economic policy is, I quote, to achieve

:39:39.:39:44.

strong, sustainable, more balanced route across the country and between

:39:45.:39:53.

industries. I give away. Thank you. She is taking refuge in

:39:54.:39:59.

the existing mandate for the Bank of England, a mandate which we all

:40:00.:40:04.

know, both sides of the floor, has long since become redundant. The

:40:05.:40:08.

inflation target has been dead in the water for years and years and

:40:09.:40:12.

years because inflation is nowhere near 2% and not likely to be that

:40:13.:40:17.

for a long long time. We are looking for other policy measures to replace

:40:18.:40:22.

the 2% inflation target, that is what is implicit in the amendment.

:40:23.:40:26.

Can the Minister please address what future targets the anchor of England

:40:27.:40:30.

should have to address a deflation Iraq rather than an inflationary

:40:31.:40:39.

error, the last 20 years? He asks an important question and there are

:40:40.:40:42.

many opportunities in Parliament, in terms of scrutiny of the bank to ask

:40:43.:40:48.

these important questions, and the mechanism the government chooses to

:40:49.:40:53.

use is the letter process, and the remit. But he and I are both old

:40:54.:41:02.

enough to know how inflation... I know, surely not! How inflation has

:41:03.:41:08.

changed over the years. I think we should all welcome in this House the

:41:09.:41:12.

significant lowering of inflation expectations, and I think we should

:41:13.:41:18.

all remember how important it is that we continue to ask the Bank of

:41:19.:41:21.

England to keep inflation under control and we never return to the

:41:22.:41:27.

kind of impoverishing inflationary policies that so harm to people in

:41:28.:41:31.

the 1970s, particularly the poorest and the oldest in society. Indeed,

:41:32.:41:44.

price stability must take primacy, a single objective is the best way to

:41:45.:41:47.

me sure the inflation target is credible. This in turn anchors

:41:48.:41:51.

all-important expectations and helps keep inflation under control. The

:41:52.:41:57.

system has shown it produces good Labour market outcomes as well.

:41:58.:42:01.

Despite the global uncertainty we have record numbers of people in

:42:02.:42:05.

work. An unemployment rate that is at its lowest in a decade. And a

:42:06.:42:09.

claimant count that has not been lower for over 40 years. Targeting

:42:10.:42:20.

low inflation is yours -- ensures that... I give way.

:42:21.:42:26.

I can remember what inflation was like in the 1970s. It does seem that

:42:27.:42:31.

the Bank of England so monetary policy here is to keep inflation

:42:32.:42:35.

rate down. Surely we must recognise that inflation has been well below

:42:36.:42:42.

the 2% target for a long time now. Does she feel that either there

:42:43.:42:45.

should be a different inflation target, or that there should be a

:42:46.:42:49.

different set of remit of the Bank of England to recognise that,

:42:50.:43:00.

without taking an error if we granted that inflation can ever be

:43:01.:43:02.

vanquished, but recognising that there are other aspects of the

:43:03.:43:06.

economy that the Bank of England in relation to monetary policy should

:43:07.:43:11.

prepare for attention? My honourable friend is an extremely

:43:12.:43:15.

wise and knowledgeable person, I will not refer in any way to his

:43:16.:43:19.

age, he highlights an important point. And emphasises the

:43:20.:43:24.

behavioural characteristic of the recency affect, in that we recognise

:43:25.:43:32.

today inflation is well below the 2% target but it was only in the life

:43:33.:43:36.

of the last Parliament that it was above 5%, so even in the six years I

:43:37.:43:43.

have been a member we have tested the parameters of the inflation

:43:44.:43:50.

target. I do not think there's any need, in these discussions this

:43:51.:43:54.

afternoon, to make any changes to that. If I may just conclude my

:43:55.:44:00.

remarks by speaking briefly on amendments six, seven, and new

:44:01.:44:06.

clause 13. Amendment six states that the controller may enquire into the

:44:07.:44:11.

bank's success in state policy objectives but shall not enquire

:44:12.:44:13.

into the desirability of such objectives being set. The bill will

:44:14.:44:19.

have that exact effect. Amendment six also controls how the auditor

:44:20.:44:25.

general should submit a port. Parliament has designated to the

:44:26.:44:32.

control of the content of national audit office report and the timing

:44:33.:44:35.

of publication. It is important that this independent officer can use his

:44:36.:44:38.

judgment on how Parliament and the public are best served. The National

:44:39.:44:44.

audit act 1983 provides that the controller may report to the House

:44:45.:44:48.

of Commons the result of once he has reported to -- result of any

:44:49.:45:01.

examination, as it mitigates the reports conclusions being overtaken

:45:02.:45:04.

by events. Amendment to seven with this supply restrictions set out in

:45:05.:45:12.

the act of 2000, on the disclosure of protective information in

:45:13.:45:14.

relation to report by the controller and auditor General. Information is

:45:15.:45:18.

specially protected under these rules if it is held by the bank of

:45:19.:45:23.

the purposes of monetary policy. For supporting financial institutions,

:45:24.:45:29.

to maintain stability, or for private banking purposes. Similarly,

:45:30.:45:32.

the amendment in the name of the member for Bishop Auckland would

:45:33.:45:35.

remove three corresponding exclusions in the Freedom of

:45:36.:45:39.

Information Act. I hope to persuade the House that each of the three

:45:40.:45:42.

categories of detected information is entirely sensible. The first,

:45:43.:45:47.

applying to the monetary policy functions, how we communicate

:45:48.:45:49.

monetary policy is extremely important. It moves markets in

:45:50.:45:55.

substantial ways and every detail published minutes is scrutinised for

:45:56.:46:00.

predictions of future changes. Making sure information is presented

:46:01.:46:05.

in a timely way is a vital. That is why the original legislation,

:46:06.:46:08.

creating the committee in 1998, set out the full range of disclosure

:46:09.:46:11.

requirements including publication of the minutes, and of a quarterly

:46:12.:46:18.

inflation report. Since then the tankers implement the

:46:19.:46:20.

recommendations of the review into NBC transparency. -- the bank has.

:46:21.:46:29.

We support the full implication of that review. Financial operations

:46:30.:46:33.

intended to support financial institutions for the purposes of

:46:34.:46:36.

maintaining stability, honourable members will understand that if the

:46:37.:46:40.

bank is to extend emergency liquidity assistance, careful

:46:41.:46:43.

relocation is a critical element of deserving stability. -- preserving.

:46:44.:46:53.

Covert assistance would be reported privately to the committees whilst a

:46:54.:46:56.

broader liquidity scheme is for institutions such as the special

:46:57.:46:59.

liquidity scheme, and the discount window facility, maybe announced to

:47:00.:47:06.

the market. Finally, limited private banking services are excluded from

:47:07.:47:10.

FOIA requests. The Bank of England also provides private banking to

:47:11.:47:16.

customers. It would be entirely inappropriate to subject ordinary

:47:17.:47:18.

bank customer information to disclosure.

:47:19.:47:28.

The appointment of the SCA chief executive. The question is that new

:47:29.:47:34.

clause 12 be read a second time. Thank you, Madam Deputy Speaker. I

:47:35.:47:40.

beg to move amendments six and seven in my name and that of my right

:47:41.:47:46.

honourable friend. But I want to return to the question of new clause

:47:47.:47:49.

one and new clause 12 regarding appointments of the Financial

:47:50.:47:59.

Conduct Authority Chief Executive. To support clause one, giving the

:48:00.:48:04.

selectivity of formal role in the appointment of the chief Executive,

:48:05.:48:10.

and is better placed, in my view, to guarantee the confidence and

:48:11.:48:13.

independence of the regulator than the amendment in the name of the

:48:14.:48:18.

Chancellor, which at our original reading, but too little to change

:48:19.:48:23.

the status quo, and was tabled in response to the amendment forward by

:48:24.:48:27.

the chair of the Treasury Select Committee. We had a similar debate

:48:28.:48:33.

at committee stage on an amendment tabled guarding the appointment

:48:34.:48:37.

process for the Chief Executive of the prudential regulation authority.

:48:38.:48:43.

Select committees have routinely held pre-appointment hearings for a

:48:44.:48:48.

number of public appointments since 2008, with a number of candidates

:48:49.:48:53.

not approved. The previous Coalition Government could develop the

:48:54.:48:56.

scrutiny agenda somewhat when the Chancellor agreed that the Treasury

:48:57.:49:01.

committee could have the power of veto over appointments to the office

:49:02.:49:05.

for budgetary responsibility in 2010. Public Accounts Committee has

:49:06.:49:18.

a veto over appointments of and -- of controller and auditor General.

:49:19.:49:24.

Then subject to a confirmation hearing by the Treasury Secretary.

:49:25.:49:29.

The Treasury Select Committee has power, of course, over the chair and

:49:30.:49:32.

board members in the office of budgetary responsibility, an

:49:33.:49:36.

arrangement that the Chancellor said he would put in place, in his words,

:49:37.:49:39.

because I want there to be absolutely no doubt that this is an

:49:40.:49:47.

independent body. The Minister will be aware that when it examined

:49:48.:49:50.

proposals for the future official conduct authority, back in 2013, the

:49:51.:49:57.

Treasury Select Committee did make a number recommendations on the

:49:58.:50:01.

accountability of the new body to Parliament, including that the

:50:02.:50:03.

legislation provided that the chief executive be subject to the

:50:04.:50:09.

appointment scrutiny. -- pre-appointment. I recall that the

:50:10.:50:13.

Treasury Secretary was disappointed by the government response, in view

:50:14.:50:19.

of the deficiencies in the accountability mechanisms for the

:50:20.:50:24.

Financial Conduct Authority. In the view of the Treasury Select

:50:25.:50:27.

Committee, it was set up, as we heard today, by the letter from the

:50:28.:50:33.

chair, his letter to the Chancellor, on January 26, 2016, following the

:50:34.:50:42.

appointment of the current PRA chief executive is next leader of the

:50:43.:50:49.

Financial Conduct Authority. We had the right honourable gentleman set

:50:50.:50:51.

out the view of the committee that it should have a veto over the

:50:52.:50:54.

appointment and dismissal of the Chief Executive of both the

:50:55.:50:56.

Financial Conduct Authority and the PRA. The letter said that the chair,

:50:57.:51:05.

John Griffiths Jones, told the committee that there was merit in

:51:06.:51:09.

the proposal, when he met the committee members on January 20 this

:51:10.:51:15.

year. I did like this up at committee stage and said it would be

:51:16.:51:20.

helpful to know whether the Chancellor had shared his thinking

:51:21.:51:23.

on calls to extend the appointment hearings and the power of veto to

:51:24.:51:29.

those two positions. -- flag this up. Now we have the reply in the

:51:30.:51:36.

Minister's ring binder. And it was exciting to hear the contents. We

:51:37.:51:40.

got a fantastic insight into the fireside style of exchanges in the

:51:41.:51:46.

government. And on the side of the House we do believe that the

:51:47.:51:49.

Treasury committee should have a greater authority on financial

:51:50.:51:58.

regulation in this country. In relation to the new clause 12 I

:51:59.:52:01.

would say, however, it is not clear what would happen if you she was

:52:02.:52:11.

appointed and appears before the committee- are they left in limbo or

:52:12.:52:14.

in fact settling into their new post? Or practice would simply be

:52:15.:52:20.

business as usual with the Treasury Select Committee not given the power

:52:21.:52:27.

that we all believe it deserves? We do believe that simply requiring any

:52:28.:52:30.

new chief to appear before the committee within three months of

:52:31.:52:36.

appointment delivers nothing particularly new and it is

:52:37.:52:39.

reasonable to expect any new post holder would appear within this time

:52:40.:52:45.

frame, in any event, whether it is currently codified or not. Regarding

:52:46.:52:53.

new clause 12, I am pleased to note, as the Minister herself said, and I

:52:54.:52:57.

have commented upon, is being exciting news, namely that the

:52:58.:53:03.

government, through the means of the Chancellor's letter, communicate and

:53:04.:53:06.

accepts the broad thrust of proposals put forward by the chair

:53:07.:53:11.

of the select committee, and I also note and welcome the Minister's

:53:12.:53:15.

commitment today to introduce the relevant legislation, in her own

:53:16.:53:21.

words, sooner rather than later. I would politely suggest that these

:53:22.:53:25.

changes be introduced in the finance shortly to come before the House.

:53:26.:53:30.

There's an opportunity there not to be missed.

:53:31.:53:39.

In relation to labour's two amendments we tabled following the

:53:40.:53:44.

committee stage and the amendment in the name of the member for Bishop

:53:45.:53:48.

Auckland, each of these amendments in their own way addresses the

:53:49.:53:54.

crucial need for transparency and openness in the Bank of England. The

:53:55.:54:00.

subject of the National Audit Office were the power to investigate the

:54:01.:54:03.

bank has been subject to discussion at each stage of the bill both in

:54:04.:54:08.

the Commons and in the Other Place, the controller and Auditor General

:54:09.:54:12.

was clearly concerned about the proposals in the bill that would

:54:13.:54:18.

have allowed the Court of directors veto over the new powers for the

:54:19.:54:22.

National Audit Office, and there has been, I am pleased to say, clear

:54:23.:54:27.

progress on this issue as the bill has proceeded through both houses,

:54:28.:54:30.

particularly in the Other Place, with the removal of this veto. And

:54:31.:54:35.

the government, in response, as honourable members will recall,

:54:36.:54:40.

posed a memorandum of understanding between the bank and the National

:54:41.:54:44.

Audit Office to establish the draft of which I understand has been

:54:45.:54:48.

welcomed by both sides, so amendments six and seven in the

:54:49.:54:55.

opposition's name seek to extend and clarify the powers of the controller

:54:56.:55:00.

to enquire into the bank's success in achieving its policy objectives,

:55:01.:55:05.

and we believe that this does not encroach beyond the boundaries,

:55:06.:55:08.

questioning the merits of polities that Mac policy decisions or assist

:55:09.:55:12.

the National Audit Office in ascertaining whether the bank is

:55:13.:55:16.

delivering value for money or not. And with regard to new clause to,

:55:17.:55:23.

Labour does seem merits in the proposal for wider geographical

:55:24.:55:33.

representation on the board. Briefly returning to his own close, new

:55:34.:55:38.

clause six, whilst I accept that transparency and openness is the

:55:39.:55:41.

spirit of the age and we cannot move against it, does he not recognise,

:55:42.:55:49.

the Treasury will be at the vanguard of this, I am sure, does he not

:55:50.:55:55.

accept that, at times of great difficulty where there are issues

:55:56.:56:00.

about the stability and functioning of the UK financial and banking

:56:01.:56:04.

system it would be appropriate not just for the Treasury Select

:56:05.:56:06.

Committee but for the Treasury itself to have some say in

:56:07.:56:10.

suggesting that there should be a fully fledged openness, in other

:56:11.:56:16.

words, that the safeguards he has put in place here refer only to the

:56:17.:56:20.

Treasury Select Committee. Does he not see that there might be

:56:21.:56:23.

instances where ministers would, rightly, have concerns about issues

:56:24.:56:27.

stability that should he protected from open transparency at a

:56:28.:56:32.

particular time window might be a move to make these things more open

:56:33.:56:37.

at some point in the future once up to killer threat had passed? -- the

:56:38.:56:44.

particular threat. I thank the honourable member for his

:56:45.:56:46.

intervention. It may be that transparency is not the spirit of

:56:47.:56:51.

the age but also the spirit of the future. I would draw his attention

:56:52.:56:57.

to the fact that the wording is the controller shall submit reports

:56:58.:57:01.

arising from the exercise of his powers under subsection six a, so it

:57:02.:57:07.

is not a completely open book policy in relation to everything else, but

:57:08.:57:14.

in relation to the new clause two, put in the name of the member for

:57:15.:57:20.

East Lothian, we see merit in the proposal for wider geographical

:57:21.:57:23.

representation on the board and our own committee stage amendment, we

:57:24.:57:29.

made this statement for making sure that different stakeholders are

:57:30.:57:32.

represented including dedicated places for customers and the

:57:33.:57:36.

practitioners. And similarly, we do support the amendment tabled by My

:57:37.:57:41.

Honourable Friend, the member for Bishop Auckland, who has a long

:57:42.:57:45.

track record in campaigning for greater transparency in financial

:57:46.:57:50.

services and her amendments it is very well with the opposition's

:57:51.:57:54.

seeking to empower the National Audit Office further by making the

:57:55.:57:57.

case for greater powers for Freedom of Information requests. Now, Madam

:57:58.:58:03.

Deputy Speaker, I turn to new clause three and new clause five put

:58:04.:58:07.

forward respectively by the Scottish National Party and by Plaid Cymru.

:58:08.:58:18.

They have tabled amendments to change the name of the Bank of

:58:19.:58:21.

England. The SNP were so keen to discuss their own amendment that

:58:22.:58:26.

they tabled it twice. We discussed the amendment in committee and it

:58:27.:58:29.

brought it before us again seeking to have the name of Scotland

:58:30.:58:33.

alongside Wales and Northern Ireland as part of the title, and they are

:58:34.:58:37.

now joined by the on-board board member for Carmarthen and four Plaid

:58:38.:58:43.

Cymru who has taken a different tack and removed or national names and

:58:44.:58:46.

removes Ashman refers solely to the bank by the name of the currency and

:58:47.:58:56.

that is sterling with an E and not an I. We are happy to support this

:58:57.:59:05.

as it recognises the unifying role the bank which services all parts of

:59:06.:59:09.

the United Kingdom and we will support this again today, and, Madam

:59:10.:59:14.

Deputy Speaker, in relation to new clauses six and eight and the

:59:15.:59:17.

government amendment three, the amendments do have a number of

:59:18.:59:23.

merits, new clause seven in the name of the honourable member for

:59:24.:59:27.

Carmarthen in with regard to the Monetary Policy Committee sets out a

:59:28.:59:33.

new mandate of objective for the MPC to include maximum employment. New

:59:34.:59:40.

clause six proposes representatives on the MPC from the devolved

:59:41.:59:45.

authorities of Scotland, Wales and England and new clause eight argues

:59:46.:59:48.

that the bank should become more accountable for its decisions to

:59:49.:59:54.

those same bodies. The Labour Party has established a review into the

:59:55.:59:57.

mandate of the Monetary Policy Committee under the former member of

:59:58.:00:04.

the Monetary Policy Committee, David blanch flower, and we have

:00:05.:00:08.

previously said we would look at a wide range of ideas, including what

:00:09.:00:13.

can be learned from the US Federal Reserve. That would include

:00:14.:00:17.

considering the importance of growth, employment, earnings in the

:00:18.:00:24.

committee's double -- deliberations. Indeed, in regard the new clause

:00:25.:00:31.

seven, David Blanchflower has written in city AM that he would

:00:32.:00:35.

consider the importance of maximising employment in his review

:00:36.:00:39.

and David Blanchflower has spoken about the size and crucial we be

:00:40.:00:46.

gender balance of the committee, optimal policy rules, asymmetrical

:00:47.:00:48.

targeting and the relationship with fiscal policy as well as the

:00:49.:00:53.

frequency of meetings, so we do, Madam Deputy Speaker, welcome the

:00:54.:00:57.

proposal for the bank to report to the devolved authorities but are not

:00:58.:01:02.

supporting these amendments regarding the MPC today. We see

:01:03.:01:06.

merit in them as part of an ongoing debate and we look forward to

:01:07.:01:09.

considering and sharing the results of David Blanchflower's review of

:01:10.:01:14.

the MPC in due course and with those comments, I draw my comments to a

:01:15.:01:25.

conclusion. Thank you very much, Madam Deputy Speaker. Can I just

:01:26.:01:30.

say, that was a very good speech and I congratulate the honourable

:01:31.:01:34.

gentleman in covering a lot of ground with a lot of detail and a

:01:35.:01:40.

sense of humour, which I enjoyed. And he saved me the trouble about

:01:41.:01:45.

the OBR and the importance of that as a precedent for what we are

:01:46.:01:49.

discussing today. I would like to say and the sentence, otherwise I am

:01:50.:01:54.

sure that I will be told to be quiet by Madam Deputy Speaker, this is a

:01:55.:02:00.

very good bill. In many respects it implements a good number of the

:02:01.:02:07.

wider objectives of Bank of England scrutiny and accountability which

:02:08.:02:10.

the Treasury Committee has been pushing for, for many years. I just

:02:11.:02:16.

want to take this opportunity to say thank you to those members of the

:02:17.:02:20.

Treasury Committee in the last Parliament, as well as those in

:02:21.:02:22.

this, who pressed with this, it shows that over time things can be

:02:23.:02:28.

achieved if one persists, and it is something about what we are hearing

:02:29.:02:31.

today with respect to the specific amendments which my remarks reflect.

:02:32.:02:41.

I am very pleased that, after quite a lot of discussion with the

:02:42.:02:49.

Minister, I am very grateful for her help and assistance over a number of

:02:50.:02:54.

days and also from the Chancellor of the Exchequer, particularly last

:02:55.:02:57.

night in a telephone conversation which was then followed up by the

:02:58.:03:00.

exchange of letters, that we have now reached agreement, therefore I

:03:01.:03:10.

will not need to take clause one to prevent. The exchange of letters

:03:11.:03:16.

provides most of the objectives we sought on the new clause one. It is

:03:17.:03:19.

worth going through the key points. As the minister clarified

:03:20.:03:23.

effectively by reading out the letter, appointments will be made in

:03:24.:03:26.

a way that ensures the Treasury Committee can hold a hearing before

:03:27.:03:31.

the appointment is formalised. The question about whether it is a

:03:32.:03:36.

pre-commencement or pre-appointment hearing is in my view a distinction

:03:37.:03:42.

without a difference. Secondly, if the Treasury Select Committee

:03:43.:03:44.

disagrees with the appointment, it will report that the House and, if

:03:45.:03:50.

the committee chooses, the government must find time for a

:03:51.:03:54.

debate on the committee report. This would be on a bootable motion to

:03:55.:04:05.

accept the conclusion of the motion -- voteable. The government further

:04:06.:04:11.

angry that they will accept a decision of the House once that vote

:04:12.:04:14.

has been taken. Thirdly, the government will, and this is

:04:15.:04:18.

something there has been some discussion about already this

:04:19.:04:21.

afternoon, at the earliest opportunity change the legislation

:04:22.:04:25.

to ensure that future appointments of chief executives to the SCA are

:04:26.:04:32.

made on a fixed, renewable, 5- year term. I would expect that change in

:04:33.:04:36.

legislation to take place in the next Parliamentary session. I'm not

:04:37.:04:42.

sure that it would satisfy the long title of the bill, but, if it does,

:04:43.:04:48.

we can put it in. I would expect the government to put it in. I also

:04:49.:04:52.

recognise that the Chancellor couldn't fully commit himself to me

:04:53.:04:58.

over the phone, after all, he would have had no time to secure agreement

:04:59.:05:02.

in Cabinet from his colleagues for the legislative time. But I do

:05:03.:05:07.

expect that he would do this as soon as is in. After all, it would be a

:05:08.:05:12.

pretty small, self-contained thing, if that is what it requires. The

:05:13.:05:16.

fourth point, which hasn't so far been mentioned, is that it is his

:05:17.:05:27.

clear view, and I am not in anyway misrepresenting him, that the

:05:28.:05:29.

arrangements we are now putting in place should be the permanent method

:05:30.:05:35.

of appointment. That is, not just something that will disappear with

:05:36.:05:40.

the disappearance of this Chancellor or the helpful minister we have at

:05:41.:05:44.

the dispatch box at the moment, however supportive she may be the

:05:45.:05:49.

proposals. Why has the Treasury Committee devoted so much time to

:05:50.:05:54.

this issue? I would like to give a specific and a general answer to

:05:55.:05:58.

that. First of all, the specifics. There have been widespread concerns

:05:59.:06:02.

at the independence of the SCA, that it has been compromised by the

:06:03.:06:10.

circumstances of his departure, by other apparent interference in the

:06:11.:06:14.

work of the SCA by senior Treasury officials and possibly amongst other

:06:15.:06:21.

things. I have to say that we have explored these in cross-examination

:06:22.:06:24.

in committee, and we have not found any such evidence. The member for

:06:25.:06:32.

the Cities of London and Westminster got right to the point where he

:06:33.:06:39.

credits the perception of interference that nonetheless

:06:40.:06:43.

remains. And that perception makes it harder for regulators to do their

:06:44.:06:51.

job, and it had to be addressed. Bolstering the perceived

:06:52.:06:54.

independence of this key appointment and ensuring that the individual

:06:55.:06:59.

cannot easily be removed by the Treasury, it seemed to us, on the

:07:00.:07:03.

committee, that it was therefore crucial. I give way to my Right

:07:04.:07:09.

Honourable Friend. I want to put it on the record, I do not think there

:07:10.:07:15.

was any undue interference from the Treasury and actually, I am very

:07:16.:07:18.

happy that Andrew Bailey is taking over post I think he will make a

:07:19.:07:23.

very good future chief executive. Nonetheless it was that sense

:07:24.:07:27.

perception within Square mile that we have to have close to our hearts.

:07:28.:07:32.

And can I just briefly say how much I approve of the Treasury accepting

:07:33.:07:39.

the guts of the new clause one and the new clause nine. It is great way

:07:40.:07:44.

to their credit that the not had to go through the House of Lords which

:07:45.:07:50.

happens when amendments are made through House of Lords rather than

:07:51.:07:54.

coming as part of the discussions at the report stage.

:07:55.:07:59.

I would like to touch on one other area with respect to this issue, the

:08:00.:08:06.

apparent statutory protection against dismissal. Which came into

:08:07.:08:15.

question as a result of Martin Wheeler's departure. Whatever the

:08:16.:08:18.

reality, the current protection appeared to be inadequate. That is

:08:19.:08:23.

perhaps because he was only appointed by three year term and it

:08:24.:08:30.

is why a five-year term, a longer term, would provide more protection.

:08:31.:08:34.

To put it even more simply, these changes rectify, in another way, the

:08:35.:08:44.

risk of arbitrary dismissal. If, for example, the committee strongly

:08:45.:08:46.

supports keeping the incumbent after four and a half years, they can make

:08:47.:08:51.

it abundantly clear in a report, and make it clear that they will

:08:52.:08:56.

recommend any other candidate to be voted down to the House of Commons.

:08:57.:09:02.

So in practice I think we have the protection we already wanted. The

:09:03.:09:11.

FCA needs a strong and demonstrably independent Chief Executive

:09:12.:09:20.

countable to -- accountable to Parliament. It has struggled to

:09:21.:09:24.

emerge from the failed FSA, it has since it best staff poached ivory --

:09:25.:09:34.

by the PRA, and has hit the headlines for all the wrong reasons,

:09:35.:09:38.

with the effect of wiping 20% of the share value of the life insurance

:09:39.:09:44.

sector. With what will amount to a requirement for parliamentary

:09:45.:09:52.

approval of future appointments, or dismissals, the incumbent will be in

:09:53.:09:54.

a stronger position to resist pressure from ministers and

:09:55.:09:58.

officials and his authority will be holstered quite a -- bolstered quite

:09:59.:10:09.

a bit. It is not an issue that Pittodrie a great -- perturbs me a

:10:10.:10:18.

great deal, any attempt to circumvent arrangement would lead to

:10:19.:10:23.

a complete collapse of trust between the Treasury committee and the

:10:24.:10:25.

government and I simply do not foresee that happening.

:10:26.:10:34.

Does he not have at least some small concern that by not putting it on

:10:35.:10:38.

the face of the bill, it does not set a precedent, and to go back to

:10:39.:10:41.

an earlier exchange I tried to have, it might therefore give licence for

:10:42.:10:47.

the Treasury to take this as very much a sweet generous case, rather

:10:48.:10:53.

than recognising that the committee should have an important role in the

:10:54.:10:57.

appointments of senior figures within the financial services

:10:58.:11:09.

firmament? -- sui generis. One can turn the ardent on its head

:11:10.:11:12.

without the need for statutory change with other bodies. -- the

:11:13.:11:17.

document. We now feel a statutory double lock for the head of the oh

:11:18.:11:26.

BR was found to be some use in production of the forecast, but

:11:27.:11:36.

which the perception of might have weakened the oh BR. We have a

:11:37.:11:40.

requirement for a resolution before the House prior to the appointment

:11:41.:11:44.

of the chairman to the Office of National Statistics and now we have

:11:45.:11:47.

these arrangement, so we have a battery of different arrangements

:11:48.:11:55.

from which to draw. May I congratulate my honourable

:11:56.:11:59.

friend in achieving this great success for parliamentary scrutiny?

:12:00.:12:02.

And suggest that it is better that it is done in a non-statutory way.

:12:03.:12:07.

Being statute into the proceedings of the House always present longer

:12:08.:12:13.

term problems and therefore to set a non-statutory precedent has lots of

:12:14.:12:17.

advantages. I always like listening to my

:12:18.:12:23.

honourable friend and member of the Treasury committee, and of course a

:12:24.:12:28.

constitutional expert. It is certainly true that in this place a

:12:29.:12:34.

good deal of course I constitutional change tends to take place

:12:35.:12:41.

gradually. -- quasi. Often as a result of informal arrangement. And

:12:42.:12:47.

that is all to the good. And that is what the honourable gentleman is

:12:48.:12:51.

saying. Everybody is trying to get in, whereas I am tried to get to the

:12:52.:12:56.

end. I was almost there, but I will give way.

:12:57.:13:04.

Does he not feel just the slightest hint of disappointment in the

:13:05.:13:06.

intervention of the honourable member? Because it surely was an

:13:07.:13:15.

historic first that he signed a new clause amending the British

:13:16.:13:20.

constitution. Of course the honourable member, is

:13:21.:13:28.

a great and Bernard constitutional expert, will explain this apparent

:13:29.:13:33.

contradiction to the House, in, I hope, a lengthy disposition in a few

:13:34.:13:35.

moments. -- great and learned. Appointees should be put in

:13:36.:14:00.

a position where they are forced to explain their actions before

:14:01.:14:05.

Parliament, and they should also feel accountable to Parliament. In

:14:06.:14:11.

order to achieve that, the means by which they are appointed or have

:14:12.:14:14.

protection from dismissal is very relevant. That is why this type of

:14:15.:14:20.

change, I think, can offer us something. What we have had over

:14:21.:14:27.

decades with successive governments is governments off-loading

:14:28.:14:31.

responsibilities to quangos, leaving the public with the sense that

:14:32.:14:34.

ultimately nobody is democratically accountable for anything. I think

:14:35.:14:40.

that accountability for decisions formally taken, once upon a time

:14:41.:14:46.

taken directly by ministers, which now sit with an elected appointees

:14:47.:14:53.

in quangos, need a very thorough scrutiny and cross-examination and

:14:54.:14:55.

that is what we have been trying to do. This agreement with the

:14:56.:15:04.

Chancellor is a sizeable step in the right direction. Of course, in an

:15:05.:15:09.

ideal world, I would like access to the statute book to write exactly

:15:10.:15:15.

what I feel, on behalf of the committee, should be there. But we

:15:16.:15:20.

live in the real world. I am very happy with the exchange of letters

:15:21.:15:23.

and grateful to ministers for having agreed it and I won't be taking

:15:24.:15:36.

clause one to. -- to a division. I agree with the member for

:15:37.:15:41.

Chichester that there is a law to be commended in this bill. Some of the

:15:42.:15:51.

good things in course of 12 were actually pushed on the government.

:15:52.:15:58.

-- clause 12. And I also think there are things which are still negative.

:15:59.:16:04.

This brings me to a conclusion. Quite a long conclusion. The bill

:16:05.:16:12.

began as a tidying up operation, that is why it was launched in the

:16:13.:16:18.

Lords, it seemed to be just a few things, essentially regards the 2012

:16:19.:16:25.

financial services act. But the longer it went through various

:16:26.:16:29.

stages the more became apparent that it was exposing a whole series of

:16:30.:16:35.

issues in the regulatory system which were not fit for purpose. The

:16:36.:16:42.

government has convinced itself that all has been done to resolve the

:16:43.:16:49.

crisis of 2007, with the exception of a little tidying up. But that is

:16:50.:16:53.

not true. What we have discovered, time after time in going through

:16:54.:16:57.

this, is issues with operation of the Bank of England, the regulatory

:16:58.:17:01.

bodies and how they function and how fit for purpose they are, and new

:17:02.:17:05.

issues emerging only in the last few weeks regarding tax havens. All this

:17:06.:17:12.

has appeared. So actually what see is not this Bank of England Bill

:17:13.:17:18.

putting problems away, but rather the start of a whole series of

:17:19.:17:22.

pieces of legislation until we have got it right. Far from being a

:17:23.:17:26.

tidying up operation we have started something her. -- something here. I

:17:27.:17:35.

moved causes two and three in my name in the name of my colleagues.

:17:36.:17:43.

Because it gets to the nub of this thing we have uncovered. The Bank of

:17:44.:17:47.

England in the last 20 years, particularly the last ten, has

:17:48.:17:49.

acquired an extraordinary range of new powers. Not over forecasting,

:17:50.:18:02.

but fundamental policy levers for running the whole economy have been

:18:03.:18:05.

transferred from this House and the executive to the Bank of England

:18:06.:18:10.

itself. It began with transferring to the bank powers over interest

:18:11.:18:19.

rates in 1997, but of course if you transfer that control to the bank

:18:20.:18:23.

you also transfer the setting of the exchange rate, which nobody seemed

:18:24.:18:27.

to notice at the time. De facto, the bank given control over the external

:18:28.:18:32.

sector. And more recently with the issue of quantitative easing the

:18:33.:18:38.

bank has forced interest rates down to zero, so if you cannot live your

:18:39.:18:41.

monetary policy, what else do you do? -- influence monetary policy. So

:18:42.:18:49.

the bank has influence over large swathes of fiscal policy,

:18:50.:18:51.

essentially housing policy, because housing determines the direction of

:18:52.:18:57.

economic growth. In recent weeks the Bank of England has been deciding

:18:58.:19:03.

between buy to let, or for homeowners. Micro-decisions have

:19:04.:19:11.

been transferred to the bank. My worry is it means we have crossed a

:19:12.:19:14.

line in accountability with the bank. That is not a criticism of

:19:15.:19:22.

individuals within the bank or the governor, who I have a high regard

:19:23.:19:26.

for, but we have gradually allowed the bank to take over from this

:19:27.:19:30.

House far too much of the operational policy directing the

:19:31.:19:37.

economy. That is why I think new clause 12, which I am happy to

:19:38.:19:44.

support, is a step forward. It is beginning to redress the balance of

:19:45.:19:50.

accountability. With the government acceptance of the general line of

:19:51.:19:53.

march from the Treasury Select Committee, we are beginning to move

:19:54.:20:01.

to the point where they -- key members of the regulatory regime are

:20:02.:20:04.

confirmed in the appointment by the House. I want to put on record that

:20:05.:20:13.

the two precedents we now have in that direction, the Treasury

:20:14.:20:17.

committee, obviously, in observing the House, informing the appointment

:20:18.:20:29.

of the director of the O BR, and now this appointment of the head of the

:20:30.:20:39.

FCA being affirmed by this House, I think that is the line of march. But

:20:40.:20:44.

I want to put on record that we see that as a down payment. We are

:20:45.:20:49.

moving in a direction where the governor of the Bank of England and

:20:50.:20:52.

all the key regulatory agencies should be confirmed by this House. I

:20:53.:20:57.

know that it will not take a long time. I know there is sometimes a

:20:58.:21:00.

gentle struggle between the executive and the House in terms of

:21:01.:21:07.

who has the say, but what we are seeing here is a move towards more

:21:08.:21:11.

democratic accountability being held by this House. And therefore I

:21:12.:21:16.

welcome it. Let me move on briefly. Two new clause two. Given the policy

:21:17.:21:32.

powers that lie with the Bank of England, I think we had to make sure

:21:33.:21:36.

that the committees of the Bank of England, above all, the ruling

:21:37.:21:48.

court, democratically accountable. So we moved a new clause that says

:21:49.:21:52.

that nominations to the Court of directors of the bank, still may of

:21:53.:21:58.

the Exchequer, should have regard to the importance of ensuring balanced

:21:59.:22:01.

representation of the nations and regions of the United Kingdom. That

:22:02.:22:06.

clause has been written very carefully. There is no suggestion

:22:07.:22:12.

that the court should be a federal body. What we are suggesting is that

:22:13.:22:17.

in the balance of its make up which would have representation of the

:22:18.:22:21.

entire nation because, rightly or wrongly, and I think more brightly

:22:22.:22:26.

than wrongly, there is a perception that the City of London, and the

:22:27.:22:30.

major banks and financial institutions, have too much sway

:22:31.:22:34.

over the court of the bank, and have had, historically.

:22:35.:22:41.

The honourable gentleman is making a powerful point. Does he not agree

:22:42.:22:47.

that, if it must be significant that the peripheral areas of these

:22:48.:22:52.

nations, their economic performance is also peripheral, and that was

:22:53.:22:59.

Isley goes to his point -- precisely goes to his point. I could not agree

:23:00.:23:05.

more. If you look at the long history of the regions of the UK and

:23:06.:23:11.

the nations, Scotland, Wales, northern England and Northern

:23:12.:23:16.

Ireland, they have suffered in the deflationary cycle because interest

:23:17.:23:20.

rates were set to control inflation that was triggered by the City of

:23:21.:23:24.

London and over lending by the City of London. The result was that the

:23:25.:23:29.

North- South divide was a deflationary line with the nations

:23:30.:23:32.

of the North and the regions of the North of England suffering high

:23:33.:23:37.

interest rates which will not germane to their economic problems,

:23:38.:23:42.

but UK interest rates, most of the post-war period, on average, have

:23:43.:23:45.

been higher than the rest of Europe simply to control and curb over

:23:46.:23:50.

lending by the City of London. The result is that in the industrial

:23:51.:23:54.

regions there was deflation. That might have been mitigated to some

:23:55.:23:58.

extent, if there had been broader representation of the nations and

:23:59.:24:02.

its industries on the bleeding bodies of the Bank of England. And I

:24:03.:24:06.

think we need to -- the leading bodies. I think we need to move in

:24:07.:24:13.

that direction. The court, let me remind on board members, is not the

:24:14.:24:19.

institution of the bank that makes monetary policy or fiscal policy. It

:24:20.:24:24.

has oversight over the whole of the bank 's operations in a sense of

:24:25.:24:27.

getting value for money and above all ensuring that there is not

:24:28.:24:30.

groupthink between the different committees that make operational

:24:31.:24:36.

policy. That is why I think, at that level, we need to begin and at that

:24:37.:24:41.

level we need wider representation on the court. Surprisingly, and I

:24:42.:24:48.

raised this previously, actually, this exists to a small degree,

:24:49.:24:55.

because since World War II, traditionally, a trade union

:24:56.:24:57.

representative has always been on the court of the Bank of England.

:24:58.:25:04.

And still is, to this day. So even the government, successive

:25:05.:25:07.

governments, have recognised that on the court, you can have wider

:25:08.:25:12.

representation, wider social representation. When I put it to

:25:13.:25:17.

ministers that, if they rejected the notion of a court that had a wider

:25:18.:25:21.

representation of the economy, if they rejected that, were they going

:25:22.:25:27.

to move to remove Trajan representation? There was a

:25:28.:25:31.

deafening silence from ministers. That is why I am putting the

:25:32.:25:34.

question again, because if you access the principle that there

:25:35.:25:37.

should be trade union representation, and there should,

:25:38.:25:40.

then you should widen that, which is what I am asking for. I have

:25:41.:25:46.

carefully presented the new clause not to suggest that the court should

:25:47.:25:56.

be federal, somebody representing this and that, but simply that we

:25:57.:26:00.

need a balance, and anybody who has sat on the board of a company knows,

:26:01.:26:05.

the first thing you do is to create some representation of different

:26:06.:26:07.

skills and interests, so that the board can Act as a collective. My

:26:08.:26:14.

point is that the court, and to some extent the new committees do not Act

:26:15.:26:22.

as collectives, they are in danger, because of the power we have given

:26:23.:26:26.

to the Bank of England, beginning to Act with the kind of hubris that

:26:27.:26:32.

central banks, when they get too much power, begin to wield, they

:26:33.:26:35.

begin to think they know that the thing, when they don't. We need

:26:36.:26:39.

democratic accountability in the Bank of England, not in the sense

:26:40.:26:44.

that the Bank of England understands it, but that the nation understand

:26:45.:26:47.

this and the nations of the UK understand it, which is why I have

:26:48.:26:50.

been pressing this particular clause. Madam Deputy Speaker, we

:26:51.:26:55.

have made some progress in this Bill. I feel that the progress has

:26:56.:27:00.

been to discover more what we need to do in improving regulatory

:27:01.:27:03.

structures of this economy, but at least there is more, the debate is

:27:04.:27:09.

more open on where we go next, and where we go next is more

:27:10.:27:15.

accountability. This bill makes a down payment on that accountability,

:27:16.:27:19.

it does not deliver it. That is where we go next. Thank you very

:27:20.:27:25.

much, Madam Deputy Speaker. Obviously, in the new landscape of

:27:26.:27:34.

the city, the head of the Financial Conduct Authority is an extremely

:27:35.:27:37.

important post. And therefore, who fulfils it is absolutely vital. I am

:27:38.:27:44.

extremely pleased with the changes that have been agreed this

:27:45.:27:47.

afternoon, and which the Minister announced from the dispatch box

:27:48.:27:52.

which opens the process up and gives the Treasury Select Committee a

:27:53.:27:57.

proper role, and will, we hope, reinforced the independence of that

:27:58.:28:01.

person. Another person with considerable independence is of

:28:02.:28:04.

course the control and Auditor General. I am pleased that we have

:28:05.:28:11.

got away from the idea that the court should decide which part of

:28:12.:28:15.

the bank 's homework that the control and Auditor General should

:28:16.:28:19.

be allowed to march. There is obviously a parallel here with the

:28:20.:28:25.

role that the FDA has with the BBC. At second reading, we asked Treasury

:28:26.:28:31.

ministers to publish the memorandum of understanding. They have now

:28:32.:28:35.

published that document. It is an extremely useful document because

:28:36.:28:39.

what it does is set out, in advance, and agreed framework for the re-met

:28:40.:28:54.

of the C, and that presents is -- prevents others seeing political

:28:55.:28:59.

interference or inappropriate avoidance of scrutiny of particular

:29:00.:29:07.

areas of the bank's work. I would like to speak about new clause 13,

:29:08.:29:15.

standing in my name, which would make the Bank of England subject to

:29:16.:29:20.

the Freedom of Information Act. It seems to me the Bank of England is a

:29:21.:29:26.

public authority and it is carrying out public policy purposes. So the

:29:27.:29:33.

case, surely, the case for covering it doesn't mean to be made. It is

:29:34.:29:37.

the case against it being covered that needs to be made. And the

:29:38.:29:42.

Minister mentioned important points in her speech about why she has not

:29:43.:29:49.

been minded to access the new clause 13, and I would like to respond to

:29:50.:29:54.

what she said. She picked out three areas in particular. Monetary

:29:55.:29:58.

policy, financial operations and private angling. Now, I'll --

:29:59.:30:05.

banking. I am not entirely sure of all the detail of the Freedom of

:30:06.:30:11.

Information Act, but we all know that local authorities are FOI-able.

:30:12.:30:22.

We know that when you put in Freedom of Information requests to local

:30:23.:30:26.

authorities, we are not able to see the personal report on individual

:30:27.:30:29.

members of staff in those local authorities. So the Freedom of

:30:30.:30:34.

Information Act is not an Act which gives access to this kind of

:30:35.:30:38.

personal information. I would have thought that the same approach would

:30:39.:30:45.

be, would exempt the private banking work of the Bank of England. She

:30:46.:30:53.

also spoke about monetary policy and financial operations. Now, I do not

:30:54.:30:57.

believe that the amendment which I have put down today would run into

:30:58.:31:05.

that area of the bank 's work, and this is because it would, those

:31:06.:31:10.

parts of the bank's work would still be protected by section 29 .1 of the

:31:11.:31:21.

2000 Act. This states, information is exempt information if it is

:31:22.:31:26.

disclosure under this Act would or would be likely to prejudice the

:31:27.:31:31.

economic interests of the United Kingdom or any part of the United

:31:32.:31:34.

Kingdom or the financial interests of any of the administration in the

:31:35.:31:39.

United Kingdom, blah blah blah. I would of thought that as long as we

:31:40.:31:45.

are not amending section 29 of the Act, we would be able to protect the

:31:46.:31:50.

things that the minister was particularly concerned about. The

:31:51.:31:56.

reason I was alerted to this was because of the letter which the

:31:57.:32:04.

Minister herself waved to us in the Chamber in June, which the Governor

:32:05.:32:10.

had written about the sale of RBS shares. I am sure the Minister

:32:11.:32:18.

remembers the occasion very well. In his letter, the Governor said that

:32:19.:32:23.

it was his view that the public interest would be served by

:32:24.:32:31.

beginning to retain RBS -- return RBS to private ownership. Writing

:32:32.:32:37.

this letter was not part of the government financial policy,

:32:38.:32:39.

Prudential policy, it was an intervention in government policy at

:32:40.:32:44.

the Chancellor's request on the issue of a share sale. When the

:32:45.:32:50.

government came before the Treasury Select Committee I ask him about

:32:51.:32:54.

this, and I asked him whether he would share the analysis which

:32:55.:33:00.

underlay the letter which he had written, and he refused point-blank

:33:01.:33:04.

to do so. I am not going to read out the full exchange I had with the

:33:05.:33:08.

Governor on that occasion because I went into that at second reading and

:33:09.:33:14.

it is on the record twice now. But I really feel that, in refusing to

:33:15.:33:23.

give the underlying analysis, the Governor is invading public scrutiny

:33:24.:33:29.

of what is a perfectly proper matter for the public to understand. In the

:33:30.:33:35.

letter, he said, are phased return of RBS to private ownership would

:33:36.:33:39.

promote financial stability, more competitive banking sector and the

:33:40.:33:47.

interests of the wider economy. " None of this is true. It will not

:33:48.:33:50.

promote a more competitive banking sector. We are hoping of course that

:33:51.:34:03.

the Comptroller and Auditor General will secure this analysis but I

:34:04.:34:09.

think a more straightforward way to deal with this which, because the

:34:10.:34:17.

share sales in particular are an issue, the C always looked into

:34:18.:34:21.

share sales, so be might get at the truth on this one occasion, but I am

:34:22.:34:26.

sure there will be other, similar loopholes, and I really do feel that

:34:27.:34:31.

the topicality of seeing this analysis was further undermined last

:34:32.:34:37.

June by the interview in the Financial Times given by Sir

:34:38.:34:41.

Nicholas MacPherson on his retiring from the Treasury, in which he

:34:42.:34:47.

described the sale of more shares from RBS as "Tricky", and he went on

:34:48.:34:53.

to say, "There is a judgment to be made over whether to sell further

:34:54.:34:57.

shares below the 2008 purchase price", so clearly, these are not

:34:58.:35:04.

straightforward matters. They do not fall within the normal room at the

:35:05.:35:10.

Bank of England. They are of public policy significance. They are but

:35:11.:35:13.

one of why it is inappropriate for the Bank of England to be subject --

:35:14.:35:18.

why it is appropriate or the Bank of England to be subject to the Freedom

:35:19.:35:25.

of Information Act. I would like to speak to the amendments in my name

:35:26.:35:30.

in this group, has been clauses five, six, seven and eight. You will

:35:31.:35:34.

be glad to hear that I am going to be as brief as possible because I am

:35:35.:35:38.

desperate to get to the third briefing so that we can have a vote

:35:39.:35:42.

on those. My amendments aim to achieve two things, firstly to

:35:43.:35:49.

secure justice for my country in the formulation of monetary policy and

:35:50.:35:56.

to let that policy better reflect the evolving UK. These are probing

:35:57.:36:00.

amendments and I wish to draw the government's attention to them again

:36:01.:36:03.

cause these are points the government should go away and look

:36:04.:36:07.

at and come back with its own proposals and future given the

:36:08.:36:11.

legislative programme that appears before the House these days. I was

:36:12.:36:15.

glad to hear that Labour are holding a review into these issues and look

:36:16.:36:20.

forward to reading its findings although it would have been handy

:36:21.:36:24.

had it been prepared in advance, and we had been able to discuss these

:36:25.:36:31.

issues during this bill today. The first of my new clauses proposes a

:36:32.:36:35.

change in the name centre of the bank. We believe that the name of

:36:36.:36:40.

the bank should be changed. The Bank of England is the UK Central Bank

:36:41.:36:44.

and time this was reflected to a greater degree not only in its name

:36:45.:36:46.

but also in its structures and practices. This is undoubtedly a

:36:47.:36:52.

contentious issue for me as a proud Welshman that the Central Bank that

:36:53.:36:57.

the sides monetary policy in Wales is named after another country. The

:36:58.:37:02.

Bank of England was created in 1694, before the present British state was

:37:03.:37:07.

disrupted. Wales was annexed in 1536, Scotland in 1707, and Ireland

:37:08.:37:14.

in 1801. The Central Bank was treated to serve a bloody good

:37:15.:37:17.

entity composed of only Wales and England and the fact that Wales was

:37:18.:37:22.

omitted from the title reflects the inferior status that my country

:37:23.:37:26.

enjoyed in 1694 post-op many of those present in the debate will

:37:27.:37:33.

have heard that my schoolboy hero, Sir Ian Botham, on the daily

:37:34.:37:37.

politics yesterday, said that England is an island, and we should

:37:38.:37:39.

be proud. I was going to say, if only! Despite

:37:40.:37:56.

dubious geographical knowledge this is a continuing mistake suffered by

:37:57.:38:00.

those other nations at the hands of those who confuse England with a

:38:01.:38:03.

larger entity. The injustice persist in cricket with Wales denied a

:38:04.:38:10.

national team in our own right, and other nations denied representation

:38:11.:38:14.

on the central bank. If the British state is a partnership of equals in

:38:15.:38:17.

all institutions must reflect that reality. Including the most

:38:18.:38:23.

important institution underpinning the financial system, the central

:38:24.:38:27.

bank. My suggestion is that it should be the Sterling central bank,

:38:28.:38:35.

reflecting the reality we live in, and showing that those in this place

:38:36.:38:38.

genuinely believe in a respect agenda and partnership of equals. My

:38:39.:38:42.

honourable friend from East Lothian has a similar amendment to that

:38:43.:38:48.

effect and I of course will vote in favour if he is minded to press it

:38:49.:38:57.

to a division. I seek to is your representation of the formations on

:38:58.:39:08.

the monetary policy committee. -- ensure. Full income tax devolution

:39:09.:39:14.

to Scotland, or partial income tax devolution to Wales, even though I

:39:15.:39:17.

believe we should have symmetric evolution of powers, the trajectory

:39:18.:39:24.

is clear nevertheless. Fiscal responsibility combined with a

:39:25.:39:26.

genuine no detriment fiscal framework increases accountability

:39:27.:39:36.

of devolved governments and incentivise them to boost economic

:39:37.:39:39.

performance to invest in public services. The coordination of

:39:40.:39:44.

monetary and fiscal policy is vital in any economic policy. Obviously

:39:45.:39:50.

the central bank is independent but there is undoubtedly coordination

:39:51.:39:52.

with the Treasury is with the expected. -- as would be. Similar

:39:53.:40:02.

protocols need to be developed with Scottish and Northern Irish

:40:03.:40:04.

Exchequer is. National parliaments should nominate to ensure those

:40:05.:40:10.

involved in the process have an understanding of conditions and

:40:11.:40:13.

events in Wales, Scotland, and Northern Ireland.

:40:14.:40:18.

Is he aware that in the USA the central bank is called the Federal

:40:19.:40:22.

Reserve for the very simple reason that it it is appointed federally,

:40:23.:40:29.

and the rate-setting committee is a federal committee? So the principle

:40:30.:40:33.

is well established in other jurisdictions.

:40:34.:40:40.

I read full to my honourable friend for that point, I fully agree. -- I

:40:41.:40:46.

am grateful. And to go back to the point made earlier the North- South

:40:47.:40:50.

divide and the effect of policy on that reality, it is no surprise that

:40:51.:40:56.

the UK is the most grotesquely in equal stake in the EU in terms of

:40:57.:41:03.

geographical wealth, and one of the main reasons is that for far too

:41:04.:41:07.

long monetary policy has been determined in the interests of a

:41:08.:41:10.

very small part of it, the Square mile just down the Thames. All

:41:11.:41:17.

members are currently bank staff or one of the four positions nominated

:41:18.:41:21.

by the Treasury. Fittingly, there are four Mac countries in the UK,

:41:22.:41:24.

which should make it ripe for modification. Following on from this

:41:25.:41:33.

I am very interested in the emerging debate on changing the remit of the

:41:34.:41:37.

MPC, in regard of setting interest rates. Clause seven in my name seeks

:41:38.:41:43.

to expand the objective is to include maximum employment. It is

:41:44.:41:49.

already charged with keeping an inflationary target of 2%. Other

:41:50.:41:54.

central banks such as the Federal Reserve, returning to our earlier

:41:55.:41:57.

exchange, have a dual mandate, going and inflation. In 1977 the US

:41:58.:42:03.

Congress amended the 1913 Federal Reserve act and mandated it to

:42:04.:42:10.

tackle long-term interest rates and, critically, maximum employment, as

:42:11.:42:15.

well as inflation. I take as interest the point made by the

:42:16.:42:18.

Minister that the bank does consider government targets in terms of

:42:19.:42:23.

employment, but there is a difference between employment

:42:24.:42:26.

targets and a mandate for maximum, or rather, from employment. Clause

:42:27.:42:35.

eight in my name seeks to bring accountability to Wales and other

:42:36.:42:39.

devolved government. The British state is rapidly changing as powers

:42:40.:42:44.

and responsibility flow from Westminster to devolved countries,

:42:45.:42:47.

although the pace is not as quick as I would want. We are not privy to

:42:48.:42:50.

meetings between the Treasury Minister and his senior team but can

:42:51.:42:56.

safely assume they are frequent. In regard of parliamentary scrutiny, in

:42:57.:42:59.

this place, the governor and his team meet the Treasury Select

:43:00.:43:03.

Committee at least five times a year. As I mentioned a moment ago

:43:04.:43:09.

fiscal powers are already afoot in the devolved nations with more

:43:10.:43:14.

planned. I hope that the central bank and Treasury agreed that it is

:43:15.:43:18.

in their interest to strengthen the relations between the central bank

:43:19.:43:23.

and the devolved government and Parliament. I am not aware of any

:43:24.:43:30.

structure of meetings for ministers of devolved governments, not least

:43:31.:43:34.

scrutiny of the central bank, by the devolved parliaments. In the

:43:35.:43:41.

interest of mutual respect those structures need to be formalised.

:43:42.:43:50.

I had thought I would come along this afternoon to listen, but I have

:43:51.:43:57.

been stung into action by the Minister, particularly by her

:43:58.:44:00.

comment in relation to new clause three, and two. Allow me to start

:44:01.:44:07.

by... I thank my friend for allowing me to

:44:08.:44:14.

intervene. Does he share my sense of regret and bewilderment that the

:44:15.:44:16.

government can so casually dismissed the proposal to end? And does he not

:44:17.:44:26.

agree it is disingenuous of the Conservative government to talk on

:44:27.:44:29.

one hand of a respect agenda embracing the contribution of all

:44:30.:44:33.

the nations of the UK, and yet at the first opportunity it has to

:44:34.:44:37.

recognise that contribution, it refuses to do so and insist that

:44:38.:44:42.

only England should be in the name of this most significant

:44:43.:44:46.

institution? I agree Talia and I think it is

:44:47.:44:49.

fitting that makes the point that this time. -- agree entirely. As my

:44:50.:44:58.

honourable friend pointed out earlier the Bank of England now is a

:44:59.:45:01.

very different kind of bank from that which it was a a few short

:45:02.:45:06.

years ago, it has a more political role, it makes decisions which have

:45:07.:45:11.

a wider impact than before, and surely in that regard the name needs

:45:12.:45:15.

to reflect the impact its decision-making has. The second

:45:16.:45:21.

reason he is entirely correct is because of the changed political

:45:22.:45:25.

climate in the UK. Not just his good self, but the honourable member also

:45:26.:45:34.

made a similar point about the need to recognise the role of Wales in

:45:35.:45:39.

this. This is an important point, not flimsy, at fundamental, for

:45:40.:45:45.

people who want to see that we have a central and important institution

:45:46.:45:48.

that has proper regard for the whole of the nation. All donations that it

:45:49.:45:59.

seeks to serve. -- all the nations. I was looking a short time ago at

:46:00.:46:02.

the Court of directors of the Bank of England, all 11 of them. If you

:46:03.:46:09.

followed that representation you would be inclined to rename the

:46:10.:46:13.

bank, the bank of the City of London. Because it gives a very

:46:14.:46:21.

little proper representation to, not just the nations of the UK, but the

:46:22.:46:29.

regions also. I enjoyed the analogy made earlier by the honourable

:46:30.:46:42.

member for, the cricket analogy, I have some interest in it, I think

:46:43.:46:45.

the Honourable member pointed out that it is the cricket board of

:46:46.:46:52.

England and Wales. As someone who was born not far from where I was

:46:53.:47:00.

born, in Scotland, the one-time became the captain of the England

:47:01.:47:04.

cricket team. Some years ago. Showing my vintage again. I think we

:47:05.:47:12.

have to have proper regard to all of the nations represented in the

:47:13.:47:22.

United Kingdom. I was also stung by the comment of the Minister, when

:47:23.:47:28.

she said that the Bank of England represents, and has always

:47:29.:47:33.

represented, the whole of the UK. I don't think that is true at all, in

:47:34.:47:38.

its policy-making. I think the Honourable member for Bishop

:47:39.:47:42.

Auckland, and the member for East Lothian, made a very telling points,

:47:43.:47:47.

when they pointed out of the way in which it has undue regard for one

:47:48.:47:55.

part of the United Kingdom. Prior to 2008 many commentators would say

:47:56.:47:57.

that the interest rate setting policy of the bank paid and you

:47:58.:48:01.

regard to the City of London and surrounding areas -- and

:48:02.:48:16.

undue regard, and too little regard to Scotland, Northern Ireland, and

:48:17.:48:27.

the like. Representation for the nations that make up the UK, indeed,

:48:28.:48:31.

a short time ago, I had a quick look on the Internet at who the esteemed

:48:32.:48:38.

figures are. Unless I am subsequently proven to be incorrect,

:48:39.:48:45.

or the Internet is incorrect, one of the directors of the Court of the

:48:46.:48:48.

Bank of England is also a nonexecutive director of the FCA.

:48:49.:48:55.

This is the type of interlocking directorships that I do not think

:48:56.:49:00.

serve the economic policy, the financial sector, well. Do we have

:49:01.:49:05.

such a tiny pool of people who are point -- who we are able to point,

:49:06.:49:17.

but we have to have them represented by the same directors? I think that

:49:18.:49:20.

is not a sign of strength in the way we're going at the moment, but a

:49:21.:49:27.

position extreme weakness. Why are these things important? Again in the

:49:28.:49:31.

Honourable member for East Lothian mentioned a word that has cropped up

:49:32.:49:35.

many times and committed discussions, and that is the

:49:36.:49:39.

importance of avoiding groupthink. It is seen in many studies is part

:49:40.:49:43.

and parcel of the Ford decision-making that contributed to

:49:44.:49:50.

the crash of 2008. If you want to avoid groupthink you need to have

:49:51.:49:57.

people willing to think differently. Willing to put down the critical

:49:58.:50:02.

questions. A chairman who is willing to seek out those with alternate

:50:03.:50:06.

views. I do not see it happening today. I remember some years ago I

:50:07.:50:12.

was sitting, observing, sitting within the confines of a company

:50:13.:50:17.

that was considering a very large proposal, and a paper was presented,

:50:18.:50:22.

and the chairman did a quick round up all the directors and said, what

:50:23.:50:27.

are your thoughts? Every single person immediately said, I think

:50:28.:50:31.

this is a really great paper, we should go with that suggestion.

:50:32.:50:37.

Everyone of them. And the chairman, being extraordinarily wise, said, I

:50:38.:50:42.

am extremely uncomfortable that we have got an immediate consensus, so

:50:43.:50:45.

I'm going to postpone this discussion until our next meeting, I

:50:46.:50:49.

want you to go away and generate critical views. That is the wise

:50:50.:50:56.

course of action. Not to be sucked into groupthink. For all those

:50:57.:51:00.

reasons I think that new clause two deserves the support of all those

:51:01.:51:03.

who do not want to replicate the mistakes of the past.

:51:04.:51:11.

Like many others in the chamber, and clearly within the Treasury Select

:51:12.:51:15.

Committee, while I welcome progress, I have serious concerns about this

:51:16.:51:24.

bill and its gradual compromising of the independence of the key

:51:25.:51:33.

regulators, the FCA, and Prudential Regulation Authority. Following the

:51:34.:51:36.

opening remarks, touched upon by many in the House including the

:51:37.:51:40.

Honourable member from East Lothian, I welcome the determination of the

:51:41.:51:44.

government that more oversight is needed in regards to the appointment

:51:45.:51:49.

of the Chief Executive of the FCA by the Chancellor. However I have

:51:50.:51:53.

concerns about the new procedures, is announced. Until the legislation

:51:54.:51:58.

is announced this is very much open for debate and I hope we do so

:51:59.:52:02.

thoroughly. Just as was touched upon by my honourable friend, another

:52:03.:52:08.

consideration would be this. Surely if the appointment is recommended to

:52:09.:52:13.

be put forward as a motion to the House the government could simply

:52:14.:52:17.

whip votes to prove the Chancellor's appointment. Select committees

:52:18.:52:20.

provide substantially more apolitical deliberation of the

:52:21.:52:25.

specialised issues. For this reason, I believe, a direct veto of the

:52:26.:52:29.

appointment needs to be considered. Issues around the Treasury Select

:52:30.:52:39.

Committee approval is even more pertinent following the appointment

:52:40.:52:42.

of Andrew Bailey, something touched on by the right honourable member

:52:43.:52:49.

for Chichester. Prior to his appointment he was the deputy

:52:50.:52:51.

director of the Prudential Regulation Authority. His move

:52:52.:52:57.

between the two regulators at the recommendation of the Chancellor

:52:58.:52:59.

leaves questions as to whether a revolving door may exist. As many in

:53:00.:53:07.

this chamber learned in the wake of the 2008 financial crisis,

:53:08.:53:12.

separation of church and state is of paramount importance when it comes

:53:13.:53:18.

to the banks. I feel the Government is ignoring this critical lesson.

:53:19.:53:22.

One may wonder about the appointment of Mr Bailey's appointment given

:53:23.:53:26.

that his predecessor was allegedly forced a you have the job by the

:53:27.:53:31.

Chancellor, according to commentators, for reportedly being

:53:32.:53:35.

perceived to be too tough on financial institutions. A lighter

:53:36.:53:41.

touch on regulation could mean that selling of Government shares in

:53:42.:53:46.

Lloyds Banking Group and RBS could be less troublesome for the

:53:47.:53:51.

Chancellor. Particularly given the capping of the losses of the

:53:52.:53:55.

mis-selling scandal. The Chancellor stated in the 2016 Budget he expects

:53:56.:54:00.

the Government to be able to sell it share in RBS for ?25 billion.

:54:01.:54:06.

Despite the fact that the Bank arranged ?9.3 billion in high yield

:54:07.:54:11.

energy loans between 2011 and 2014 alone, and its share price currently

:54:12.:54:16.

stands at roughly half of what was paid for it by the taxpayer in 2008.

:54:17.:54:21.

Clearly the Chancellor faces a serious challenge. There are two

:54:22.:54:23.

clause in this particular contained in the Bill as outlined which I

:54:24.:54:34.

believe are particularly detrimental to the maintenance... Part 2 clause

:54:35.:54:41.

18 states the Treasury is required to make recommendations regarding

:54:42.:54:47.

economic policy as it pertained to the regulator at least once a year.

:54:48.:54:53.

Part 1, 13 states the Treasury at any time can make recommendations to

:54:54.:54:57.

the Prudential Regulation Authority regarding economic policy. As it per

:54:58.:55:01.

Ince to the objectives of the PRA. That is the maintenance of stability

:55:02.:55:07.

within the financial sector. These recommendations made by the Treasury

:55:08.:55:13.

are not binding they manifest as increasing the level of political

:55:14.:55:16.

involvement in the function of the regulators which at their inception

:55:17.:55:21.

were intended to be independent of political influence. Given the

:55:22.:55:28.

recent speculation that the FC had bowed to political pressure when it

:55:29.:55:36.

abandoned a probe in 2015, these clauses are concerning to say the

:55:37.:55:40.

least. The particular reference to Part 1 clause 13, the requirement

:55:41.:55:43.

that Treasury make recommendations at least once a year to the PRC

:55:44.:55:49.

creates a greater onus of responsibility on the Treasury the

:55:50.:55:52.

remain aware of the systemic risks in the financial system. I fear that

:55:53.:55:56.

given the track record of this Government, it may well be asleep at

:55:57.:56:01.

the wheel when it comes to management of systemic risks. As I

:56:02.:56:05.

have mentioned previously This Morning chamber, this UK Government

:56:06.:56:10.

has thus far failed to address the source of substantial systemic risks

:56:11.:56:13.

inherent in the financial system and the wider economy, that of leveraged

:56:14.:56:17.

lending to the oil and gas sector, by British banks and US banks active

:56:18.:56:23.

in the UK market. And the slice and dice repackaging of these loans into

:56:24.:56:28.

derivative products, which are sold to investors. Numerous publications

:56:29.:56:34.

have warned for the moment with the stagnation price of oil this

:56:35.:56:38.

structure poses serious risks. With the Financial Times reporting in

:56:39.:56:42.

December 2024, there's a stark parallel with the US property market

:56:43.:56:47.

collapse that heralded the start of the 2008 global financial crisis

:56:48.:56:53.

and... Along the way. There are already signs that the first

:56:54.:56:57.

dominoes may be falling, as default rates on these high yield loans are

:56:58.:57:03.

rising at a startling rate. Wells Fargo said 57% of its loans in its

:57:04.:57:11.

energy portfolio were categorised as at risk of default. Based on these

:57:12.:57:16.

figures 24 billion of which is at risk of default. UBS analysts have

:57:17.:57:26.

put sales notices on Wells Stock. In the United States the Federal

:57:27.:57:29.

Reserve has stepped up its review into lending which could lead to

:57:30.:57:34.

systemic risks. However, the systemic risk involved This Morning

:57:35.:57:38.

lending has been ignored by the Conservative Government here.

:57:39.:57:41.

Political influence on the regulators was a key factor as

:57:42.:57:47.

touched on earlier and the failure of the regime to predict the

:57:48.:57:51.

financial sector and the wider economy to the systemic risk which

:57:52.:57:59.

led to the 2007-08 crisis. This Government has unable to acknowledge

:58:00.:58:01.

systemic risks which is so apparent to so many in the industry today. In

:58:02.:58:05.

relation to the composition of the Court of Directors of the Bank of

:58:06.:58:09.

England, news clause 2, if the Government truly beliefs in one

:58:10.:58:16.

nation Conservatism, new clause 2 should be incorporated. Finally,

:58:17.:58:20.

Madam Deputy Speaker, this Bill has outlined a serious potential to

:58:21.:58:25.

weaken the UK rectory regime and compromise the independence of the

:58:26.:58:30.

regulators, bring us back to a system where banks are seen to be

:58:31.:58:34.

too big to fail. Otherwise known as business as usual. Thank you Madam

:58:35.:58:36.

Deputy Speaker. Thank you Madam Deputy Speaker, I

:58:37.:58:44.

think I will perhaps leave on one side the remarks of the last

:58:45.:58:49.

speaker, because I don't recall him participating in the debate at

:58:50.:58:54.

second reading or at committee or earlier today. I think it doesn't

:58:55.:58:59.

reflect the full view of other parties This Morning House that

:59:00.:59:04.

actually this Bill is a very good Bill. In the words of the Chair of

:59:05.:59:09.

the Treasury Select Committee. But what I would like to do, Madam

:59:10.:59:14.

Deputy Speaker, is respond to some of the points that have been raised

:59:15.:59:19.

in this section of the debate. In particular to put on record how

:59:20.:59:25.

pleased I am that everyone welcomes the Government's new clause 12,

:59:26.:59:31.

which is supplemented by the text of the letter from the Chancellor to

:59:32.:59:35.

the Chair of the Treasury Select Committee, which was sent earlier

:59:36.:59:40.

today and which I read out in my opening remarks. I think this has

:59:41.:59:46.

been an important opportunity to put on record how our amendment

:59:47.:59:53.

recognises the important scrutiny role provided by the Treasury Select

:59:54.:59:57.

Committee and would also put on record the important role that this

:59:58.:00:04.

House has in scrutinising the executive. It is an opportunity

:00:05.:00:09.

again for us to emphasise the importance, the necessity even, of

:00:10.:00:16.

preserving the independence of the FCA chief executive, in terms of

:00:17.:00:20.

their operational role, apart from Government. And the amendment that

:00:21.:00:25.

we have tabled today reaffirms that commitment to continued independence

:00:26.:00:31.

of the FCA. It is absolutely vital that consumers and firms know that

:00:32.:00:36.

regulatory decisions are being taken in an objective and impartial way.

:00:37.:00:41.

The FCA is an operationally independent regulator. It must carry

:00:42.:00:45.

out its functions in line with the framework of objectives and duties

:00:46.:00:49.

established in statute. And the independence of that executive is

:00:50.:00:53.

protected by statute with clear provisions requiring the terms of

:00:54.:00:57.

appointment to be such that the appointee is not subject to the

:00:58.:01:01.

direction of the Treasury or by any other person. And throughout their

:01:02.:01:11.

appointment, the FCA cheer economic is scrutinised to ensure their

:01:12.:01:14.

continued independence. It was notable Madam Deputy Speaker that

:01:15.:01:18.

during the course of this debate nobody was able to point to anything

:01:19.:01:24.

in terms of the allegations that have been made in the press in terms

:01:25.:01:30.

of operational interference. I look forward to hearing the Treasury

:01:31.:01:33.

Select Committee's report, because I though they have done a thorough

:01:34.:01:37.

investigation into this matter. The amendment that we've tabled today

:01:38.:01:41.

ensures that the Treasury Select Committee always has time to

:01:42.:01:45.

scrutinise an appointee before they get their feet under the desk. I

:01:46.:01:51.

have also put on record that once appointed, the legislation is very

:01:52.:01:57.

clear. The Government absolutely cannot dismiss an FCA CEE save in

:01:58.:02:01.

the limited circumstances that are set out in statute. I won't read out

:02:02.:02:07.

again, Madam Deputy Speaker, the schedule 1 ZA to the financial

:02:08.:02:11.

services and markets Act 2000, paragraph 4, but I referred to it in

:02:12.:02:18.

my opens remarks. It applies not only to the CEO but also to the

:02:19.:02:25.

Chair and to the external members as well. In hearing from the right

:02:26.:02:31.

honourable member Chichester in terms of his reaction and his

:02:32.:02:35.

decision to withdraw his new clause 1, he asked a couple of further

:02:36.:02:42.

questions. He asked about whether he could expect that the legislation to

:02:43.:02:47.

outline the five-year term would be in the next session. As he knows, he

:02:48.:02:55.

has our commitment to find an early opportunity to put this into

:02:56.:03:01.

legislation. Indeed, he himself is aware of the strictures that do

:03:02.:03:07.

exist in terms of writing round and getting cabinet agreement. He has

:03:08.:03:12.

that now from the dispatch box. He asked whether the legislation is

:03:13.:03:15.

permanent. That's a very good question to ask. Of course, when we

:03:16.:03:20.

legislate, it is possible that it becomes permanent, but it is also

:03:21.:03:24.

permanent of course for future Government and for future houses of

:03:25.:03:29.

Commons, indeed future Treasury Select Committees to change

:03:30.:03:32.

legislation, so I will make that point. Will the Minister give way? I

:03:33.:03:38.

will on that point. I'm grateful to the more for what she has been

:03:39.:03:42.

saying. The clarification that I'm seeking is that the arrangement, but

:03:43.:03:47.

not the legislation so much, which of course stands or falls like any

:03:48.:03:54.

legislation, the arrangement put in place between the Treasury committee

:03:55.:03:58.

and the Treasury, the Chancellor today and the exchange of letters,

:03:59.:04:02.

will be made permanent. It is intended that that should be a

:04:03.:04:15.

permanent arrangement. Well, as he as the Chancellor says, it is not to

:04:16.:04:20.

ensure permanence, but I can assure him that it is his intention that it

:04:21.:04:25.

remains the case for the length of time that he is able to exert pour

:04:26.:04:28.

and influence over that particular issue. So I hope that answers the

:04:29.:04:34.

question in the spirit in which it is asked. In terms of the points

:04:35.:04:39.

raised by the honourable gentleman from Leeds East, he asked me to

:04:40.:04:45.

clarify that the NAO can look at the bank's success at meeting their

:04:46.:04:50.

Octoberives but not necessarily the desirability of the objectives

:04:51.:04:53.

themselves. Very already said that's exactly what this Bill achieves. The

:04:54.:04:58.

arrangements set out in the Bill have been agreed by the Comptroller

:04:59.:05:01.

and Auditor General and the Governor, and the terms of reference

:05:02.:05:06.

have been made available to the House. The Comptroller and Auditor

:05:07.:05:11.

General is content that the scope of his powers are appropriate and the

:05:12.:05:15.

bank is content they do not go too far. He asked whether the bank

:05:16.:05:19.

should have practitioner representation. The PRA has a

:05:20.:05:25.

practitioner panel which ensures the interests of those are communicated

:05:26.:05:32.

to the PRA. This panel includes representatives of banks, insurers,

:05:33.:05:34.

building societies and credit unions, all of whom widely read his

:05:35.:05:40.

new favourite publication, the City AM. And consumest have an input

:05:41.:05:45.

through the FCA consumer panel, which has a statutory right to make

:05:46.:05:50.

representations to the PRA. The honourable lady from Bishop Auckland

:05:51.:05:54.

asked about the Bank of England and the extent to which it is subject to

:05:55.:05:58.

the FOI Act. To be clear, it is thanks to this Bill that the bank is

:05:59.:06:05.

subject to the FOI Act. There are three specificed exclusions to the

:06:06.:06:10.

Act as it applies to the bank, which as I have explored, explained

:06:11.:06:13.

earlier are entirely sensible. Indeed the Bank of England isn't

:06:14.:06:17.

alone in having particular elements of its work carved out from the Act.

:06:18.:06:28.

Other organisations with specific exclusions include S4/C in Wales,

:06:29.:06:32.

the Competition Commission and the BBC. To her question about the

:06:33.:06:38.

Governor's analysis for supporting selling RBS shares at prices

:06:39.:06:43.

substantially above where shares are trading today, the Governor has

:06:44.:06:49.

explained his analysis is based on confidential information obtained as

:06:50.:06:53.

part of the supervisory responsibilities, where there is a

:06:54.:06:58.

standard exemption in the Freedom of Information Act. The honourable

:06:59.:07:03.

Member for East Lothian, he said the Bill had a lot to be commended. He

:07:04.:07:08.

asked about the range of expertise and perspectives on the court. He

:07:09.:07:13.

raises rt. He raises an interesting philosophical question - in the past

:07:14.:07:16.

the court has been a much larger organisation. Certainly in the views

:07:17.:07:21.

of the Treasury Select Committee, an unwieldy organisation with 19

:07:22.:07:23.

members, but it should represent the views of the entire UK. All members

:07:24.:07:27.

should consider the whole UK rather than acting as a representative of a

:07:28.:07:31.

particular part of the UK. He seems to have forgotten our exchange at

:07:32.:07:35.

committee in which we talked about the trade union representation of

:07:36.:07:39.

the court. I assured him we have not said anything in the passage of this

:07:40.:07:43.

Bill that would change that post war reality. Reality. Reality. Each each

:07:44.:07:47.

the committees of the Bank of England will have a strong ex-term

:07:48.:07:50.

representation and no external member will be able to serve on more

:07:51.:07:54.

than one of which the policy committees at the same time. This

:07:55.:07:58.

answers some of the questions raised by the Member for Kirkcaldy and

:07:59.:08:02.

Cowdenbeath in terms of group think. By legislating for each to which

:08:03.:08:08.

committees and providing that the statutory duties and can be

:08:09.:08:13.

exercised in no other way we empower the varied perspectives of the

:08:14.:08:15.

external members on each. It adds up to a set of protections

:08:16.:08:26.

for oversight that mitigates the risk of just one view emerging from

:08:27.:08:29.

the court or any other bank's committees. Further to the speech

:08:30.:08:34.

from the honourable gentleman from Carmarthen East, and if he wants to

:08:35.:08:39.

get in touch himself, the bank's regional representation in Wales,

:08:40.:08:44.

his agent, Steve Hakes, and deputy agent Ian Derek, I hope he will take

:08:45.:08:48.

the opportunity to do that. Does he wish to ask further questions? I am

:08:49.:08:53.

grateful to the Minister for giving way. She will have heard the

:08:54.:08:57.

heartfelt concerns of those representatives of Wales, Scotland

:08:58.:09:00.

and Northern Ireland in relation to the accountability back to the

:09:01.:09:06.

devolved governments. Would she at least it to a Treasury report or

:09:07.:09:10.

request the Bank of England to put out a report on how they aim to

:09:11.:09:14.

improve their account ability and relations with devolved governments

:09:15.:09:18.

in Parliament? There are a range of different ways, particularly with

:09:19.:09:22.

membership of the Treasury Select Committee in this house, having a

:09:23.:09:29.

member from Scotland, a range in ways this can happen, we welcome the

:09:30.:09:33.

fact that the very coins we have in our pockets are minted in the great

:09:34.:09:37.

country of Wales. In terms of his question about the Federal Reserve

:09:38.:09:43.

's dual mandate, he identified the Federal Reserve as the example of a

:09:44.:09:49.

bank that adopts a dual mandate. US policymakers judged that right for

:09:50.:09:54.

them. We believe the stability of price is important for anchoring

:09:55.:09:57.

inflation expectations and we are joined by other central banks,

:09:58.:10:00.

including those in Canada, New Zealand and the ECB. I think that I

:10:01.:10:07.

have have the opportunity to respond to a range of issues raised in this

:10:08.:10:10.

party for debate, and I would like to commend the government's new

:10:11.:10:18.

clause to the house and hope it will agree to include that in the bill.

:10:19.:10:25.

The question is that new Clause 12 be read a second time. I think the

:10:26.:10:36.

ayes have it. The question is that the new Clause 12 be added to the

:10:37.:10:43.

bill. I think the ayes have it, the eyes have it. We now come to Clause

:10:44.:10:46.

2. As many of that opinion say aye?

:10:47.:10:52.

Division! Clear the lobby. The question is that the new Clause

:10:53.:12:27.

2 be read a second time. That opinion, say aye.

:12:28.:19:02.

MADAM DEPUTY SPEAKER: Order. The eyes to the right, 246. The noes to

:19:03.:24:33.

the left, 303. Speaker peerk the eyes to the right

:24:34.:24:46.

246, the noes to the left, 303, the noes have it, the noes have it.

:24:47.:24:53.

Unlock. We now come to new clause 9, with which it will be convenient to

:24:54.:24:56.

consider the new clauses and amendments listed on the selection

:24:57.:25:02.

paper. Mr Charles Walker to move. Madam Deputy Speaker, thank you very

:25:03.:25:06.

much. I rise to move new clause 9, which seeks to prevent the

:25:07.:25:10.

restriction or withdrawal of banking services from potentially tens of

:25:11.:25:14.

thousands of people. People that include soldiers and those serving

:25:15.:25:20.

in the armed forces, judges, civil servants, trade unionists, local

:25:21.:25:23.

councillors and their officials, because these people along with

:25:24.:25:27.

their family and associates are deemed to be politically exposed

:25:28.:25:34.

persons for the purposes of the fourth money laundering directive,

:25:35.:25:41.

to be put into UK law. New clause 9 is straightforward in its scope. It

:25:42.:25:46.

seeks to ensure that when exposing the money laundering directive into

:25:47.:25:50.

UK law reasonable regard is given to those parts of the directive that

:25:51.:25:54.

deal with proportionality. New clause 9 makes clear that prior to

:25:55.:25:59.

the directive's enactment the financial services and markets Act

:26:00.:26:04.

2000 is amended so that the Financial Conduct Authority is

:26:05.:26:08.

required to publish clear guidance to the banks, defining what the FCA

:26:09.:26:13.

deems to be proportionate. New clause 9 also makes regulatory

:26:14.:26:20.

provision for peps, who believe they've been treated unreasonably by

:26:21.:26:25.

their banks, to ask that their case is adjudicated by the FCA. Will the

:26:26.:26:33.

honourable gentleman give way? Can I congratulate him for bringing

:26:34.:26:37.

forward this new clause? I understand from topical questions

:26:38.:26:40.

today it is likely to be accepted by the Government, so he's is obviously

:26:41.:26:45.

in the right area at the moment. Does he also, is he also concerned

:26:46.:26:50.

that banks are actually acting in advance of this? There is quite a

:26:51.:26:54.

lot of evidence that they are already gathering information about

:26:55.:26:58.

ordinary law abiding members of the public and using that as an excuse

:26:59.:27:02.

to restrict their banking activities? The honourable gentleman

:27:03.:27:07.

makes a valid point. Banks are derisking at the moment and they are

:27:08.:27:13.

derisking very aggressively. What we need to do is inject proportion alt

:27:14.:27:18.

into their actions. I believe what I'm bringing forward today for this

:27:19.:27:24.

House to decide on will go some way in achieving that. Because what new

:27:25.:27:31.

clause 9 does is it inserts process of adjudication, so where a

:27:32.:27:36.

politically exposed person believes they are being treated unfairly,

:27:37.:27:39.

being denied access to banking services, they can take that

:27:40.:27:43.

concern, that complaint to the FCA and it can adjudicate on that and

:27:44.:27:50.

decide whether the banks are interring the directive

:27:51.:27:52.

overaggressively, and if they are can levy a fine on the bank for

:27:53.:27:54.

doing that. New clause 9 hassing New clause 9 is needed because it is

:27:55.:28:13.

clear that interpreting the money laundering directive banks are

:28:14.:28:18.

making no distinction when determine hag is a politically exposed person

:28:19.:28:23.

from those peps drawn from the hotbeds of Nigeria and the Russian

:28:24.:28:27.

subcontinent and those from developed democracies such as our

:28:28.:28:32.

own with high levels of scrutiny and accountability. May I put on record

:28:33.:28:36.

the thanks of all of enoughs the house for the diligence and the

:28:37.:28:40.

focus and the tenacity of my honourable friend for Broxbourne for

:28:41.:28:44.

bringing this massively important issue to the attention of the

:28:45.:28:48.

Government, and for what we hope will be a satisfactory conclusion

:28:49.:28:53.

today. Does he agree with me that the collateral damage of some of

:28:54.:28:58.

this precipitous action by banks has impacted on people's families, which

:28:59.:29:04.

is therefore having a big impact on their credit worthiness for the

:29:05.:29:07.

whole future? My honourable friend makes a good point. The banks have

:29:08.:29:11.

acted very aggressively in this case. I shall come on to that in a

:29:12.:29:19.

few moments in my #1350e67. Can I also the economics secretary for her

:29:20.:29:22.

time and patience in dealing with this matter? I've been speaking to

:29:23.:29:26.

her about this for four months. On occasions I've got a little

:29:27.:29:31.

overexcited, I admit, and she has always maintained high levels of

:29:32.:29:35.

good humour and patience, so I thank her for that. It is important that's

:29:36.:29:41.

put on the record. Mr Speaker, at the late stage without the

:29:42.:29:46.

intervention of new clause 9, the directive risks blighting the lives

:29:47.:29:50.

of decent people. People working in public life and service, and not

:29:51.:29:56.

just these people but, as my right honourable friend pointed out in his

:29:57.:30:01.

intervention, their partners, their spouses, their children, parents,

:30:02.:30:04.

siblings and in-laws. This is not proportionate. Even more worrying,

:30:05.:30:10.

Mr Speaker, the directive covers the close associates of politically

:30:11.:30:15.

exposed persons. I am aware that one close associate actually is a member

:30:16.:30:20.

of the press lobby and had some problems with an ISA and was subject

:30:21.:30:26.

to close questioning by his bank. When he asked the person at the end

:30:27.:30:31.

of the phone from the bank why are you conducting yourself This Morning

:30:32.:30:34.

way, the response was, because we understand that you are an associate

:30:35.:30:40.

of the Prime Minister. So even the media are caught in this directive

:30:41.:30:45.

or the banks preparing for the introduction of this directive

:30:46.:30:50.

through their derisking. The Financial Action Task Force, whose

:30:51.:30:53.

guidance underpins the directive, and is referred to in the directive

:30:54.:31:01.

repeatedly, states that and I quote, Mr Speaker, for close associates

:31:02.:31:06.

examples include the following types of relationships. I think the House

:31:07.:31:09.

needs to listen carefully to this, because it is quite an odd

:31:10.:31:15.

paragraph. Examples include the following types of relationships:

:31:16.:31:19.

Known sexual partners outside the family unit. EG girlfriends,

:31:20.:31:24.

boyfriends, mistresses. Prominent members of the same political party.

:31:25.:31:30.

Civil organisation. That could be the National Trust. Labour or

:31:31.:31:36.

employee unions as the pep. Business partners or associates, especially

:31:37.:31:41.

those that share beneficial ownership of legal entities with the

:31:42.:31:45.

pep or are otherwise connected. Mr Speaker, my fear is that without

:31:46.:31:51.

clear Government backed FCA guidance as provided for in new clause 9 the

:31:52.:31:55.

banks will continue to draw on the work of the Financial Action Task

:31:56.:31:59.

Force, which goes on the state in paragraph 37 of its 2013 guidance,

:32:00.:32:04.

there should be awareness that middle ranking and more junior

:32:05.:32:08.

official s could act on before of a pep to circumvent controls. These

:32:09.:32:12.

less prominent public function s could be appropriately taken into

:32:13.:32:16.

account as customer risk factors in the framework of the overall

:32:17.:32:19.

assessment of risks. Will my honourable friend give way? I will.

:32:20.:32:25.

I am grateful. The case he is making is so overwhelming, could he tell

:32:26.:32:29.

the House whether he is aware of anyone who is opposed to what he is

:32:30.:32:34.

trying to do? Well, I am sure there will always be people opposed to

:32:35.:32:39.

what I am trying to do, because that is the nature of society. We live in

:32:40.:32:45.

an open society where people are a different point of view on many

:32:46.:32:51.

issues. But actually what the money laundering directive should be about

:32:52.:32:55.

is capturing bad people, not capturing all people, Mr Speaker in

:32:56.:33:01.

its scope. Because if everybody's bad, then it is very difficult to

:33:02.:33:05.

identify who is actually breaking the law. We want to go after the law

:33:06.:33:11.

breakers not people who by accident are described as peps or identified

:33:12.:33:18.

as peps by banks in this country. I am obliged. Does the honourable

:33:19.:33:25.

member share my concern that the rush to implement these actions

:33:26.:33:31.

ahead of the transcription of the legislation indicates a desire by

:33:32.:33:39.

the banks to do what seems to be decisive action to a group of people

:33:40.:33:44.

who are quite easy to target? And actually they'll be less keen to do

:33:45.:33:49.

so for people who are harder to track down? I should say I know the

:33:50.:33:57.

fondness of the right honourable gentleman for East Yorkshire for

:33:58.:34:01.

live music, a fondness that I share, but there are limits.

:34:02.:34:07.

Mr Speaker, I thought it complemented the speech to which

:34:08.:34:17.

honourable member. It was like an opera singing exercising his lungs.

:34:18.:34:21.

LAUGHTER. Banks need to invest their resources, time and energy in going

:34:22.:34:25.

after people who are high risk. Banks know who are high risk. To be

:34:26.:34:29.

perfectly honest whatever people in this country think of their members

:34:30.:34:34.

of Parliament, their trade unionists, their council officers,

:34:35.:34:37.

their council leaders, their Assembly Member, their Scottish

:34:38.:34:41.

Parliament members, these in the main are not bad people in indulging

:34:42.:34:47.

in money laundering. I'm not saying there won't be a bad apple but they

:34:48.:34:51.

don't present the real and current risk. I want the energies of banks

:34:52.:34:56.

not focused on chasing after the good, but as I said a few moments

:34:57.:35:02.

ago, chasing after the very bad. Mr Speaker, as I said, the FATF,

:35:03.:35:08.

Financial Action Task Force, which says even middle ranking people can

:35:09.:35:15.

be involved in money laundering, does basically put everyone,

:35:16.:35:18.

everyone perhaps above the grade of 7 in the Civil Service in the frame.

:35:19.:35:21.

Think of any organisation and you think of people in that

:35:22.:35:26.

Government-backed organisation, trade union, regional organisers,

:35:27.:35:30.

potentially if banks follow the FATF guidance these people could be

:35:31.:35:33.

deemed to be politically exposed persons and have both their banking

:35:34.:35:37.

facility withdrawn or curtailed but those of their families and

:35:38.:35:41.

associates. Mr Speaker, I am going to make progress, because I wasn't

:35:42.:35:46.

planning to speak for so long. Once a pep always a pep, because although

:35:47.:35:50.

article 22 of the directive states that after 12 months have past from

:35:51.:35:55.

the point that a politically exposed person has left office, a bank can

:35:56.:36:00.

decide that that person is no longer a pep. Sounds like good news.

:36:01.:36:06.

However, the article foes on to say, but banks be required to take into

:36:07.:36:12.

account the continuing risk posed by the person and to apply appropriate

:36:13.:36:17.

and risk-sensitive measures until such time as the person is deemed to

:36:18.:36:23.

pose no further risk, specific to politically exposed persons. Mr

:36:24.:36:27.

Speaker, this, or Madam Deputy Speaker, this is the lobster pot

:36:28.:36:32.

from which few will escape, because banks are risk averse, much better

:36:33.:36:36.

to keep someone as a pep indefinitely than take the risk,

:36:37.:36:40.

unless we are obliged to downgrade them to just the status of a normal

:36:41.:36:44.

customer. Madam Deputy Speaker, in short, without the protections and

:36:45.:36:50.

guidance contained in new clause 9, we could see, forget people serving

:36:51.:36:55.

in public life. Let's talk about people who've left public life.

:36:56.:37:04.

Ex-Army officers, ex-judges, ex-training union representatives,

:37:05.:37:06.

volunteers of political parties and former members of Parliament denied

:37:07.:37:10.

the opportunity to serve on charitable and company boards

:37:11.:37:14.

because their presence on those boards would confer the status of

:37:15.:37:18.

politically exposed person on the rest of the board. A state us that

:37:19.:37:23.

is best avoided by individuals not yet stigmatised. And, if conferred,

:37:24.:37:28.

a state us that could lead to a withdrawal of the relevant charity

:37:29.:37:32.

or company's banking services by its bank. This isn't supposition, Madam

:37:33.:37:36.

Deputy Speaker, I'm not making this up, along with the restriction of

:37:37.:37:40.

banking services, the closure of personal accounts, the black bawling

:37:41.:37:44.

of family members, this is happening now.

:37:45.:37:49.

In accepting clause 9 the Government will enshrine that banks have a

:37:50.:38:00.

legal duty to act proportionately. This is the correct thing to do. In

:38:01.:38:06.

conclusion, new clause 9 isn't about protecting politicians. And of

:38:07.:38:12.

course as politicians, we are politically exposed people. Even a

:38:13.:38:18.

PPS in the Treasury has had difficulties with this. But it is

:38:19.:38:22.

not about protect politicians. Although their rights are no less of

:38:23.:38:28.

deserving of respect than anyone else's, it is about protecting the

:38:29.:38:33.

banking and employment rights of the thousands of people whose name

:38:34.:38:38.

appear in the civil service year book and those military personnel

:38:39.:38:46.

that serve our country, and it is about protecting council officials,

:38:47.:38:49.

protecting the rights of trade unionists. New clause 9 not only

:38:50.:38:55.

protects their rights, it protects the rights of their families.

:38:56.:39:00.

Families who had no say in their career choice, but are dragged into

:39:01.:39:06.

the scope of the directive and finally, I do thank the Government

:39:07.:39:11.

for indicating earlier today that it is accepting new clause 9. By doing

:39:12.:39:15.

so, it will reduce the chances of let's say an army officer serving

:39:16.:39:21.

their country, somewhere hot and dangerous, getting a telephone call

:39:22.:39:26.

from his or her spouse, saying darling, why you are being shot at

:39:27.:39:31.

we have had our bank account closed. The Government is doing the right

:39:32.:39:36.

thing and it to be congratulated for doing the right thing today. Thank

:39:37.:39:46.

you. The question is new Laws clause 9 be read a second time. I'm pleased

:39:47.:39:52.

to follow the honourable gentleman, who made an excellent speech on an

:39:53.:39:58.

important subject and showed his characteristic bravery in addressing

:39:59.:40:03.

an issue that many other members wanted to have addressed, but were

:40:04.:40:08.

unenthusiastic to put themselves in the firing line for. The minister

:40:09.:40:15.

said in the debate we had earlier that Edinburgh was happy --

:40:16.:40:20.

everybody was happy with this bill. I feel now we have come to the

:40:21.:40:26.

section on financial services, she may discover that perhaps we are not

:40:27.:40:30.

quite so happy with this part of the bill. The opposition front bench

:40:31.:40:40.

have put forward amendments 18 to 9 and I wish to speak in support of

:40:41.:40:46.

them. I'm also sympathetic to aemd 10 put forward by the SNP. The

:40:47.:40:53.

problem we have is that getting the senior management regime right is

:40:54.:40:59.

vital to reducing the risk of further irresponsible behaviour in

:41:00.:41:02.

the financial institutions, particularly the banks. We all know

:41:03.:41:09.

the devastating impact which their behaviour had on the rest of the

:41:10.:41:15.

economy and anybody who is in doubt about this should see the film The

:41:16.:41:21.

Big Short, it wonderfully described this episode, albefrom it an

:41:22.:41:28.

American point of view. What we see from the senior manager's regime

:41:29.:41:34.

clauses in this bill I'm sorry to say is a retreat from the sensible

:41:35.:41:41.

legislation that was taken in 2012, following the Parliamentary

:41:42.:41:45.

commission on banking standards. Which recognised that one of the

:41:46.:41:50.

ways of changing behaviour and changing culture is to make those

:41:51.:41:55.

people at the top of the banks accept their full responsibility.

:41:56.:42:00.

I'm afraid the clauses in this Bill, which the Government are putting

:42:01.:42:08.

forward, do no longer do this. It is completely sensible for people to be

:42:09.:42:11.

expected to have the same responsibility for the behaviour of

:42:12.:42:17.

those who work for them, as we see in other institutions on for example

:42:18.:42:24.

health and safety. We have seen a number of arguments for the

:42:25.:42:29.

Government decision to... As it were reverse the reversal of the burden

:42:30.:42:37.

of proof. It is rather... An awkward mouthful. But one of the main

:42:38.:42:44.

arguments which has been put forward is that the regulatory burden of the

:42:45.:42:51.

approach which was legislated for in 2012 is too burdensome and I think

:42:52.:42:56.

this really misses the whole point, which is that we want people to

:42:57.:43:02.

spend more time looking at how to reduce risk, rather than a great

:43:03.:43:09.

deal of time on how to make lots and lots of money irrespective of the

:43:10.:43:14.

risk which they are putting into the economy. Not for themselves. Not on

:43:15.:43:22.

their own account. But which affects all over financial institutions. I

:43:23.:43:27.

attended a seminar and there were senior practitioners there from law

:43:28.:43:31.

firms, from accountancy firms, from some of the big asset managers and

:43:32.:43:37.

they were supportive of the original Parliamentary commission approach.

:43:38.:43:44.

And so I said, you know, my feeling was it was disappointing the

:43:45.:43:47.

Chancellor was going back on this. But that he wasn't just doing it as

:43:48.:43:52.

a whim, he was doing it because he had been lobbied to do it. I asked

:43:53.:43:58.

them why they thought he had been lobbied to do it. Of course, it was

:43:59.:44:02.

the naive question and I had no idea what the answer would be. They all

:44:03.:44:06.

roared with laughter and said, well, it is obvious, it is a way of, to

:44:07.:44:13.

facilitate people making millions of pounds without facing any down side

:44:14.:44:17.

risks. We cannot put ourselves in this situation again. The cost of

:44:18.:44:25.

the bailout in 2008 was ?133 billion. We must take serious think

:44:26.:44:31.

lessons which can be learned and that is why the amendments which

:44:32.:44:37.

have been put forward by my front bench and the SNP are ones which the

:44:38.:44:41.

Government should take seriously and accept. Thank you. I would like to

:44:42.:44:52.

take this opportunity to introduce new clause 10 in my name, aimed at

:44:53.:44:59.

safeguarding the free debt sector and this is a broke amendment. I

:45:00.:45:02.

know she is looking forward to responding to it. There has been a

:45:03.:45:09.

long debate over the fee versus principle in debt management plans.

:45:10.:45:15.

It is not my intention to re-open that debate now, although I'm

:45:16.:45:19.

concerned about free providers. Organisations such as pay plan and

:45:20.:45:24.

Christians against poverty operate the fair share model of free debt

:45:25.:45:28.

management, which cease creditors covering the cost of customer plans

:45:29.:45:36.

on a polluter pace basis. In other words schemes that are free to the

:45:37.:45:45.

debtor. Their facing pressure fro fee-charging firms. In one case it

:45:46.:45:51.

left 16,000 debt management clients unsupported and the customers are

:45:52.:45:56.

being signposted to free providers, but that is the last thing you want

:45:57.:46:02.

to happen when you're caught up in heavy debt, that the person who is

:46:03.:46:06.

advising you disappears and you're having to sit down with new people.

:46:07.:46:11.

The debt management sector is nearing a desperation point and the

:46:12.:46:16.

market is becoming inefficient and consumers are treated badly in many

:46:17.:46:22.

cases. Those fair share operate ors have seen their revenue reduce. As

:46:23.:46:28.

more and more fee-chargers leave the market, we will face a situation

:46:29.:46:32.

where fair share operators are unable to provide economically

:46:33.:46:37.

viable plans. Plainly, we are facing a situation in which condition

:46:38.:46:41.

soupers -- consumers will be charged higher fees and their options will

:46:42.:46:45.

be limited. Again going in the wrong direction. There have been efforts

:46:46.:46:51.

over the course of the last Parliament aimed at safeguarding

:46:52.:46:54.

free debt management provision, mainly on the creation of a

:46:55.:46:59.

voluntary protocol and members have tried to make similar long-term

:47:00.:47:04.

changes, reflecting the cross party nature of the issue. Efforts include

:47:05.:47:09.

those of the debt management working group of which I'm a member and I

:47:10.:47:16.

see the chair there I think poised to speak. Efforts have been aimed at

:47:17.:47:27.

free debt management services. I see such an approach may not be

:47:28.:47:31.

feasible. But this making provision for a tweak to the financial

:47:32.:47:41.

services Act mandating all credit or thes to have consumer free debt

:47:42.:47:47.

plans. Many to accept a reduction in the amount due in exchange for a

:47:48.:47:51.

plan being put in place, but some do not. And this new clause seeks to

:47:52.:48:01.

tackle that. While this does fall short of outlawing fee charging

:48:02.:48:08.

plan, it ensures customers can access free debt plans. This is for

:48:09.:48:16.

needed reform and I'm hopeful it with be implemented without delay. I

:48:17.:48:22.

would lank to thank the minister for her interest and her guidance. Every

:48:23.:48:28.

age has its challenges and it may well be that historians will look

:48:29.:48:33.

back at our era and marvel at the levels of debt. This can arise by

:48:34.:48:42.

misfortune, poor choices or by the actions of others. But it vital the

:48:43.:48:46.

right help is at help to help people out of debt. The FCA can make the

:48:47.:48:52.

rule changes contained in this new clause. I would like to thank the

:48:53.:48:57.

Economic Secretary for her patience and kindness and commend this new

:48:58.:49:04.

clause to her and to the House. Thank you. I'm not rising to support

:49:05.:49:12.

this amendment. While I have sympathy with the member in his aim

:49:13.:49:20.

to keep the free to consumer plans going, I don't feel this is the

:49:21.:49:23.

amendment that will do it. I'm unclear as to the early-morning the

:49:24.:49:31.

fee is being use -- I'm unclear as to the term fee, because it is a

:49:32.:49:35.

voluntary arrangement and I'm concerned about what public benefit

:49:36.:49:43.

will it be. Is this actual lay legislative issue. I do have wider

:49:44.:49:52.

concerns, and I do feel there are too few debt providers giving

:49:53.:49:57.

advice, but I feel the landscape is confusing. Broadly, to introduce a

:49:58.:50:04.

statutory funding management for one debt solution, a debt management

:50:05.:50:08.

plan, I don't feel is the right way forward. There are lots of options

:50:09.:50:13.

available for people in debt, including bankruptcy, debt relief

:50:14.:50:23.

warders, debt plans, consolidation. Many of those plans are not funded

:50:24.:50:35.

sustainably. If paid ?35 for each order. That is not a sustainable

:50:36.:50:42.

solution. What I don't want to see is organisations actually offering

:50:43.:50:46.

plans on the basis of how they're funded, not what what is best for

:50:47.:50:49.

the individual. I think that this amendment could lead to providers

:50:50.:50:54.

doing that. I am sure many wouldn't do that, but it may lead to more

:50:55.:50:59.

providers opting to offer the fair shared solution, because it is

:51:00.:51:03.

statutory funded and they make a loss on every debt relief warder.

:51:04.:51:07.

That is not best for the individual in debt. I think we need a proper

:51:08.:51:14.

review of the landscape of the debt solutions that are around. I do

:51:15.:51:19.

believe that it is too complex and it is not properly costed. I also

:51:20.:51:25.

believe that the providers of the debt solutions have insufficient

:51:26.:51:30.

funding. And as the member referred to, there has been a problem with

:51:31.:51:33.

the debt management plan. In fact the review of the fee charging debt

:51:34.:51:39.

management companies said 60% of their clients were actually put in a

:51:40.:51:44.

worse position by going to a fee-charging debt management

:51:45.:51:47.

company. That cannot be allowed to continue and I'm pleased that the

:51:48.:51:53.

FCA are cleaning up the market. "Concerned what will happen is the

:51:54.:51:58.

people who have come off a debt management plan, having taken that

:51:59.:52:01.

big step to deal with their debts and it is a big step, to face up to

:52:02.:52:06.

the fact that you can't pay your bills is a difficult decision to

:52:07.:52:09.

make, they have taken that step, they have gone to a provider and

:52:10.:52:15.

been told your providers was wasn't providing a good service, find

:52:16.:52:19.

somebody else. I worry they won't actually look around and I hope that

:52:20.:52:25.

the Secretary will look at ways of promoting people going to other

:52:26.:52:29.

providers. I also hope that funding will be available for those other

:52:30.:52:33.

providers as well and that they won't be left in the position of

:52:34.:52:40.

having to pick up a large number of people all at

:52:41.:52:51.

I do have sympathy with the motives behind the amendment but I don't

:52:52.:52:58.

feel that this amendment will some of the main problem, which is that

:52:59.:53:03.

many of the debt solutions and many of the providers of these solutions

:53:04.:53:09.

don't have sufficient funding and that this amendment will focus on

:53:10.:53:14.

one solution and my well skew the market in the wrong way to the

:53:15.:53:18.

advantage of the providers rather than the advantage of the people who

:53:19.:53:27.

need the solution. Madam Deputy Speaker, can I refer to clauses,

:53:28.:53:35.

amendments 1 and 2 in my name and in passing amendments 2 and 9 from the

:53:36.:53:41.

Labour benches. I won't be pressing one and two to a vote should the

:53:42.:53:47.

Labour benches move on 8 and consequential 9, we will be

:53:48.:53:51.

supporting them. Can I say briefly to the Minister, I have said in the

:53:52.:53:57.

previous debate there is much in this Bill to commend itself to us,

:53:58.:54:02.

to the House. There is much that will add to the regulatory regime

:54:03.:54:07.

and its performance in the UK. But the worst part of this proposed

:54:08.:54:13.

legislation, the thing that really takes away as a time bomb inside it

:54:14.:54:19.

is the attempt by Government to shift legislation that it put in

:54:20.:54:27.

place only four years ago on the reverse burden of proof for major

:54:28.:54:34.

financial infractions. Here we come to the nub of it. Legislation was

:54:35.:54:41.

put in place four years ago which identified senior managers in major

:54:42.:54:44.

banking and financial organisations. And if on their watch some serious

:54:45.:54:50.

infraction of regulatory rules was encountered, they would be held

:54:51.:54:54.

responsible automatically. Unless they could prove that they had taken

:54:55.:55:01.

due steps to stop that happening. It was put there with a great deal of

:55:02.:55:06.

public support, and support in this House, because it was the one sure

:55:07.:55:10.

way of ensuring that the financial sector at senior level did not do

:55:11.:55:18.

what it had done all through the 200-08 crisis, of blaming everyone

:55:19.:55:20.

else and saying it wasn't their fault. It made senior managers

:55:21.:55:27.

responsible. Just as senior managers in other organisations in utilities

:55:28.:55:31.

become responsible for a major crisis. Now, why would the

:55:32.:55:37.

Government want to change that before it even got into operation?

:55:38.:55:44.

Which was only this month. The point is that graves t graves the wrong

:55:45.:55:48.

signal -- that gives the wrong signal. You put legislation in place

:55:49.:55:53.

and you see if it works, let's try it, we have a consensus behind it.

:55:54.:55:57.

To put the legislation in place and before it is even in operation to

:55:58.:56:01.

say we are going to pull that, to change, that this from a Chancellor

:56:02.:56:08.

whose constant restrain is he has a long term economic plan. This change

:56:09.:56:12.

sends out all the wrong signals. That's the key issue here. The

:56:13.:56:18.

Minister will say well, we think it was disproportionate. Now that we've

:56:19.:56:22.

widened the number of people caught up in the senior management regime

:56:23.:56:27.

to tens of thousands, it becomes problematic about how we could apply

:56:28.:56:32.

it. I know all the explanations. But I put it to the Minister, by

:56:33.:56:38.

reneging on legislation this Government put in place to great

:56:39.:56:44.

fanfare four years ago we are signalling to the world that we are

:56:45.:56:47.

loosening the regulatory bounds. You may think you are not, but you've

:56:48.:56:52.

sent the wrong signal out. It is like another signal this Government

:56:53.:56:57.

has been sending out. Year after year after year the Chancellor and

:56:58.:57:01.

Treasury Minister got up and told us, we should pay lower taxes. Taxes

:57:02.:57:07.

are bad, keep your own money. Then suddenly we discover hounds of

:57:08.:57:12.

thousands of people are setting up offshore secret bank accounts, the

:57:13.:57:15.

Government gets all holy and says, we didn't mean you to do that. This

:57:16.:57:20.

Government speaks sometimes with two voices. I know individual Ministers

:57:21.:57:25.

are very honest and sincere, but sometimes Ministers don't understand

:57:26.:57:28.

they speak with one voice on taxes, one voice on regulation, and then

:57:29.:57:34.

they do the opposite. It sends out the wrong signal. You cannot go on

:57:35.:57:38.

as a Government blaming other people. You are to blame if you

:57:39.:57:42.

change this rule without putting it into force for a few years to see if

:57:43.:57:46.

it works. That's why we have to keep the existing 2012 legislation as it

:57:47.:57:51.

is until it's been proven otherwise that it doesn't work. Thank you

:57:52.:57:59.

Madam Deputy Speaker. I beg to move new clause 14 and amendments 8 and 9

:58:00.:58:04.

and 10 which are a consequence upon amendment 8 in my name and that of

:58:05.:58:08.

my right honourable friend and honourable friends. I would like to

:58:09.:58:14.

speak first to our new clause 14 on combatting abusive tax avoidance and

:58:15.:58:17.

then to our amendments on the reverse burden of proof or the

:58:18.:58:22.

presumption of responsibility as I choose to call it regarding senior

:58:23.:58:25.

managers within the banking sector. Fist of all new clause 14. In the

:58:26.:58:32.

wake of the Panama papers leak, which the honourable member for East

:58:33.:58:36.

Lothian just mentioned, Labour tabled new clause 14, combatting

:58:37.:58:39.

abusive tax avoidance. This new clause sets out that combatting

:58:40.:58:43.

abusive tax avoidance should be established as a new regulatory

:58:44.:58:48.

principle for the FCA, and requires that they undertake in consultation

:58:49.:58:52.

with the Treasury an annual review for presentation to the Treasury

:58:53.:58:56.

into abusive tax avoidance. This new clause makes clear that part of this

:58:57.:59:02.

new principle should be measures to ascertain and record beneficial

:59:03.:59:06.

ownership of trusts, using facilities provided by banks with UK

:59:07.:59:10.

holding companies or entities regulated by the Bank of England or

:59:11.:59:15.

the FCA, control of shareholders and ownership of shares and investment

:59:16.:59:19.

arrangements in an overseas territory outside the UK involving

:59:20.:59:23.

UK financial institutions. Now, honourable members will be aware

:59:24.:59:29.

that Labour has published its tax transparency enforcement programme

:59:30.:59:33.

following the Panama papers leak and the release of information thaws of

:59:34.:59:41.

companies listed in the Mossack Fonseca papers have financial

:59:42.:59:45.

services provided by UK banks. Our programme makes clear that Labour

:59:46.:59:49.

will, and I quote, work with banks to provide further information over

:59:50.:59:52.

beneficial ownership for all companies and trusts that they work

:59:53.:59:57.

for. So, Madam Deputy Speaker, this new clause seeks to establish a

:59:58.:00:02.

procedure to enact that. The Government announced a deal on the

:00:03.:00:06.

global exchange of beneficial ownership information last week,

:00:07.:00:10.

something we welcome as an initial step but something which in our view

:00:11.:00:15.

is insufficient. The measures announced by the EU this week are

:00:16.:00:20.

welcome but do not go nearly far enough, because they only require

:00:21.:00:24.

partial reporting. As my honourable friend the Shadow Chancellor said

:00:25.:00:29.

last week, the turnover threshold is far too high, and Labour MEPs in the

:00:30.:00:34.

European Parliament will be doing the right thing in pushing to get

:00:35.:00:38.

that figure further reduced so that it is still more difficult for large

:00:39.:00:42.

corporations to dodge paying their fair share of tax. Banks need to

:00:43.:00:47.

reveal the beneficial ownership of companies and trusts they work with.

:00:48.:00:52.

That means establishing a record of ownership of companies and trusts

:00:53.:00:55.

supported by UK banks, whether the Europeans are resident in the UK or

:00:56.:01:03.

not. We must ensure that Crown dependencies and overseas territory

:01:04.:01:09.

enforce stricter standards, but where UK banks is involved it is

:01:10.:01:15.

right a record is maintained of the company beneficial owners they

:01:16.:01:22.

advise. Now, the tax experts have written that Jersey, grncy and the

:01:23.:01:29.

Cayman Islands are, to quote, cock whom. They must have registers of

:01:30.:01:38.

beneficial ownership, even for the use of UK enforcement agencies. The

:01:39.:01:41.

shadow chairman said in response it fails to do anything to tackle the

:01:42.:01:47.

tax havens in British overseas territories. Failure to take

:01:48.:01:53.

responsibility for these undermines the effectiveness of this agreement.

:01:54.:01:57.

Similarly, Madam Deputy Speaker, we are aware that the FCA wrote to

:01:58.:02:03.

banks urging them to declare their links to Mossack Fonseca by 15th

:02:04.:02:08.

April. We believe the FCA's call on UK financial institutions to review

:02:09.:02:14.

links with Mossack Fonseca is also welcome, but the regulator should

:02:15.:02:18.

recognise the need for complete transparency to retain public

:02:19.:02:23.

confidence. The FCA shoo-in our view seek full disclosure and act without

:02:24.:02:28.

delay. The slow drip, drip responses of the Prime Minister's office over

:02:29.:02:33.

recent weeks have only served to fuel public concern and have, with

:02:34.:02:39.

respect, been very much a lesson in how to unintentionally raise

:02:40.:02:43.

suspicion. The FCA should publish which financial institutions it has

:02:44.:02:46.

written to and why, what information it has asked them to provide, and

:02:47.:02:50.

what action it will take following now that the 15th April deadline has

:02:51.:02:57.

passed. Importantly, it cannot allow banks and their subsidiaries to

:02:58.:03:01.

conduct an open ended internal investigation but must establish an

:03:02.:03:06.

early deadline to disclose all information on their relations with

:03:07.:03:11.

Mossack Fonseca so the regulator can take all necessary action.

:03:12.:03:15.

Campaigners, Global Witness, responded by saying, these are

:03:16.:03:19.

welcome first steps, but they were concerned that in their words, UK

:03:20.:03:24.

authorities were missing the wider points. Mossack Fonseca is no bad

:03:25.:03:30.

apple, it is just a smaller part of the much deeper problem. So, Madam

:03:31.:03:33.

Deputy Speaker, that is why it is necessary that we have a clear

:03:34.:03:37.

direction of travel to record beneficial ownership of trusts

:03:38.:03:41.

services by UK banks, as we are seeking to do with this new clause.

:03:42.:03:47.

So, given the widespread concerns of tax avoidance, the British public

:03:48.:03:52.

who bailed out the country's banking sector deserve to know the facts

:03:53.:03:56.

regarding the role UK banks have in this unfolding story. So with new

:03:57.:04:01.

clause 14, Labour has made a positive and practical proposal to

:04:02.:04:06.

take steps to increase tax transparency and publicly available

:04:07.:04:09.

information on the beneficial owners of companies and trusts the

:04:10.:04:13.

registered in tax havens. And now, Madam Deputy Speaker, I want to turn

:04:14.:04:19.

to the remainder of the amendments. As set out at second reading and in

:04:20.:04:23.

our committee stage amendments, Labour's position was made very

:04:24.:04:29.

clear. Removing the reverse burden of proof, removing the presumption

:04:30.:04:33.

of responsibility is unreasonable, unwise and, I'm sorry to say, risky.

:04:34.:04:38.

We continue to support the legislation agreed by the same

:04:39.:04:44.

Chancellor and in both houses as recently as 2013, in the financial

:04:45.:04:49.

services banking reform Act. That is why we've retabled our amendments in

:04:50.:04:53.

relation to keeping the presumption of responsibility. And it shouldn't

:04:54.:04:58.

be forgotten, Madam Deputy Speaker, that this measure was a key

:04:59.:05:02.

recommendation of the Parliamentary Commission on Banking Standards who

:05:03.:05:05.

said that it would make sure that those who should have prevented

:05:06.:05:08.

serious Prudential and conduct failures would no longer be able to

:05:09.:05:13.

walk away simply because of the difficulty of proving individual

:05:14.:05:18.

culpability in the context of complex organisations. The

:05:19.:05:22.

presumption of responsibility as currently set out in legislation

:05:23.:05:25.

applies to senior managers. It means that to avoid being found guilty of

:05:26.:05:30.

misconduct when there has been misconduct in an area tore which

:05:31.:05:33.

they are responsible, they'll have to prove they took reasonable steps

:05:34.:05:38.

to prevent that contravention taking place. This Bill removes that onus

:05:39.:05:47.

on senior bankers. That onus is entirely reasonable, entirely

:05:48.:05:50.

proportionate, and as very bitter experience tells the British people,

:05:51.:05:54.

entirely necessary. Misconduct and misdemeanors in the financial

:05:55.:05:58.

services are not merely a tale from history. In 2015, the FCA had to

:05:59.:06:04.

final firms more than ?900 million. There was also the LIBOR scandal,

:06:05.:06:08.

foreign exchange fines and the mis-selling of PPI to the value of

:06:09.:06:14.

up to ?33 billion. The presumption of responsibility is so reasonable

:06:15.:06:19.

and so necessary that the policy was introduced with cross-party support.

:06:20.:06:23.

That cross-party support should not be forgotten. The 2013 Act applied

:06:24.:06:28.

the presumption of responsibility through the senior managers and

:06:29.:06:33.

certification regime to all authorised persons. Today's Bill

:06:34.:06:39.

extends that regime to a wide range of businesses but has watered down

:06:40.:06:43.

the presumption of responsibility to a mere duty of responsibilitiment

:06:44.:06:47.

the vast majority of people working in the financial sector are not and

:06:48.:06:50.

are not affected by the existing legislation as it stands and would

:06:51.:06:54.

remain unaffected should our amendment pass. That is why the

:06:55.:06:58.

legislation was passed by the members opposite in the first place.

:06:59.:07:04.

In December 2013, when speaking of the stricter legislation being

:07:05.:07:07.

introduced by the Government, including the reverse burden of

:07:08.:07:11.

proof, the then Economic Secretary to the Treasury, the right

:07:12.:07:16.

honourable member for Bromsgrove, told Parliament that, in his words,

:07:17.:07:19.

the introduction of this offence means that in future those who've

:07:20.:07:24.

been, who bring down their bank by making thoroughly unreasonable

:07:25.:07:27.

decisions can be held accountable for their actions. Senior managers

:07:28.:07:30.

would be liable if they take a decision that leads to the failure

:07:31.:07:35.

of the bank. The maximum sentence for the new offence reflects the

:07:36.:07:38.

seriousness that the Government and society more broadly placed on

:07:39.:07:41.

ensuring that our financial institutions are manage inside a way

:07:42.:07:45.

that does not recklessly endanger the economy or the public purse. On

:07:46.:07:51.

that I do agree with the right honourable member for Bromsgrove,

:07:52.:07:53.

who is completely right on this occasion. It is a shame there's been

:07:54.:07:59.

a change in portion and the Chair of the Treasury Select Committee said:

:08:00.:08:11.

Other campaigners have expressed their support. Including Martin Wolf

:08:12.:08:19.

of financial times. We have retabled this amendment to state our

:08:20.:08:23.

opposition to this unwelcome, unnecessary and risky change. The

:08:24.:08:28.

legislation was introduced by the Chancellor in 2013 and members of

:08:29.:08:31.

the House should not forget it was due to come into force in March this

:08:32.:08:37.

year. It is yet to be even tested as the member for East Lothian has

:08:38.:08:45.

said. Now is not to make this concession to bankers. The

:08:46.:08:50.

announcement of the settlement, including the departure of Martin

:08:51.:08:55.

Weekly from the FSA, the scrapping of the review into banking culture

:08:56.:09:01.

and the discovery that UK banks and crown dependent territories are a at

:09:02.:09:08.

the heart of tax haven scandal means this proposal to remove the

:09:09.:09:10.

presumption of responsibility is the wrong proposal at the wrong time and

:09:11.:09:15.

we will urge members to support our amendments N relation to new clause

:09:16.:09:21.

10, tabled by the member for South west Devon, we recognise the concern

:09:22.:09:29.

about fee charges in the debt management sector, who often charge

:09:30.:09:34.

large amounts and can add to problems. In the scenario proposed,

:09:35.:09:44.

instead of charging customers, the companies would receive income from

:09:45.:09:53.

a levy. How it is not clear how this helps consumers specifically. These

:09:54.:09:56.

rules could bind some commercial organisations to play fees to other

:09:57.:10:01.

ones. There are some serious competition issues here and I'm

:10:02.:10:05.

aware that the FCA have concerns about this point too and there are

:10:06.:10:10.

questions to ask about how the creditors set the level of those

:10:11.:10:17.

fees. It wouldn't stop companies charging consumers in addition to

:10:18.:10:23.

the the fee, it could lead to commercial providers advising people

:10:24.:10:26.

on the basis of their creditors, not on their actual needs. While the

:10:27.:10:34.

amendment can be presented as a way of killing fee charging, it may

:10:35.:10:39.

result in a lifeline being thrown to this sector and critics may well ask

:10:40.:10:43.

why the Government should prop up this market just at the point that

:10:44.:10:48.

the FCA is cheaping it up -- cleaning it up. And it introduces a

:10:49.:10:54.

funding mechanism for one debt solution, debt management plans,

:10:55.:10:58.

when there are many options available for people, including

:10:59.:11:06.

bankruptcy, debt consolidation and individual voluntary arrangements.

:11:07.:11:11.

Only about one third of those people seeking debt advice are provided

:11:12.:11:18.

with a debt management plan. While we welcome the debate, it is

:11:19.:11:24.

necessary to consider how we meet the need of all people with debt

:11:25.:11:30.

problem and we don't support the new clause and finally new clause 9 in

:11:31.:11:36.

relation to money laundering in the name of the member for Brox born,

:11:37.:11:46.

I'm aware this is an issue on concern. The rules at the moment

:11:47.:11:55.

require banks and businesses to carry out enhanced due diligence on

:11:56.:12:00.

all politically exposed persons. That is persons entrusted with a

:12:01.:12:05.

public function. If the transposition of the EU directive

:12:06.:12:11.

into domestic legislation is mishandled, also a wide range of

:12:12.:12:16.

other people could be affected and it could affect tens of thousands of

:12:17.:12:23.

people including civil servants, city workers, and even the families

:12:24.:12:29.

of armed forces officers serving our country abroad. The EU's fourth

:12:30.:12:35.

money laundering directive will need to be transposed into UK law as has

:12:36.:12:40.

been mentioned within two years and it is necessary that we get this

:12:41.:12:46.

right to ensure that the safe guards proposed to prevent money laundering

:12:47.:12:53.

and the provisions governing the register of beneficial ownership of

:12:54.:12:57.

companies and don't get in the way of the individuals use of their bank

:12:58.:13:02.

accounts, securing mortgages or supporting charities. We do believe

:13:03.:13:06.

this is an important issue and we are grateful to the member for all

:13:07.:13:11.

the hard work he has done on explaining the Po pen shall risks --

:13:12.:13:26.

potential risks. Thank you. Can I start with new clause 9? Which has

:13:27.:13:33.

been tabled by the member for Brox born and colleagues which addresses

:13:34.:13:38.

the issue of politically exposed persons. My colleague is an expert

:13:39.:13:44.

not only in speaking, but in Parliamentary procedure and I

:13:45.:13:48.

commend him for the use of both. The Chancellor and I are very concerned

:13:49.:13:53.

about this issue as he knows and we are grateful to the member for his

:13:54.:14:01.

work in collating examples he has heard from colleagues and from the

:14:02.:14:06.

banking sector. It is right that the know your customer requirements

:14:07.:14:09.

should be tailored to the risk posed. I would like to reassure the

:14:10.:14:14.

House that we are on the side of colleagues in this regard. I

:14:15.:14:19.

therefore welcome this amendment and a strong message it sends to banks

:14:20.:14:27.

as they implement these rules. And the clause itself addresses guidance

:14:28.:14:31.

and guidance will help the banks to take an effective proportionate and

:14:32.:14:35.

commensurate approach to politically exposed persons. The Government

:14:36.:14:40.

intends to implement new money laundering regulations by June next

:14:41.:14:43.

year at the latest. And this amendment will come into force at

:14:44.:14:47.

that time and we will be consulting on the new regulations this year. As

:14:48.:14:51.

well as accepting this amendment, I would like to take the opportunity

:14:52.:14:55.

to update the House on other action we have taken to resolve these

:14:56.:15:02.

issues on behalf of members. Since the member for Brox born has his

:15:03.:15:07.

adjournment debate. We had a meeting with the banks that I organised with

:15:08.:15:14.

the Home Office's Security Minister and the Chancellor wrote to the

:15:15.:15:18.

banks on 23rd March, to explain our views. We will continue to work with

:15:19.:15:23.

the banks with the FCA and others to ensure that a sensible proportionate

:15:24.:15:27.

approach prevails. I have also written not once but twice with a

:15:28.:15:33.

dear colleague letter to all members and peers giving colleagues the name

:15:34.:15:42.

of a senior designated person to contact at each major bank should

:15:43.:15:47.

they encounter problems. So I would like to thank the member for

:15:48.:15:50.

bringing this issue to the Noor of the House -- floor of the House so I

:15:51.:15:56.

can give this reassurance of the attention the Government is paying

:15:57.:16:03.

to this challenge. Turning to the amendment new clause 10, tabled by

:16:04.:16:10.

the member for South West Devon, I would like to thank him for the

:16:11.:16:14.

collaborative approach he has taken in tabling the amendment and his

:16:15.:16:19.

commitment and that of his all party group to support households in

:16:20.:16:24.

problem debt. The Government shares his concerns about the potential

:16:25.:16:29.

detriment to consumers participating in some debt management plans and I

:16:30.:16:33.

recognise the importance of protecting this group of consumers.

:16:34.:16:38.

The Government's focus has been on reforming the regulation of the

:16:39.:16:41.

sector to ensure that financial services firms are on the side of

:16:42.:16:45.

people who work hard, do the right thing, get on in life.

:16:46.:16:49.

Responsibility for regulating debt management firms like all other

:16:50.:16:54.

consumer credit firms transferred from the office toff fair trading to

:16:55.:17:09.

the financial authority. The Debt management firms were in the first

:17:10.:17:15.

group of firm to require full authorisation and the FC is

:17:16.:17:21.

scrutinising firms. Firms which don't meet the conditions will not

:17:22.:17:25.

be able to continue to offer debt management plans. Removing

:17:26.:17:29.

noncompliant firms from the market will reduce the risk to harm to

:17:30.:17:34.

consumers and ensure that consumers have access to sustainable repayment

:17:35.:17:44.

plans. The honourable lady raised the question of the handover of

:17:45.:17:49.

clients with debt management plans, whose firms have not been authorised

:17:50.:17:54.

by the FCA. That is something that the FCA is paying close attention to

:17:55.:17:59.

try and ensure that there is a hand off which has regard not only to

:18:00.:18:09.

data protection but the position of someone who has been in a plan and

:18:10.:18:13.

trying to find a better alternative for them. Turning to the issue

:18:14.:18:18.

raised by the amendment, how debt management plans are funded,

:18:19.:18:22.

charities like step change and Christians against poverty already

:18:23.:18:26.

negotiate voluntary funding agreements through the fair share

:18:27.:18:31.

model. Introducing changes to this such as mandatory contributions has

:18:32.:18:37.

the potential to have unintended consequences, disrupting what is a

:18:38.:18:43.

successful arrangement and setting this level of this share is not

:18:44.:18:47.

supported by the not for profit sector. Similarly not for profit

:18:48.:18:54.

providers that are concerned that formalising fair share may change

:18:55.:18:58.

charity's relationships and compromise their independence and

:18:59.:19:03.

their ability to be seen as impartial is essential to

:19:04.:19:07.

encouraging people to come forward for support. With the authorisation

:19:08.:19:12.

process ongoing and the changes in the market, now is not the right

:19:13.:19:17.

time to introduce changes to way plans are funded. Any consideration

:19:18.:19:22.

of changes should be taken when the shape of the market is known. The

:19:23.:19:26.

best setting for looking at the full landscape of debt advice will be in

:19:27.:19:33.

the context of public financial guidance review which includes a

:19:34.:19:37.

commitment to monitor the process. If necessary if funding arrangements

:19:38.:19:41.

will be reviewed and the government may consider broadening the funding

:19:42.:19:46.

base to include other sectors to ensure consumers get the help they

:19:47.:19:52.

need. I trust this assures the member that the government continues

:19:53.:19:55.

to consider it a priority to help those facing problem debt and he

:19:56.:20:00.

will not put his amendment to the House this afternoon. Turning to the

:20:01.:20:05.

reverse burden of proof and the senior managers resume in amendments

:20:06.:20:19.

one, two, eight and ten. We reject both these sets of amendments,

:20:20.:20:25.

because the senior management with a duty of responsibility will be an

:20:26.:20:29.

effective tool for holding senior managers to account. The duty of

:20:30.:20:35.

responsibility will extend to all senior managers, the discredited

:20:36.:20:38.

approved persons regime will be replaced. Firms must identify what

:20:39.:20:46.

their managers are response yob for. -- responsible for. They will not be

:20:47.:20:51.

able to wriggle off the hook. The reverse burden of proof is not

:20:52.:20:55.

needed to deliver what we want to deliver - a culture change. To quote

:20:56.:21:03.

Lord Turnbull, he said in future senior managers will have to take

:21:04.:21:07.

responsibility for what goes on in the teams for which they're

:21:08.:21:10.

responsible and for the actions of the people they have appointed and

:21:11.:21:17.

given accreditation. I still fail to see why the reverse burden of proof

:21:18.:21:21.

is the only way to get people to understand that. The proposal in the

:21:22.:21:32.

bill is superior. As the building societies association said in Nair

:21:33.:21:36.

written evidence to the -- in their written evidence, the lack of

:21:37.:21:40.

accountability is the result of the failure of allocate responsibilities

:21:41.:21:44.

in firms. Because is in will be addressed be I the new strengthening

:21:45.:21:50.

accountability in banking rules, through responsibility maps,

:21:51.:21:54.

individual statements of individual, handover arrangements, the reverse

:21:55.:21:59.

burden of proof is unfair and redundant. Not my words but the

:22:00.:22:03.

words of Building Societies Association.

:22:04.:22:09.

Today was a good debate is about what happens when goes wrong. And

:22:10.:22:16.

refers Ali reverse burden of proof, the senior manager responsible for

:22:17.:22:19.

the area of the firmware that which occurred would have too proved they

:22:20.:22:22.

have taken reasonable steps to prevent it. This bill would impose

:22:23.:22:28.

statutory responsibility and senior managers. They would have to take

:22:29.:22:35.

steps to prevent breaches of regulations. When such a breach

:22:36.:22:38.

occurred, it would fall to the regulators to show the responsible

:22:39.:22:42.

senior manager had failed to take such steps. The duty will be

:22:43.:22:46.

extended with the senior managers and certification regime to senior

:22:47.:22:50.

managers in all authorised financial services firms, ensuring they are

:22:51.:22:55.

held to the same high standards as those in banks. Contrary to the

:22:56.:23:02.

allegations of the member for Leeds East, the bill is in no way soft on

:23:03.:23:07.

bankers. A senior manager can be found guilty of misconduct if a

:23:08.:23:10.

breach occurs in the area for which they are responsible and they did

:23:11.:23:13.

not take reasonable steps to prevent it, whether they were aware of the

:23:14.:23:21.

contravention or not. He quoted from a previous economic Secretary, my

:23:22.:23:24.

colleague for Bromsgrove, and I think he might be confusing the

:23:25.:23:31.

reverse burden of proof would be criminal offence of recklessness,

:23:32.:23:34.

causing a bank to fail. I can assure him and the house that this criminal

:23:35.:23:38.

offence, with a possible seven-year sentence attached, came into effect

:23:39.:23:47.

in March. Turning to the new Clause 14, which seeks to give the FCA and

:23:48.:23:54.

PRA a statutory duty to have regard in combating tax avoidance and

:23:55.:24:00.

report to the Treasury, I welcome the opportunity to set out the

:24:01.:24:04.

measures this government has done, far more than any previous

:24:05.:24:08.

government, to tackle tax evasion, tax avoidance and aggressive tax

:24:09.:24:13.

planning. It has become a world leader in tax transparency. However,

:24:14.:24:19.

as the UK tax authority is HMRC, rather than the FCA, or PRA, they

:24:20.:24:25.

are the ones responsible for ensuring that individuals pay the

:24:26.:24:31.

taxes that they owe. Last week, we set off a far more effective package

:24:32.:24:36.

of proposals to tackle the problem of tax evasion and avoidance,

:24:37.:24:38.

ensuring a multi-agency approach, both by strengthening HMRC and

:24:39.:24:46.

involving relevant bodies like the FCA. It is to give the body is the

:24:47.:24:55.

ability to do their job, whether by changing tax laws or providing

:24:56.:24:57.

additional funding to strengthen capability. I could go on in terms

:24:58.:25:02.

of all of the measures, I do welcome the opportunity, and if you want to

:25:03.:25:07.

hear more, in the July 2015 budget, we confirmed an extra 800 million

:25:08.:25:12.

investment to fund additional work to tackle evasion and noncompliance.

:25:13.:25:18.

HMRC's specialist offshore unit is investigating more than 1000 cases

:25:19.:25:22.

of offshore ovation around the world, with more than 90 individuals

:25:23.:25:27.

subject to criminal investigation, even before last week, HMRC had

:25:28.:25:32.

already received a great deal of information on offshore companies,

:25:33.:25:34.

including in Panama and including Mowsack Fonseca. It comes from a

:25:35.:25:41.

wide range of sources and is the subject of intense investigation. We

:25:42.:25:45.

are going further, by providing new funding of up to ?10 million for an

:25:46.:25:49.

operationally independent cross agency task force. The task force

:25:50.:25:53.

will include analysts, compliance specialists, investigators from the

:25:54.:26:01.

HMRC, the National Crime Agency, the Serious Fraud Office and the

:26:02.:26:03.

Financial Conduct Authority. It will have full independence and report to

:26:04.:26:06.

my honourable friend, the Chancellor and the Home Secretary. Of course,

:26:07.:26:14.

the FCA has a role to play. The FCA's 2016-17 business plan states

:26:15.:26:17.

that the fight against financial crime and money laundering is one of

:26:18.:26:20.

their priorities. Their rules require firms to have affected

:26:21.:26:24.

systems and controls to prevent the risk that they might be used to

:26:25.:26:28.

further financial crimes. That is why the FCA has written to financial

:26:29.:26:32.

firms asking them to declare their links to Mowsack Fonseca. If the FCA

:26:33.:26:37.

was to find any evidence that fans have been breaking the rules, it

:26:38.:26:41.

already has strong powers to take action. However, it is HMRC that is

:26:42.:26:44.

ultimately responsible for investigating and prosecuting

:26:45.:26:49.

offences associated with tax evasion. Finally, with regard to

:26:50.:26:54.

trusts, we believe we have secured a sensible way forward by ensuring

:26:55.:26:58.

that trusts that generate a tax consequence in the UK may be

:26:59.:26:59.

required to report their beneficial required to report their beneficial

:27:00.:27:04.

ownership information to HMRC by focusing on such trusts, and we are

:27:05.:27:07.

focusing on those where there is a higher risk of money laundering or

:27:08.:27:12.

tax evasion, which arise when trusts migrate or generate income gains,

:27:13.:27:18.

and minimising burdens on the vast majority of perfectly ordinary,

:27:19.:27:20.

legitimate trusts. While I appreciate the spirit with which

:27:21.:27:25.

this amendment has been tabled, I do not believe it would be appropriate

:27:26.:27:29.

to change the role of the FCA or the PRA, and I would urge the honourable

:27:30.:27:36.

member to withdraw his amendment, otherwise the Government will have

:27:37.:27:41.

to vote against it. The question is that new Clause 9 be read a second

:27:42.:27:46.

time. As many of that opinion, say aye. The contrary, no? I think the

:27:47.:27:53.

ayes have it, the ayes have it. The question that Clause 9 be added to

:27:54.:28:01.

the bill, of that opinion, say aye, of the country, no, the ayes have

:28:02.:28:05.

it. New Clause 14, Richard Burden to move formally? The question is that

:28:06.:28:11.

new Clause 14 be read a second time. As many of that opinion, say aye.

:28:12.:28:18.

The contrary, no? Division! Clear the lobby.

:28:19.:29:33.

That new Clause 14 be read a second time. Of that opinion, aye, to the

:29:34.:29:39.

contrary, no. The ayes have it. Order, order! The ayes to the right,

:29:40.:40:54.

245. The noes to the left, 299. The ayes to the right, 245, the noes to

:40:55.:41:01.

the left, 299. The noes have it, the noes habits. We now come to

:41:02.:41:05.

Amendment eight, Richard to move formally. The question is that the

:41:06.:41:10.

amendment be made. As many as are of the opinion, say "aye". To the

:41:11.:41:16.

contrary, "No". Division. Clear the lobby.

:41:17.:43:37.

The question is that me amendment be made. As many as are of the opinion,

:43:38.:43:45.

say "aye". To the contrary, "No". Tell us for the noes. Thank you very

:43:46.:43:48.

much. Order. The ayes to the right, 246.

:43:49.:49:16.

The noes to the left, 300. The ayes to the right, 246. The noes

:49:17.:53:03.

to the left, 300. The noes have it. Unlock. We now come to Amendment 4,

:53:04.:53:12.

with which it would be convenient to consider Amendment 5. Jonathan

:53:13.:53:19.

Edwards to move Amendment 4? I am delighted we have got to this

:53:20.:53:22.

grouping, as I feared this stage of the bill would have been concluded

:53:23.:53:26.

prematurely. I have only a very short speech for the house, but,

:53:27.:53:31.

luckily, this is a rather straightforward and uncomplicated

:53:32.:53:36.

matter. If I had known I had more time than I assumed, which is a very

:53:37.:53:42.

rare privilege in this place, I would have made a far lengthier

:53:43.:53:47.

speech, quoting extensively from the masterpiece History Of Wales by the

:53:48.:53:59.

late, great John Davies. The great historian, a member of the Labour

:54:00.:54:06.

Party and of Plaid Cymru, Gwyneth Williams, tied to my constituency.

:54:07.:54:11.

I'd like to speak to the amendments, 4 and 5, which I am delighted has

:54:12.:54:18.

been supported by the Labour front bench. I was surprised when I was

:54:19.:54:22.

eating my complex to receive an e-mail from the Western mail

:54:23.:54:26.

correspondent, citing a press release by the Shadow Secretary of

:54:27.:54:29.

State for Wales saying that they supported my amendments. It was a

:54:30.:54:36.

very good moment, maybe the of a beautiful relationship. I fear I

:54:37.:54:39.

might be doing my best to scupper those endeavours after the election.

:54:40.:54:46.

I aim to press Amendment 4 to a vote, with your permission. I have

:54:47.:54:51.

spoken on this issue before in this chamber, I would like to reiterate a

:54:52.:54:56.

view points I made during the second reading. The amendment deals with

:54:57.:55:01.

the historic anomaly that prohibits Wales from producing its own

:55:02.:55:04.

distinctive banknotes, while both Scotland and Northern Ireland are

:55:05.:55:09.

allowed to do so, to celebrate their respective national figures and

:55:10.:55:15.

landmarks. I am grateful to the honourable gentleman for giving way.

:55:16.:55:21.

Would he support me in saying that my predecessor, but one, for what

:55:22.:55:26.

was then the constituency, made possibly the greatest contribution

:55:27.:55:33.

as a backbencher to change the lives of people, would he be a fine

:55:34.:55:39.

candidate to go on such banknotes? Thank you for the intervention. I

:55:40.:55:41.

feared I would have a lot of interventions along these lines. I

:55:42.:55:48.

will be noting some notable names, during my speech. I think it is not

:55:49.:55:51.

a matter for us as politicians to determine. I will give way in a

:55:52.:55:58.

minute. I think it would be appropriate for there to be a

:55:59.:56:01.

conversation amongst the people of Wales, who they would like to have

:56:02.:56:06.

on their banknotes. I thank the honourable member for giving way.

:56:07.:56:23.

Could I suggest, that they consider Bevin, founder of the National

:56:24.:56:27.

Health Service? That is certainly one of the names I would like to see

:56:28.:56:31.

put forward, I was referring to him earlier in my speech. He will note,

:56:32.:56:37.

of course, that we have had two great men recommended, that I would

:56:38.:56:40.

like to see more women represented on banknotes, Welsh or indeed Bank

:56:41.:56:45.

of England, and would he think that whether or not one was a big

:56:46.:56:50.

spender, Dame Shirley Bassey would be an excellent person to be on a

:56:51.:56:56.

Welsh banknotes? I am grateful for that intervention. I did see that

:56:57.:57:00.

name mentioned, very honourably in the Labour press notice this

:57:01.:57:04.

morning. Mr Deputy Speaker, like other parts of the UK, Wales was

:57:05.:57:09.

once awash with small banks, covering relatively small

:57:10.:57:11.

geographical areas, allowed to issue their own banknote. The bank Charter

:57:12.:57:18.

act brought an end to Welsh banknotes and provincial banknotes

:57:19.:57:23.

in England, but that did not apply to Ireland or Scotland. Four bags in

:57:24.:57:26.

Northern Ireland and three in Scotland have the authority to issue

:57:27.:57:30.

their own banknotes, provided they are backed by Bank of England notes.

:57:31.:57:36.

It would allow Lloyds Banking Group, which holds the writes to the bank

:57:37.:57:42.

of Wales brand, partly publicly owned by Welsh taxpayers, to issue

:57:43.:57:47.

Welsh banknotes, in the same way as is permitted for the three banks in

:57:48.:57:52.

Scotland and Northern Ireland. Would he agree that it is a cultural

:57:53.:57:55.

advantage that is gained from issuing banknotes, it is worthwhile

:57:56.:58:04.

doing? The value goes to the taxpayer, and it would be a good

:58:05.:58:09.

move? I am grateful to my parliamentary leader for the

:58:10.:58:11.

intervention. He is completely right. That is widely four banks in

:58:12.:58:16.

Northern Ireland and the three in Scotland have continued with this

:58:17.:58:19.

practice. With that in mind, considering there is a stake in

:58:20.:58:24.

Lloyds, there is a commercial interest for that bank and also a

:58:25.:58:27.

public interest, due to part ownership of the bank. To do so

:58:28.:58:35.

would be a welcome boost to Brand Wales, and recognise the country has

:58:36.:58:44.

an economic entity. We celebrate individuals, while also celebrating

:58:45.:58:50.

architectural splendour, such as that of Belfast City Hall. In

:58:51.:58:55.

Scotland, the notes pay tribute to the fantastic bridges and recognise

:58:56.:58:58.

the contributions of the likes of Walter Scott and Robbie Burns.

:58:59.:59:03.

Currency in Wales recognised people like Elizabeth fry. Previous notes

:59:04.:59:11.

have portrayed Michael Faraday, William Shakespeare, George

:59:12.:59:14.

Stephenson and the first Duke of Wellington. All great people, Mr

:59:15.:59:18.

Deputy Speaker. But non-, to my knowledge, have anything to do with

:59:19.:59:24.

my country. Is it not fair and sensible for us in Wales to use

:59:25.:59:28.

notes that recognise our historic landmarks, such as the incredible

:59:29.:59:40.

ones of my constituency, Port Menai in Wales and other greats, nominated

:59:41.:59:48.

the seventh most prominent person of the 20th century. David Lloyd

:59:49.:59:51.

George, the originator of the welfare state, and Bevin, the

:59:52.:00:03.

architect of the NHS. A case could also be made for what is arguably

:00:04.:00:06.

the most famous Welsh painting a wall. The painting of a Baptist

:00:07.:00:22.

chapel in the north of Wales is a national icon. Much as Constable's

:00:23.:00:30.

is in England. The Royal Mint produces Welsh specific coins. The

:00:31.:00:38.

Minister referred to the Royal Mint earlier in the debate. A national

:00:39.:00:47.

poll found that over 80% of the Welsh public supported these calls.

:00:48.:00:55.

82%, when I looked at the Pole on the website today. If we are

:00:56.:01:02.

unsuccessful tonight, I would hope that the UK Government would support

:01:03.:01:05.

Plaid Cymru and putting right this historic anomaly and bringing

:01:06.:01:12.

forward their own proposals. On the point of coins, I have to do have a

:01:13.:01:18.

Welsh pound coin here. It reeks of nationalist propaganda. Around the

:01:19.:01:26.

edge, it says, through an eye to my country, which I agree with, but

:01:27.:01:31.

issued by the Royal Mint. A grateful intervention, it makes my point

:01:32.:01:34.

entirely. There is no issue of principle, it is about finding the

:01:35.:01:37.

mechanism to deliver on this issue. The issue has had significant media

:01:38.:01:46.

coverage in Wales. Considering we are only two weeks away from the

:01:47.:01:50.

Welsh general election, I would put it to the Treasury ministers and the

:01:51.:01:55.

front bench that the election prospects of their candidates in

:01:56.:01:59.

Wales may be damaged if they choose to ignore the strong views of the

:02:00.:02:02.

people of Wales on this issue. The question is that Amendment four

:02:03.:02:11.

be made. Absolutely. Come on in. We would

:02:12.:02:25.

like to speak in support of both Amendment 4 and Amendment 5, in the

:02:26.:02:30.

name of the honourable member for Carmarthen East. In the debate at

:02:31.:02:34.

committee, the ministry highlighted the presence of the Royal Mint in

:02:35.:02:38.

Cardiff and its role in the production of our coins. Indeed, in

:02:39.:02:42.

reflecting upon that, it is worth noting that the ?1 coin reflects

:02:43.:02:48.

each nation with the Royal Arms, the three Lions, an oak tree for

:02:49.:02:53.

England, the Thistle and the lion rampart of Scotland, the flax plant

:02:54.:02:57.

and the Celtic cross for Northern Ireland, and, of course, both the

:02:58.:03:07.

Dragon and the leek for Wales. We also have pound coin celebrating the

:03:08.:03:11.

capital cities and the floral emblems of each nation in the United

:03:12.:03:15.

Kingdom. It seems anomalous that Scotland, with its own parliament,

:03:16.:03:19.

has its own banknotes, Northern Ireland, with its own Assembly has

:03:20.:03:23.

its own banknotes, but that Wales, with some flourishing Assembly, has

:03:24.:03:28.

no national identifier on circulating currency. I would like

:03:29.:03:32.

to thank my honourable friend for giving way. I do hope if this

:03:33.:03:43.

measure passes tonight that there will be some people from North Wales

:03:44.:03:48.

also featured on banknotes. Does he not agree this would be a fine

:03:49.:03:52.

opportunity to showcase the great figures of literature and music of

:03:53.:03:55.

Wales as well? I think my honourable member makes a fantastic suggestion.

:03:56.:04:06.

I might return with some suggestions from music, maybe if not literature.

:04:07.:04:10.

It is important that all aspects of Welsh culture are represented when

:04:11.:04:15.

the Welsh people come to choose what is on their banknotes. It seems to

:04:16.:04:21.

me also that a celebration of iconic Welsh scenes and places would be

:04:22.:04:25.

appropriate to consider, were that to be, for example, the steel

:04:26.:04:31.

industry of Port Talbot, or the mining communities of the valleys,

:04:32.:04:34.

even though the Tower colliery, which people who know about the

:04:35.:04:38.

history of mining in Wales will no was run as a cooperative when miners

:04:39.:04:45.

used redundancy payments to turn it into a very successful co-operative.

:04:46.:04:47.

I think this is imagery that would be well supported across the nation.

:04:48.:04:54.

In relation to suggestions that have already been made for Shirley

:04:55.:05:05.

Bassey, Aneurin Bevan, it would be great to see him on the banknote.

:05:06.:05:14.

Maybe his various quotes about members of the animal kingdom on

:05:15.:05:18.

there. My own suggestion for what it is worth, it is 30 years since the

:05:19.:05:22.

foundation, the formation of the great Welsh rock band The Manic

:05:23.:05:27.

Street Preachers, I would love to see them celebrated on the new

:05:28.:05:31.

banknote, they might have ideological objections to that. It

:05:32.:05:36.

is also the 20th anniversary since Everything Must Go. I don't mean the

:05:37.:05:40.

Chancellor's policy in relation to RBS shares, 20 years since the album

:05:41.:05:46.

of that name. As my honourable friend, who brought this amendment

:05:47.:05:52.

made clear, it is for the people of Wales, not people of York Cholla

:05:53.:05:57.

anywhere else, to decide what appears on the Welsh banknotes. --

:05:58.:06:02.

York or anywhere else. I do hope that the Conservative government

:06:03.:06:05.

does not permit the cardinal error of snubbing the Welsh people in

:06:06.:06:08.

their desire for their own banknotes. I never thought of the

:06:09.:06:16.

point that was just made from that sedentary position, so the lack of

:06:17.:06:21.

any Welsh banknotes appears to me to be an error and one that this

:06:22.:06:26.

amendment seeks to make good on. We would appreciate the Government

:06:27.:06:29.

agree with the amendment, we would appreciate the government taking on

:06:30.:06:32.

the task of investigating the potential costs and time frames such

:06:33.:06:37.

a change. But we will wholeheartedly and enthusiastically support these

:06:38.:06:45.

amendments. Thank you, anybody would think that there was a Welsh general

:06:46.:06:50.

election going on this afternoon, wouldn't they? I am so glad that we

:06:51.:06:55.

had time to have this debate this afternoon. I remember, Mr Deputy

:06:56.:07:01.

Speaker, the shock in Worcestershire that there was when Elgar, whose

:07:02.:07:09.

birthplaces in my constituency, was taken off the ?20 note. It was a

:07:10.:07:14.

very live political issue, I can assure him. So, I sympathise with

:07:15.:07:19.

the emotional attachment that we all have two hour banknotes and his

:07:20.:07:24.

desire to make the case that he has done so ably this afternoon, as

:07:25.:07:29.

indeed have other colleagues on having some Welsh characteristics in

:07:30.:07:33.

terms of banknotes. I will be going through why we are not actually

:07:34.:07:37.

going to agree to this particular amendment today, but also some other

:07:38.:07:41.

things that are happening in terms of our new banknotes, that I hope

:07:42.:07:44.

will go some way to giving Welsh colleagues some cheer.

:07:45.:07:49.

The history lesson, Mr Deputy Speaker. It is a rare in that it is

:07:50.:07:58.

a country that allows certain commercial banks to issue banknotes.

:07:59.:08:02.

And as he rightly pointed out, since the 1840s when the House passed the

:08:03.:08:07.

bank Charter act, there has been no new bank that has been allowed to

:08:08.:08:09.

issue commercial bank notes in the United Kingdom. To put it in

:08:10.:08:14.

context, the 1840s is a long time ago and the time both Elizabeth Fry

:08:15.:08:18.

who we now celebrate on the Bank of England ?5 note and Charles Darwin,

:08:19.:08:24.

who we find on the ?10 note. And since then, many of the banks that

:08:25.:08:28.

were originally authorised to issue banknotes have lost all surrendered

:08:29.:08:32.

their rights. The last private note issue in Wales was the north and

:08:33.:08:37.

south Wales bank. It lost its note issuing rights in 1908 when it was

:08:38.:08:43.

taken over by the Midland bank which has now been rebranded as HSBC.

:08:44.:08:48.

Today, only seven commercial notaries remain, three banks in

:08:49.:08:51.

Scotland and for in Northern Ireland. Bus-macro four. The

:08:52.:08:58.

Government is committed to preserving tradition as the

:08:59.:09:02.

amendments made by clause 36 of this will show. But turning to the

:09:03.:09:10.

amendment itself, I will give way. Will she agree with my earlier point

:09:11.:09:14.

that it is a commercial advantage to issue one's own notes? Why can that

:09:15.:09:24.

advantage not be extended to Wales? Well, it comes to the point I was

:09:25.:09:28.

just about to answer that in terms of the detail of this amendment, it

:09:29.:09:32.

seeks to confer the right to issue commercial banknotes, a clear

:09:33.:09:36.

commercial advantage, in the country of Wales to just one bank. The

:09:37.:09:40.

Lloyd's Banking Group. This appears to be based on a link to the right

:09:41.:09:45.

to issue is that wasn't broken over a century ago. I would like to

:09:46.:09:53.

clarify for the honourable member, the taxpayer only owns just under

:09:54.:09:57.

10% of Lloyd's Banking Group, but it is true that in the past, part of

:09:58.:10:02.

and indeed today, part of Lloyds banking group as a commercial bank

:10:03.:10:07.

note issuance operation and that made be why he has chosen to focus

:10:08.:10:11.

on one bank in his amendment. Again, that was due to the acquisition of

:10:12.:10:16.

the Bank of Scotland Opposition -- operation which is authorised issue

:10:17.:10:20.

banknotes in Scotland. To extend the privilege to issue banknotes give

:10:21.:10:22.

back commercial advantage in Wales to do this one bank as outlined in

:10:23.:10:28.

his amendment would raise competition and commercial issues

:10:29.:10:31.

for others. I like the wide range of suggestions we have heard for

:10:32.:10:37.

different people to be represented on a Welsh banknotes. I reiterate

:10:38.:10:41.

the point I made earlier, that the coins in our pocket Art minted in

:10:42.:10:49.

Wales -- are minted in Wales. And I appreciate the motive behind this

:10:50.:10:52.

amendment to deal with that symbolic issue that he feels so strongly

:10:53.:10:57.

about rather than with the pressing economic or practical need to have

:10:58.:11:01.

different banknotes. I can confirm that the Bank of England has already

:11:02.:11:03.

announced that future banknotes, starting with the polymer ?5 note,

:11:04.:11:10.

which will be issued from September 2016, will include symbols that

:11:11.:11:15.

represent all four home nations. For Wales, the image will be taken from

:11:16.:11:20.

the Royal coat of arms and the royal badge of Wales. And the bank

:11:21.:11:23.

recently announced that the design for the ?5 note will be revealed on

:11:24.:11:29.

the 2nd of June 2016. So I am very glad we have had the chance to

:11:30.:11:34.

discuss the merits and he will understand why I cannot support the

:11:35.:11:37.

particular amendment that he has tabled tonight. But I welcome the

:11:38.:11:44.

chance to put out the message that there will be an important symbol of

:11:45.:11:50.

Wales on the new note. Thank you very much. As many as are of the

:11:51.:11:59.

opinion, say "aye". To the contrary, "No". Division, clear the lobby.

:12:00.:13:37.

The question that amendment for be made. As many as are of the opinion,

:13:38.:13:44.

say "aye". Phone Bowness. To the contrary, "No".

:13:45.:20:12.

Order! Order! The eyes to the right, 239. The nose to the left, to his --

:20:13.:23:29.

301. The ayes to the right, 239, the no's

:23:30.:23:50.

to the left, 301. The no's covered, the no's habit. We now come to

:23:51.:23:56.

government amendment three. The question is will the amendment be

:23:57.:24:00.

made, as many of that opinion say aye? The ayes have it, the ayes

:24:01.:24:11.

habit. The Minister to move. -- the ayes have it. I beg to move that

:24:12.:24:17.

this bill now be read a third time. It has been a pleasure to take this

:24:18.:24:21.

legislation through the house, there has been a very good level of

:24:22.:24:24.

interest from members on all sides of the house and a wealth of

:24:25.:24:28.

suggestions and recommendations have been made which is testament to how

:24:29.:24:32.

important the issues in this bill are. Indeed some of the suggestions

:24:33.:24:37.

have made their way into the bill. The bill will make the bank of

:24:38.:24:41.

England more transparent and accountable to Parliament and the

:24:42.:24:45.

public. Further strengthen standards in the financial services sector and

:24:46.:24:49.

strengthen protections for consumers, especially when accessing

:24:50.:24:54.

the new pensions. Building on the fundamental reforms to the regular

:24:55.:24:59.

tour introduced by the financial services act 2012 the Bill delivers

:25:00.:25:04.

a set of important evolutionary changes to the bank. It ends the

:25:05.:25:10.

status of the regulation authority and create a new prudential

:25:11.:25:13.

regulation committee, in the same footing as the monetary policy

:25:14.:25:16.

committee and the financial policy committee. It makes the oversight

:25:17.:25:20.

function is the responsibility of the whole court, ensuring every

:25:21.:25:24.

member of the court, executive and nonexecutive can be held to account

:25:25.:25:28.

for the use of these functions. And it enhances the accountability of

:25:29.:25:32.

the bank to Parliament by making the whole bag subject for the first time

:25:33.:25:38.

to any or oversight. -- the whole bank. Mr Speaker as I may, something

:25:39.:25:48.

I said earlier, I said in a old and in how high, it is this bill that

:25:49.:25:54.

brings in the NA oh oversight. And it brings in the recommendations of

:25:55.:25:57.

the worst review, updating the requirements of timing for monetary

:25:58.:26:00.

policy committee, publications and meeting. As the Right Honourable

:26:01.:26:06.

member from Chichester said, this bill brings the Bank of England more

:26:07.:26:10.

up-to-date as an institution and in doing so it should greatly improve

:26:11.:26:14.

the scope for making it accountable to Parliament and to the public.

:26:15.:26:19.

During the passage of the bill we have rightly devoted considerable

:26:20.:26:21.

time to the question of the appropriate role of parliament, the

:26:22.:26:26.

Treasury Select Committee plays a crucial role in providing expectant

:26:27.:26:30.

scrutiny of the chief executive and the agreement we have announced

:26:31.:26:34.

today reinforces that. The second aspect of the bill strengthens

:26:35.:26:40.

conduct in the financial sector by strengthening the regime to all

:26:41.:26:45.

firms covered by the discredited authorised persons regime that we

:26:46.:26:49.

inherited. We all agreed on the importance of high standards of

:26:50.:26:53.

conduct in the UK financial services industry, this government has

:26:54.:26:56.

already taken the initiative in this area, we take a key step by bringing

:26:57.:26:59.

in the regime for the banking sector in March this year, the expansion of

:27:00.:27:04.

this new regime to all authorised persons will enhance personal

:27:05.:27:07.

responsibility for senior management across the industry and raise

:27:08.:27:11.

standards of conduct more broadly. The third part of this bill

:27:12.:27:16.

introduces support for consumers accessing the new pension freedoms.

:27:17.:27:22.

To support consumers who from April 2017 will be able to sell the

:27:23.:27:25.

annuity income stream in the secondary market for annuities, the

:27:26.:27:29.

bill will extend the scope of the pension in the service to cover

:27:30.:27:33.

these consumers and introduce a requirement which in effect ensures

:27:34.:27:37.

producers with a high-value annuity is even appropriate financial advice

:27:38.:27:41.

before making the decision to sell their annuity income stream. These

:27:42.:27:47.

measures will make consumers better informed and less vulnerable to

:27:48.:27:51.

mis-selling and scams. In order to ensure fairness for people seeking

:27:52.:27:55.

to access their pensions hourly, the bill will also give the SC a new

:27:56.:28:00.

duty to cap early exit charges that act as a deterrent. This will

:28:01.:28:05.

provide real protection to consumers in contract -based pension schemes

:28:06.:28:07.

who are looking to make use of the freedoms. The bill also supports the

:28:08.:28:14.

government's consumer protection measures by giving you Treasury new

:28:15.:28:19.

powers to provide financial assistance that act to provide

:28:20.:28:22.

financial assistance to illegal money lending teams targeting loan

:28:23.:28:26.

sharks. We have added the amendment tabled by the Honourable member from

:28:27.:28:32.

Broxbourne. Too close, Mr Deputy Speaker, I would like to thank all

:28:33.:28:35.

honourable and right Honourable members who have contributed to the

:28:36.:28:39.

debates on this bill both by speaking at the tabling of

:28:40.:28:43.

amendments. I would like to thank in particular all of the members of the

:28:44.:28:47.

public bill committee for their efforts and for the time spent going

:28:48.:28:51.

through the bill was by clause. The member for a lead East and the

:28:52.:28:55.

member for Rover Hampton Southwest provided the talent in discussion

:28:56.:28:59.

throughout the passage of the bill. The member for East Lothian at the

:29:00.:29:02.

right honourable member for Kirkcaldy and Cowdenbeath is also

:29:03.:29:09.

some close scrutiny to the bill. The Right Honourable member from

:29:10.:29:12.

Chichester made some valuable contributions particularly regarding

:29:13.:29:15.

the Treasury Select Committee matters which have been most helpful

:29:16.:29:20.

and insightful. I would like to also thank the Treasury whips, the member

:29:21.:29:24.

for Truro and Falmouth, the member from Central Devon who have provided

:29:25.:29:27.

me with so much support both during and outside of the bill debates. And

:29:28.:29:31.

the chairs of the public Bill committee the Honourable member for

:29:32.:29:35.

optimum and sale West, in the Honourable member from Sedgefield,

:29:36.:29:41.

as well as your -- as well as yourself Mr Deputy Speaker who have

:29:42.:29:45.

handled our scrutiny so well. I would like to thank my Parliamentary

:29:46.:29:49.

Private Secretary who took on the important and thankless task of

:29:50.:29:52.

ensuring I got the right grieving during sessions and supporting me

:29:53.:29:58.

more generally. -- I got the right grieving during the sessions. And

:29:59.:30:03.

also to Lord Ashcroft that others who took this bill through the other

:30:04.:30:06.

place and will continue to do so when the other place considers the

:30:07.:30:10.

amendments we have made. Finally I would like to give thanks to the

:30:11.:30:13.

organisations that have assisted us in developing the bill, the Bank of

:30:14.:30:18.

England, and the Financial Conduct Authority as well as the sincere

:30:19.:30:22.

thanks that I ought to Treasury officials, lawyers and Parliamentary

:30:23.:30:25.

Counsel who have spent many hours in the box drafting amendments and

:30:26.:30:32.

meetings -- minutes for this debate. We have had useful discussions

:30:33.:30:37.

across all sides of the house, even in the instances where we did not

:30:38.:30:39.

agree and has to settle through a vote. We have shown an understanding

:30:40.:30:44.

of each other's position and approved the legislation as a

:30:45.:30:47.

result. This bill will go back to the other place where their

:30:48.:30:50.

Lordships will consider the useful changes we have made in this place.

:30:51.:30:54.

I hope they will welcome the legislation in its current form. To

:30:55.:30:59.

conclude, this bill makes changes to strengthen the governance and

:31:00.:31:01.

accountability for the Bank of England, it will contribute to the

:31:02.:31:05.

government's commitment to strengthen standards across the

:31:06.:31:07.

financial services committee -- industry and ensure that consumers

:31:08.:31:12.

are protected. I commend these are bidding to the house. The question

:31:13.:31:17.

is the bill be ready third time. Thank you. It is my pleasure to

:31:18.:31:23.

speak for the opposition in today's third reading of the bank of England

:31:24.:31:28.

and financial services Bill. Very kindly the tragedy -- the chair of

:31:29.:31:31.

the Treasury Select Committee referred to make good humour and

:31:32.:31:35.

good nature in my speeches earlier, I am afraid if you are here now he

:31:36.:31:38.

would be disappointed with the speed I about to make. People can be

:31:39.:31:42.

forgiven for thinking I am returning to what some would think is my poor

:31:43.:31:47.

faced modus operandi. The role of government in legislating for

:31:48.:31:52.

financial stability and ensuring the Bank of England act in the interest

:31:53.:31:58.

of the wider economy means getting the legislation right, writing of

:31:59.:32:02.

the 2008 banking crisis is an important task for any responsible

:32:03.:32:06.

government, one that governments around the world have focused on

:32:07.:32:08.

fulfilling throughout the past decade. It is a task that has been

:32:09.:32:13.

attempted since the bankers crisis of 2008, but today the bank -- the

:32:14.:32:19.

bankers Chancellor is threatening the setback this task. This bill has

:32:20.:32:23.

seen a number of changes since it first appeared in the other place,

:32:24.:32:29.

some of them for the better. But it is a precipitous changes that the

:32:30.:32:32.

government is making the financial services regulation. Through its new

:32:33.:32:35.

settlement with the financial sector including through measures in this

:32:36.:32:39.

bill would suggest the government has failed to learn the lessons of

:32:40.:32:45.

the 2008 bankers crisis. This bill Mr Deputy Speaker is a missed

:32:46.:32:50.

opportunity. The measures we have challenged at second reading, in

:32:51.:32:55.

committee and reports include the proposed abolition of the bank 's

:32:56.:32:59.

oversight committee, the proposed veto of the National Audit Office

:33:00.:33:04.

powers of investigation, the proposed downgrading of the power of

:33:05.:33:08.

the prudential regulation authority to a committee of the bank and the

:33:09.:33:14.

proposed reversal of the presumption of responsibility for misconduct

:33:15.:33:19.

cases for senior managers. We have also, however, welcomed the number

:33:20.:33:23.

of measures including the Lord's stage concessions on the powers of

:33:24.:33:28.

oversight for the banks nonexecutive directors. The reversal of the veto

:33:29.:33:31.

on the National Audit Office powers of investigation and the measures

:33:32.:33:37.

announced to fund HMRC's illegal money lending teams. But we are Mr

:33:38.:33:45.

David Speaker disappointed that other proposals have not been

:33:46.:33:49.

accepted by the government. -- Mr Deputy Speaker. The week of the

:33:50.:33:57.

Panama papers has reawakened public concern over our financial system.

:33:58.:34:01.

The publication of thousands of documents detailing the systematic

:34:02.:34:05.

use of tax havens for the registration of secret trusts and

:34:06.:34:07.

shell companies and serviced by UK banks and holding trillions of

:34:08.:34:13.

pounds out of reach of HMRC has rightly outraged people across the

:34:14.:34:21.

UK. And across the globe. That is my LO today be offered the government

:34:22.:34:26.

an opportunity. -- that is why earlier today we offered the

:34:27.:34:30.

government an opportunity. The opportunity to deliver the necessary

:34:31.:34:35.

tax transparency measures with our new clause 14. That clause if the

:34:36.:34:38.

government had supported it would have instituted a new principle for

:34:39.:34:44.

the SCA, the principle of combating abusive tax avoidance arrangements.

:34:45.:34:48.

-- FCA. Including establishing a register of beneficial owners of

:34:49.:34:54.

trusts serviced by UK banks. But of course that in itself is not

:34:55.:34:59.

sufficient. And Labour has set out our tax transparency enforcement

:35:00.:35:03.

plan, and our new clause LO today raised a vital area of the UK banks

:35:04.:35:09.

involvement in the Panama papers. Which the FCA has now asked them to

:35:10.:35:14.

report upon. The government itself has set out some initial plans but

:35:15.:35:19.

with respect has not in her view grasp the ball by the horns, it has

:35:20.:35:25.

itself been dragged there by campaigners, by charities and

:35:26.:35:30.

commentators, urging quite rightly action on anti-abuse rules and

:35:31.:35:36.

country by country reporting. It is also, Mr Deputy Speaker, the

:35:37.:35:40.

regulation of bank activity here in the UK that has been such a dominant

:35:41.:35:44.

issue in recent years. The government has today rolled back on

:35:45.:35:50.

and you turned on. The presumption of responsibility has set out as

:35:51.:35:56.

applies to senior managers. To avoid being found guilty of misconduct

:35:57.:36:00.

when there has been misconduct in an area of which they are responsible

:36:01.:36:02.

they will have to show that they took reasonable steps to prevent

:36:03.:36:07.

that contravention. This bill removes that one is on top bankers,

:36:08.:36:14.

an onus that is entirely reasonable, entirely proportionate and as very

:36:15.:36:21.

better experience tell the British people, entirely necessary.

:36:22.:36:25.

Misconduct and misdemeanours in financial services are sadly not

:36:26.:36:30.

merely a pale from our history, in 2015 for example the FCA had to find

:36:31.:36:37.

firms more than ?900 million. -- had to find firms. There was also the

:36:38.:36:41.

libel or scandal and the mis-selling of PPI to the tune of ?33 million.

:36:42.:36:50.

The presumption of responsibility is so reasonable and necessary that the

:36:51.:36:52.

policy was introduced with cross-party support. That should not

:36:53.:36:58.

be forgotten and it is remarkable, Mr Deputy Speaker, that's just days

:36:59.:37:02.

after the leak of the Panama papers and pressure on the Prime Minister

:37:03.:37:07.

to defend his creative financial arrangements that the government can

:37:08.:37:11.

come to this house and defend its decision to reverse regulation it's

:37:12.:37:17.

chosen to bring in back in 2013 following the car brands of work of

:37:18.:37:20.

the chair of the Treasury Select Committee and my colleague Lord

:37:21.:37:24.

McFaul and others of the Parliamentary commission on banking

:37:25.:37:28.

standards and it is a measure of course that they are yet even to

:37:29.:37:34.

implement, a measure rolled back by a bankers Chancellor under pressure

:37:35.:37:37.

from those who would have been scrutinised. This change of policy

:37:38.:37:44.

does not take place in isolation but as I have already said as part of

:37:45.:37:48.

the Chancellor 's new settlement with the financial sector.

:37:49.:37:58.

Another idea was to strengthen the role of the Treasury Select

:37:59.:38:03.

Committee in relation to the appointment of the chief executive

:38:04.:38:07.

of the FCA. It is the Treasury's influence over them and financial

:38:08.:38:12.

regulation has been subject to so much debate and concern in the past

:38:13.:38:18.

year. Debate and concern about the removal of Martin Wheatley, debate

:38:19.:38:21.

and concern about the scrapping of the FCA review into banking culture

:38:22.:38:25.

and more widely, as part of the post-crushed debate, there have been

:38:26.:38:30.

concerns about whether or not bank capitalisation and beverage would be

:38:31.:38:35.

an sufficient levels and whether or not is suitably strong written and

:38:36.:38:37.

friends will actually be implemented. Added to this toxic

:38:38.:38:44.

cocktail of the bankers, chancellors bonus stirring is his unhealthy

:38:45.:38:51.

obsession with flogging off the Government's shares at a huge cost

:38:52.:38:54.

to the public purse. I have previously asked the minister if the

:38:55.:38:59.

Government will establish a floor price for the sale of RBS shares and

:39:00.:39:04.

they have with Lloyds, or do the accent the Chancellor got it wrong

:39:05.:39:09.

when he said his lost leader last year would lead to better sales?

:39:10.:39:14.

Also, Mr Deputy Speaker, there is also the issue of pensioner master

:39:15.:39:19.

trusts. During the committee stage, the minister told my colleague, the

:39:20.:39:22.

shadow financial Secretary, that they would bring forward legislation

:39:23.:39:27.

with the pensions minister who has since told the DWP Select Committee,

:39:28.:39:33.

I have been pressing for a pensions Bill, but so far, we don't have one,

:39:34.:39:38.

even though the Government couldn't protect savers without one. Will the

:39:39.:39:43.

Minister said when the Government will take action? This bill, Mr

:39:44.:39:47.

Deputy Speaker, is a missed opportunity. A missed opportunity to

:39:48.:39:50.

demonstrate how the Bank of England could carry out its work in the most

:39:51.:39:55.

efficient way possible, with transparency, accountability in its

:39:56.:39:58.

decision making, serving the interests of the people who sent us

:39:59.:40:02.

here to represent them. A missed opportunity to demonstrate the

:40:03.:40:06.

senior managers in the financial sector who continue to do their jobs

:40:07.:40:11.

while being effectively and inappropriately regulated. --

:40:12.:40:13.

appropriately. More opportunities for the missed target Chancellor.

:40:14.:40:18.

But the context of this poll is vital to understanding our concerns

:40:19.:40:23.

and the concerns and demands of the wider public. We are eight years on

:40:24.:40:27.

from the economic crisis, the bankers crisis which brought the

:40:28.:40:30.

financial services sector and our country to its knees and was rescued

:40:31.:40:34.

by the decisive action of the then Prime Minister. I will give way. Do

:40:35.:40:41.

not agree we should be taking these banks over and run them... These

:40:42.:40:46.

dodgy banks that have been troubled all these years? The Prime Minister

:40:47.:40:52.

at the time did step in and take appropriate action. The important

:40:53.:40:55.

thing is the lessons of the financial crisis and the banking

:40:56.:40:59.

crisis or learned. I believe those on this side of the House have

:41:00.:41:02.

learned their lessons, but I'm afraid those on the Government

:41:03.:41:08.

benches have not. I would ask Mr Deputy Speaker, does the Chancellor

:41:09.:41:12.

and Government still not understand the widespread anger out there? Do

:41:13.:41:15.

the Chancellor and the Government not recognise the public's deep

:41:16.:41:19.

distaste for an ever expanding horror story of bailed out bankers

:41:20.:41:24.

not being brought to book and Panama Papers shining a light on the

:41:25.:41:29.

squalid practice of the super rich squirrel and away money off sure

:41:30.:41:33.

that Britain needs. Britain needs family files schools and hospitals

:41:34.:41:39.

and yes, to get the UK's debt down which has rocketed on the

:41:40.:41:44.

Chancellor's watch. And as I said on second reading, all of this well

:41:45.:41:49.

there are cuts to pay, to pensions, to welfare, councils and to our

:41:50.:41:54.

services. The public is right to remember that because of the

:41:55.:42:00.

behaviour of some top bankers, people who this House is meant to

:42:01.:42:04.

represent have lost their homes and jobs. We should never forget that it

:42:05.:42:08.

was the bank's crisis that caused the deficit at the Government have

:42:09.:42:13.

relied upon as their justification for the political ties to cut our

:42:14.:42:17.

public services, cut funding to our local authorities, the incomes of

:42:18.:42:21.

working people and support for the most vulnerable people in our

:42:22.:42:26.

communities. The global financial class states used increasingly

:42:27.:42:32.

deficits and stored the economy. It also gives the Government the

:42:33.:42:35.

opportunity to carry out their long harboured ideological desire,

:42:36.:42:40.

decades-old, to cut public services and wither away the states. We need

:42:41.:42:47.

a healthy and effective banking sector, but one that is

:42:48.:42:50.

appropriately regulated, that serves the interest of the whole economy

:42:51.:42:55.

but does not hurt ordinary people or small and medium sized businesses

:42:56.:42:58.

and delivers the investment our country needs for long-term growth.

:42:59.:43:03.

The Conservative Government climb-down on the presumption of

:43:04.:43:07.

responsibility, which they had previously supported, will hinder,

:43:08.:43:11.

not hell, the fulfilment of those ambitions. Personal responsibility

:43:12.:43:16.

is vital for the operation of our regulatory systems. The Chancellor's

:43:17.:43:23.

policy U-turn produces exactly the responsibility that the

:43:24.:43:25.

Parliamentary commission on banking standards recommended in its

:43:26.:43:29.

reports. Scrapping a key measure before it added even been tested

:43:30.:43:35.

makes no sense. Unless, of course, the Chancellor is just following

:43:36.:43:40.

bank's orders. The startling and was a bit as scrapping of a widely

:43:41.:43:44.

welcomed the measure shows there is a very real risk of failing to learn

:43:45.:43:50.

the lessons of the crisis of the bankers and that, Mr Deputy Speaker,

:43:51.:43:55.

is why we are proposing this Bill today and I urge all members to do

:43:56.:44:03.

the same. Mr Deputy Speaker, we will also from our side of the House be

:44:04.:44:12.

posing the bill at third reading. The Chancellor Treasury questions

:44:13.:44:15.

today came up with a phrase and I wrote it down, because I was rather

:44:16.:44:22.

taken with it. He was quite certain that we had better and tougher

:44:23.:44:26.

regulation of the financial system. It is a good test. It is a good test

:44:27.:44:33.

of this Bill. Do we have tougher regulation, Mr Deputy Speaker? Well,

:44:34.:44:40.

as the law now stands this evening, if a name and manager, a senior

:44:41.:44:47.

manager, in any major financial institution discovers that there has

:44:48.:44:54.

been major corruption, major wrong doing, major regulatory failure in

:44:55.:44:59.

his or her bank on his or her watch, they are culpable, unless they can

:45:00.:45:06.

prove to the FCA that they took reasonable steps to stop that

:45:07.:45:11.

happening. They are now responsible, as we speak, and have been for a

:45:12.:45:16.

month and a half. If we pass this Bill tonight, that changes. That

:45:17.:45:24.

manager will no longer be personally responsible. They will be able to

:45:25.:45:29.

argue, actually, I ticked all the boxes, I signed all the forms, I

:45:30.:45:36.

went to all the group therapy sessions with my trading floor and

:45:37.:45:40.

told them to be good boys and girls. And do you know what? They weren't,

:45:41.:45:45.

they didn't. They hid it from the! And so we will go through the whole

:45:46.:45:49.

cycle again. But the law as it stands at the moment, as passed by

:45:50.:45:57.

this Government and this Chancellor, makes each individual senior named

:45:58.:46:02.

manager responsible like the captain of a ship or a ferry, if something

:46:03.:46:06.

goes wrong, they are responsible, they cannot claim otherwise. Pass

:46:07.:46:13.

this Bill and we are far from toughening the law, we weaken the

:46:14.:46:17.

law. And the only explanation we have heard from this Government, Mr

:46:18.:46:21.

Deputy Speaker, is that it is a bit more complicated than that. Because

:46:22.:46:25.

in this Bill we are going to widen the bar people to tens of thousands

:46:26.:46:29.

will be designated responsible people when it comes to identifying

:46:30.:46:33.

who is in charge when something went wrong. I get to that. It is

:46:34.:46:37.

perfectly possible, as we tried in committee, to ring fence and say,

:46:38.:46:42.

well, very senior people in a major banks, systemically dangerous banks,

:46:43.:46:45.

they should be held personally responsible unless they can prove

:46:46.:46:50.

they took proper steps. But, no. The Government is using the widening of

:46:51.:46:56.

the designated person's regime in order to be able to weaken and water

:46:57.:47:01.

down the legislation as it currently exists. And that tells me, Mr Deputy

:47:02.:47:06.

Speaker, that this Government is not actually serious about being

:47:07.:47:11.

tougher. They are only concerned about getting by. It was an

:47:12.:47:15.

interesting thing, an interesting point of debate during the

:47:16.:47:21.

committee, when we were talking about transfer vehicles. They were

:47:22.:47:29.

to do with how the insurance market reinsurers itself to spread the

:47:30.:47:35.

risk. And in the Bill, it is a good thing to put into the Bill, there

:47:36.:47:43.

are other clauses which give the Treasury the power to regulate in

:47:44.:47:48.

its other fashion, to use the Chancellor's keyword, to regulate in

:47:49.:47:53.

its other fashion the use of transfer vehicles in the reinsurance

:47:54.:48:05.

market. What is happening is, in the insurance market, the reinsurance

:48:06.:48:09.

market, where the existing insurers can offset some of the risk, they

:48:10.:48:14.

usually offset it by selling some of the risk to specialist wholesale

:48:15.:48:18.

houses who buy into the risk but whose capital covers the risk if

:48:19.:48:23.

something goes wrong. Instead, the insurance market is moving to

:48:24.:48:25.

reassuring through the use of specialist vehicles of the same kind

:48:26.:48:32.

that got us into trouble in the lead up to 2007. It was interesting that

:48:33.:48:38.

when this was being discussed, ministers argued we needed to be the

:48:39.:48:42.

regulatory framework in place so that could make it easier to shift

:48:43.:48:48.

the burden of the really in a surer and as a market away from

:48:49.:48:52.

wholesalers who capitalised to be able to do it through special

:48:53.:49:01.

vehicles that we use all the tricks and trades of the financial market

:49:02.:49:05.

led to the disaster of 2007. That is said to me that deep down within

:49:06.:49:08.

this Bill, the Government actually is up to its old tricks of wanting

:49:09.:49:16.

to deregulate and make things less regulated, less tougher regulation,

:49:17.:49:19.

rather than more. On those grounds, I think the Bill fails its test and

:49:20.:49:24.

we should vote against it. There are good things in the Bill. I think in

:49:25.:49:31.

particular, I figure can pride ourselves through the committee

:49:32.:49:34.

stage until today at the report stage, was that the Government was

:49:35.:49:39.

persuaded, and I use the word in inverted commas, to take on the ad

:49:40.:49:43.

vice of the Treasury Select Committee. And for the first time,

:49:44.:49:50.

they granted the president that the chief executive of the FCA in the

:49:51.:49:54.

future will be subject, de facto, to having their appointment approved by

:49:55.:50:01.

the Treasury Select Committee. That is to say, by this House, rather

:50:02.:50:06.

than the executive. That two things. First of all, it makes the FCA more

:50:07.:50:11.

accountable, because it is accountable to this House rather

:50:12.:50:15.

than the executive. Secondly, it protects the FCA from interference

:50:16.:50:18.

by the executive. That is a good precedents. If that president is

:50:19.:50:24.

extended, then we will be able to ensure that all the key regulatory

:50:25.:50:31.

bodies and their senior staff are approved by this House and in

:50:32.:50:35.

particular, ultimately, that the governor of the Bank of England is

:50:36.:50:39.

subject to scrutiny and approval by this House, rather than simply been

:50:40.:50:43.

appointed by the executive. That is important because of the very large

:50:44.:50:47.

powers that are being transferred to the Bank of England since the crisis

:50:48.:50:52.

of 2007. But there are still loose ends, and still -- and now I come to

:50:53.:50:58.

the word better in the Chancellor's report. Have things got better? A

:50:59.:51:02.

little bit, I think, with the ability of this House to protect the

:51:03.:51:11.

FCA and have a role in appointing the head of the FCA. They're all

:51:12.:51:18.

loose ends at the FCA, Mr Deputy Speaker. Much of this bill and

:51:19.:51:24.

debate has been about the FCA. The Financial Conduct Authority is in

:51:25.:51:27.

the last instance the consumer's champion. It regulate the conduct of

:51:28.:51:35.

the banks in regard to how they sell and much of the problems we've had

:51:36.:51:40.

in the last decade has been the mis-selling of the banks. I think

:51:41.:51:44.

every member of this House will know the number of legacy organisations

:51:45.:51:47.

and campaigns, because we have still not put right the mis-selling and

:51:48.:51:51.

there was a whole range of banks and products since the turn of the

:51:52.:51:59.

millennium. The FCA is important and protecting it is important because

:52:00.:52:02.

in the last regard, it is the consumer's champion. A view weeks

:52:03.:52:08.

ago, I went to their headquarters and at a meeting with Mr John

:52:09.:52:13.

Griffith Jones, who is the chair man of the FC.

:52:14.:52:19.

Outputted to him, I said you are the consumer champion. He does not feel

:52:20.:52:28.

that the FCA is a consumer champion. He said that is going too far.

:52:29.:52:34.

Because in the end at the moment the FCA is still too much the creature

:52:35.:52:43.

of the Treasury. If you want a tougher and better regulatory regime

:52:44.:52:47.

what you need to do is break the FCA really independent. We are getting a

:52:48.:52:56.

new Chief Executive of the FCA, but I am not going to stand here tonight

:52:57.:53:03.

and offer platitudes and pleasantries, Mr Deputy Speaker. I

:53:04.:53:08.

think when we get the new Chief Executive, I think the chairman of

:53:09.:53:11.

the SCA should consider his position because I think we also need a new

:53:12.:53:16.

chairman of the FCA. We are only starting the road of making sure our

:53:17.:53:19.

regulatory bodies are fit for purpose. We have not got there yet.

:53:20.:53:26.

Finally, I feel there are many people in Wales and Scotland and

:53:27.:53:30.

Northern Ireland to disappointed that the government stood on

:53:31.:53:34.

ceremony and decided it would not widen the remake of the membership

:53:35.:53:39.

of the core bodies of the Bank of England starting with this court to

:53:40.:53:43.

allow proper representation of all of the regions and nations through

:53:44.:53:50.

the north of England. Most people in this country and certainly the

:53:51.:53:54.

people in the Celtic regions are long of the view that the bank of

:53:55.:54:00.

England as the banks of the key regulatory authorities are far too

:54:01.:54:04.

focused on the Square mile of the City of London and the needs of the

:54:05.:54:10.

City of London. We will never, never have a tougher, better financial

:54:11.:54:13.

regulatory system unless we widen that we met until the whole nation,

:54:14.:54:20.

the individual nations and the nation of the UK are represented.

:54:21.:54:24.

Until we do that the Bank of England is still suspect. That was not

:54:25.:54:31.

delivered. So there is still across this country, there is still a

:54:32.:54:37.

suspicion that the banking regulars of the system operates in the

:54:38.:54:40.

interests of the mentally of the bankers rather than the people and

:54:41.:54:46.

until that changes we will not have a better or tougher regulatory

:54:47.:54:50.

system, we will simply have the same old regulatory system dressed up

:54:51.:54:55.

under a different name, and the same old banking crisis will be round the

:54:56.:55:04.

corner yet again. Order! Order! Under the order of the house of the

:55:05.:55:07.

first of federally I must now put and indeed I will put the question

:55:08.:55:12.

necessary to bring proceedings to a conclusion. As many in favour of

:55:13.:55:20.

CIA, contrary now. Division. Clear the lobby. -- in favour say I.

:55:21.:57:49.

Order! Order! The question is will it now be read at the third time? As

:57:50.:57:58.

many in favour CIA, to the contrary now. Tellers for the eyes, Sarah

:57:59.:58:04.

Newton and Jackie Doyle Price. Tellers for the nose, Judith Cummins

:58:05.:58:14.

and Jeff Smith. -- for the nos, Judith Cummins and Jeff Smith.

:58:15.:03:39.

Order, order! The ayes to the right, 298. The noes to the left, 237.

:03:40.:08:11.

Thank you. The ayes to the right, 298, the noes to the left, 237. So

:08:12.:08:18.

the ayes have it, the ayes have it. Unlock! Order, we now come to Motion

:08:19.:08:24.

to move? The question is as on the to move? The question is as on the

:08:25.:08:28.

order papers. As many as are of the opinion, say "aye". Vote-no macro. I

:08:29.:08:33.

think the ayes have it, the ayes have it. Mr Gavin Williamson. Thank

:08:34.:08:39.

you, Mr Speaker. I would like to present a petition today signed by

:08:40.:08:44.

4962 people who have joined me in our campaign against building on the

:08:45.:08:49.

green land between it grates whirly and chiselling K. The residents of

:08:50.:08:57.

those places in the South Staffordshire constituency and

:08:58.:09:00.

others, declared that the current proposals to build 136 houses will

:09:01.:09:09.

identity of our individual villagers identity of our individual villagers

:09:10.:09:11.

and could cause substantial environmental damage and it further

:09:12.:09:18.

notes that residents have already successfully fought these proposals

:09:19.:09:24.

at a local council level in 2013. The petitioners therefore request

:09:25.:09:28.

that the House of Commons urges the Government to take all possible

:09:29.:09:32.

steps to encourage South Staffordshire District Council to

:09:33.:09:36.

reject these proposals and if the proposals go to the planning

:09:37.:09:40.

Inspectorate, to also encourage them to reject the proposals so that the

:09:41.:09:44.

green belt can be conserved for future generations.

:09:45.:09:58.

come now to the journeyman. Beg to come now to the journeyman. Beg to

:09:59.:10:11.

move? Thank you. The question is that this House do now adjourned. --

:10:12.:10:21.

Journal. Thank you, Mr Speaker. I'm grateful for this debate and far

:10:22.:10:25.

Right Honourable members for expressing interest in it. I'm

:10:26.:10:29.

particularly that the right back remember he's here to answer for the

:10:30.:10:35.

Government an eye. I know the nation sleeps more soundly and sweetly in

:10:36.:10:37.

the knowledge he is our security minister. Mr Speaker, the question

:10:38.:10:44.

is not a new one, we have grappled with how we view and respond to our

:10:45.:10:50.

fellow citizens going abroad to fight in foreign wars, not for

:10:51.:10:54.

money, as mercenaries, but because they believe it is the right thing

:10:55.:11:00.

to do. Joining the side of the conflicts which ostensibly at least,

:11:01.:11:03.

is certainly to those unversed in the complexities of an individual

:11:04.:11:09.

conflict, holds widespread public support is viewed by many, but at

:11:10.:11:14.

that time the majority as the right side. Or is in one way or another,

:11:15.:11:22.

Britain's ally. 50,000 English, Scots, Welsh and Northern Ireland

:11:23.:11:26.

fought in the American Civil War. Several thousand fought in the

:11:27.:11:30.

Spanish Civil War, as memorialised by George Orwell. And dozens, more

:11:31.:11:35.

recently, of the British volunteers joined Croatian units during the

:11:36.:11:42.

Yugoslav wars between 1991 and 1995. After the experience of the American

:11:43.:11:46.

Civil War, Parliament passed the foreign enlistment act, which

:11:47.:11:50.

prevents Britons from a listing in a foreign army at war with another

:11:51.:11:54.

state, currently at peace with the United Kingdom. But that act was

:11:55.:12:01.

never properly enforced. It was and remains extremely difficult to

:12:02.:12:06.

monitor and prosecute. Though was returning from the Spanish Civil War

:12:07.:12:10.

were frequently expecting to be given a hero 's welcome. In fact,

:12:11.:12:15.

invariably, they were treated with suspicion by the police. They faced

:12:16.:12:20.

workplace discrimination and many were even prevented from a listing

:12:21.:12:30.

in World War II. -- and listing. Today, many, perhaps hundreds, I do

:12:31.:12:34.

not have an authoritative estimate, perhaps the Minister will give us

:12:35.:12:37.

that in a minute, hundreds perhaps of British citizens have travelled

:12:38.:12:41.

to northern Iraq and from there into Syria training with the Kurdish

:12:42.:12:48.

forces and the militias and ultimately, fighting on the against

:12:49.:12:58.

IS. In some cases the most fierce fighting at Kobane in this conflict.

:12:59.:13:05.

He's got a very, very interesting debate here at the adjournment. Many

:13:06.:13:11.

of the people who went to the middle East to fight on the Allied side,

:13:12.:13:18.

they said that we are as a Government supported them. They

:13:19.:13:21.

checked with police forces before and were allowed to go. But when

:13:22.:13:24.

they returned some were arrested and questioned. Isn't it wrong if you

:13:25.:13:32.

check if you can go and then when you return you are rested? Why

:13:33.:13:37.

should that be? I will return to that issue in a moment. The

:13:38.:13:40.

Government and country needs to have a clear and consistent policy. If we

:13:41.:13:45.

let individuals go, why should we arrest them for terrorism on their

:13:46.:13:51.

return. I'm grateful to the honourable gentleman for giving way

:13:52.:13:54.

and I applaud him for his debate. The opposite of that happened in my

:13:55.:13:58.

constituency when one of my constituents went to Iraq and fought

:13:59.:14:02.

with the Kurdish forces and when he returned to Heathrow, he expected to

:14:03.:14:09.

be stopped, but he was not. He then went back to jailing and self

:14:10.:14:12.

referred to the police. The first duty of estate is to protect its

:14:13.:14:15.

citizens, we should be checking as we go out and come back, otherwise

:14:16.:14:18.

they are a risk to national security. I thank the honourable

:14:19.:14:29.

member. Their stories suggest there is not a clear policy and they do

:14:30.:14:32.

not give us great confidence our border controls as different

:14:33.:14:37.

individuals have clearly been treated in different ways. A growing

:14:38.:14:40.

number of individuals have been profiled in the media, some have

:14:41.:14:44.

even been on more than one at all, if you like, and I've been in

:14:45.:14:48.

contact with 20 families, some of who I will refer to this evening,

:14:49.:14:54.

including one of my own constituents that is from Newark in

:14:55.:14:58.

Nottinghamshire. Two Britons and an Irish man were arrested this weekend

:14:59.:15:03.

crossing back from Syria into northern Iraq. So this remains a

:15:04.:15:08.

topical issue. And at least one British citizen, a former Marine,

:15:09.:15:14.

from Barnsley, has been killed in action. The Foreign Office says the

:15:15.:15:21.

jute difficulties and the lack of control and services in the area it

:15:22.:15:24.

is difficult to estimate whether or British citizens have been killed in

:15:25.:15:28.

action and what may have become of their bodies. Behind every one of

:15:29.:15:31.

these individuals is a family, and I have been able regular contact with

:15:32.:15:37.

my constituents, Aidan's mother, Angela and his grandmother, Pamela,

:15:38.:15:42.

Jerry is ten months abroad. I cannot understand -- understates their

:15:43.:15:45.

concern and anguish. The initial thought that they would turn on the

:15:46.:15:51.

television on one day see their son or grandson in an orange jacket on

:15:52.:15:56.

the television. In their case, there is also access to is that their son

:15:57.:16:00.

and grandson took this decision in a sound mind and good faith because he

:16:01.:16:04.

could not continue to watch the atrocities on television every night

:16:05.:16:08.

and turn a blind eye. I would not dare to generalise about the motives

:16:09.:16:11.

of all those who have gone out there, but those I have met and I

:16:12.:16:16.

have met several good and brave people who deserve respect and fair

:16:17.:16:21.

treatment under the law. I thank the Honourable member for giving way and

:16:22.:16:25.

allowing me to seek a bit of ad fight on something that is unusual

:16:26.:16:30.

case of a UK citizen injured fighting the forces of base-macro

:16:31.:16:36.

who I met in a refugee camp in France and he is the leading a

:16:37.:16:40.

pretty miserable existence because he refuses to abandon his wife and

:16:41.:16:44.

baby boy who are not entitled to seek asylum did have two that

:16:45.:16:50.

country in Kurdistan. He is not entitled to asylum in the UK or do

:16:51.:16:55.

they meet the minimum of these requirements, partly due to his

:16:56.:16:58.

injuries. I am seeking advice on how we can help this courageous UK

:16:59.:17:04.

citizen so we can get him and his family out of this miserable

:17:05.:17:07.

existence of the refugee Council of Europe and back here where he

:17:08.:17:11.

belongs. I am grateful to the honourable lady for raising that and

:17:12.:17:15.

perhaps the Minister will respond to her point later. I am pleased that

:17:16.:17:19.

other honourable member have come across individuals in the same

:17:20.:17:27.

circumstances I have. These individuals are entering an

:17:28.:17:29.

exceptionally dangerous situation which we must ponder in this House.

:17:30.:17:33.

Many are not at all prepared or suitable to go to these conflict

:17:34.:17:39.

zones. Some of the militias are wittingly or unwittingly becoming

:17:40.:17:42.

involved in divide opinion sharply. It is difficult for the layperson to

:17:43.:17:46.

navigate their record and legal factors in the United Kingdom. Some

:17:47.:17:51.

of these groups have been accused of war crimes and some of the

:17:52.:17:55.

association with terrorism. The diplomatic situation is complex and

:17:56.:17:59.

becoming increasingly hostile toward those and listing in Iraq and

:18:00.:18:04.

Turkey. And it is exceptionally difficult to understand what these

:18:05.:18:08.

citizens have actually done whilst in the field. Also, who they have

:18:09.:18:12.

associated with and to predict with confidence how they will behave on

:18:13.:18:16.

their bitter. I start from the premise that whilst we act knowledge

:18:17.:18:21.

the bravery and seek fair and appropriate treatment, we should be

:18:22.:18:25.

discouraging and inhibiting British citizens from going out in the first

:18:26.:18:31.

place to the extent that we can. Particularly, and I will return to

:18:32.:18:35.

this, if we are to arrest some of them when they return under the

:18:36.:18:39.

terrorism act, there are several militias operating in the region but

:18:40.:18:42.

the principal group I have come across and which is recruiting

:18:43.:18:52.

British citizens, the YPG have a Facebook account. They are easily

:18:53.:18:56.

contactable on the line. My constituents, with no prior

:18:57.:18:59.

knowledge of the reason was able to Google search, make contact,

:19:00.:19:03.

organises travel at low cost and with great ease. As far as I know,

:19:04.:19:08.

and perhaps the Minister could comment on this, the Home Office

:19:09.:19:11.

Internet providers have made no effort to close down these sites in

:19:12.:19:15.

a way they might do off-site encouraging recruitment of British

:19:16.:19:19.

citizens to fight on the other side. Many recruited on making rational

:19:20.:19:23.

choices and it is not my intention this evening to imply otherwise or

:19:24.:19:27.

discredit them. But there is clear evidence that some are far less well

:19:28.:19:32.

equipped to make those decisions. A 19-year-old man who previously

:19:33.:19:35.

worked as a florist in Manchester and had never left the UK in his

:19:36.:19:40.

life, a young man with Asperger's, a British citizen who had been

:19:41.:19:50.

diagnosed with PTSD and previously tried to take his life. Journalists

:19:51.:19:54.

have been contacted by former service men asking for ways to

:19:55.:19:58.

return to Iraq, support the Iraqi and Syrian people in the name of

:19:59.:20:02.

their fallen comrades who gave their lives in the Iraq and Afghan wars.

:20:03.:20:11.

I'm most grateful to the honourable gentleman and initiating this

:20:12.:20:14.

excellent debate. We must try and prevent people going in the first

:20:15.:20:18.

place, he is correct. What more does he think the Internet companies

:20:19.:20:22.

should do to bring down these sites as quick as possible? Right now, the

:20:23.:20:27.

referral process takes too long. I am grateful for that and I concur.

:20:28.:20:35.

It is important that not only those sites which are actively recruiting

:20:36.:20:39.

British citizens to fight for Daesh macro, but of those sites that may

:20:40.:20:45.

be preying on vulnerable citizens and nonetheless getting themselves

:20:46.:20:49.

into great danger must also be taken down by Facebook and others. Some of

:20:50.:20:55.

those individuals, particularly ex-service men and women would be

:20:56.:20:58.

advised not to go to the conflict zone. Few questions are asked by

:20:59.:21:04.

recruiters, no military experience is required, health is not checked

:21:05.:21:08.

and many arrive at airports completely in the dark about what

:21:09.:21:13.

they are to expect. They could be kidnapped, held to ransom, who

:21:14.:21:20.

knows. When he says health is never checked when going out, then the

:21:21.:21:25.

question arises about the trauma and their state of mind needs to be

:21:26.:21:29.

checked when they return for the addition of security, because they

:21:30.:21:32.

may inadvertently get drawn into other criminal activity. I am

:21:33.:21:36.

grateful for that point and the short answer appears to be very

:21:37.:21:40.

little support is offered to those returning individuals. Certainly, my

:21:41.:21:48.

only research suggests the vast majority are not even questioned by

:21:49.:21:52.

the police or Security Services on a return. Many have a little knowledge

:21:53.:21:56.

of the principal militias I've just described such as the YPG. They

:21:57.:22:05.

divide opinion and many if not most Britons who go out have no real

:22:06.:22:10.

knowledge of this group or the accusations against them. And the

:22:11.:22:15.

have accused YPG of war crimes. -- Amnesty International. Recent

:22:16.:22:27.

reports suggest that some foreign fighters have left the YPG in the

:22:28.:22:30.

field because of their views and joined others even more obscure such

:22:31.:22:34.

as the so-called self-sacrifice group which operates in another

:22:35.:22:42.

region. I thank you honourable gentleman for giving way. What

:22:43.:22:56.

position do you put ex-service men who wants to fight against the

:22:57.:22:57.

Kurds?

:22:58.:23:02.

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