David Davis speaks in the Queen’s Speech Debate in the House of Commons

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Mr David Davis (Haltemprice and Howden) (Con): Until the last line, I was rather enjoying that speech. It is a pleasure to follow the hon. Member for Rhondda (Chris Bryant). As always, he entertained me.

We last debated a Queen’s Speech rather more than a year ago. On that occasion, the House gained some amusement from my ability to summarise the matters in it with which I agreed in less than 60 seconds, but today I shall take a different approach.

The element of the speech of which I approved most was the one that was not in it. I refer to the fact that the Government have dumped the idea of a snoopers’ charter. We were told that the proposal had been vetoed by the Deputy Prime Minister, which amused me, as there were more Conservatives against it than there are Liberal Democrats in the House of Commons. Nevertheless, we must give credit where it is due.

I am pleased that the proposed legislation has been dumped, because it was offensive and intrusive and would have shamed, I should have thought, either a Liberal or a Conservative Government, let alone a Government consisting of both parties. I am also pleased that the Deputy Prime Minister is on our side on the matter. I only wish that he had been equally robust last year in respect of the secret courts Bill. I hope that the Government do not try to bring back the snoopers’ charter in one of the “other measures” to which the speech refers.

The purpose of a Queen’s Speech is to set out the Government’s strategy for the country, and to specify how the Government will deal with the great threats and maximise the benefits that the country can obtain in the coming year. It normally consists of three parts, dealing with foreign policy, economic policy and domestic, or home, policy. I shall comment briefly on each of those in order to give the House an idea of where I think the Government are going and, perhaps, an idea of where I think they ought to go.

In the context of current politics, the most obvious element of foreign policy—apart from the issue of Syria, which was dealt with by my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell)—is the matter of the European Union. Lord Lawson of Blaby’s comments in the last couple of days have added a whole new tenor to the Prime Minister’s proposed strategy relating to what we do in the EU. As everyone knows, what Lord Lawson said, in a nutshell, was that he would vote to withdraw. However, the keystone of his argument, with which I do not agree, was his statement that the negotiations that the Prime Minister could undertake would be inconsequential, and that we would achieve very little in terms of reform of our relationship with the European Union.

I do not think that that is necessarily so, although of course it has been true historically. Very few nations have been able to win their own way, as it were, in the European Union, and very few British Governments have been able to do so. If we look back on our history since we joined the EU, we may conclude that Margaret Thatcher’s recovery of the rebate constituted one dramatic victory for a nation state over the European elite, and that, interestingly, John Major’s exclusion of us from the euro constituted another. Those were both massive issues in their day and in their effect, but they were the exceptions, and, what is more, since those days the balance of power between the European Union and its member states has moved towards the EU rather than the nations.

In principle, therefore, one would assume that Lord Lawson was right, and that it would be impossible to achieve anything of any serious consequence. However, there are some exceptions. It is a pity that the right hon. Member for Leicester East (Keith Vaz)—the Chairman of the Home Affairs Committee—is no longer in the Chamber, because he would appreciate some of the points that I am making. The exceptions, essentially, are Denmark, Ireland and, together, Holland and France, all of which have changed the course of a negotiation materially: Denmark in respect of domestic issues, Ireland in respect of domestic and constitutional issues such as abortion rights as well as financial issues, and Holland and France by, famously, stopping the constitutional treaty in its tracks.

The common denominator in the effectiveness of those countries was their holding of prior referendums. They all held referendums before the negotiation was over, which produced a formidable increase in their Governments’ negotiating power. The European Union officials—with some reason, given their ideology—take the view that Governments are temporary, whereas Europe, or the European project, is permanent, but they cannot say that in response to the statement of a people, because peoples are permanent; and they are afraid of referendums.

What is problematic about the Government’s present strategy is that they are using referendums in the same way as Harold Wilson—as a solution to a domestic problem, rather than as a mechanism to solve the European problem. That is why some of us argue in favour of the holding of a mandate referendum—a referendum on the negotiating tactics that we are taking to the European Union—before we do so. That, we believe, would enable us to get probably 70% of the country to support the new model of relationship that we want, and the Prime Minister would then have a chance of achieving some sort of victory.

What will happen otherwise, if Lawson is right, is that there will indeed be an inconsequential outcome, and the Prime Minister will find himself in the position of arguing in favour of staying in the European Union, because Prime Ministers and Foreign Secretaries never admit to error or failure in negotiations. I will give way to any Member who can tell me of an occasion when any of them has done so. The Prime Minister will have to come back and say, “This”—this limp rag of an outcome—“is a terrific success, and I want you to stay in the Union.” Of course, he will be defeated, and the consequences for Britain in terms of subsequent negotiations will not be clever.

I ask the House to think very carefully about that. It seems to me that if we are to go down this route, a referendum is an inevitability, but if we are to go down this route, we ought to give the British people the right to choose between two good outcomes, rather than one good outcome and one bad outcome. The way in which to do that is to hold two referendums, one—soon—on the negotiating strategy that we are seeking to present, and the other, a decision referendum, at the end of the day.

The second strand with which I wish to deal is the economic strategy. I have some sympathy with those who argue that the Government’s current strategy is necessary but not sufficient. Of course we must gain control of the deficit and the debt levels—that is a given—but, beyond that, we must ensure that we have a growth strategy. I do not believe that the answer is to adopt the Keynesian approach that Labour Front Benchers want to pursue, but we nevertheless need a growth strategy. A good many Government Members would argue that to get that we need less regulation and lower taxes, what could be described as a supply-side growth strategy.

In that context, an aspect of the Queen’s Speech of which I disapprove is the Government’s approach to energy costs. Their current approach is leading to an increase in the cost of living for ordinary families, and to the loss of jobs as industries move from here not just to China, Brazil and India but to Germany and France, because the current carbon pricing arrangements mean that we are disadvantaged in relation to our European competitors. Whatever view we hold on green policy, it cannot be an advantage to export jobs and export the emissions that go with them. I am concerned about that.

I want to focus on one element of the economic arm of the Queen’s Speech: the welfare reforms. Broadly speaking, the welfare reforms are the unsung success of this Government. This is the most difficult part of their policy to carry through. It is the most contentious and the hardest part to get right, but it is the step that is leading to employment increasing rather than reducing. It is getting more people to go out and look for a job now than have historically. It is not easy. All of us have in our constituencies people who have got on the wrong side of the assessment process, but it is a necessary process.

Mark Tami: What about those people who come to see us in our surgeries who have been told they are fit to work, but who, in the real world and the very difficult economic climate in which we find ourselves, are not going to get work? Just saying they are fit for work, under whatever system, does not mean they are going to go out and get a job. Does the right hon. Gentleman accept that an acknowledgement of that is what is lacking?

Mr Davis: There is an element of that, and that is what I was alluding to just now. There is no doubt that the system makes some mistakes, but I have the advantage of having been an MP for a long time, and I can remember when we changed the disability rules the other way, and we had a 400% increase in people claiming disability benefits of one sort or another. It was the right direction to go in, but it went vastly too far. The problem is that we now have a situation in which people are basically taken completely off the job market. To be frank, it suited past Governments of both political persuasions to have those people out of the job market, because the figures looked better, but that does not mean we do not now have to put this right.

My argument here—it is the argument I will make throughout what I have to say in the next five or so minutes—is that the difficult decisions we face now have to be faced up to, but we must always, time and again, come back and apply a fairness test. The hon. Gentleman would probably agree with me about that, although maybe not about where that test would fall.

I particularly approve of the proposed changes to pensions. Last week I was worried that the Government effectively were proposing to ignore the benefit that arises from stay-at-home mothers, but, in fact, the reverse is true. The Queen’s Speech states that the Government will

“create a simpler state pension system that encourages saving and provides more help to those who have spent years caring for children.”

If there is one thing in the Government’s economic strategy that I disapprove of it is the presumption that the only useful mother is one that goes out to work. Raising children—particularly raising three or four children—is a difficult task in its own right and a very important social task, and I am surprised that a Conservative Government, of all Governments, do not recognise that more and do more about it. This at least appears to be a move in the right direction, and if it lives up to the advertising in the Queen’s Speech, I will support it enthusiastically.

Indeed, I would go further and say that the Conservative party had a manifesto commitment to have transferable tax allowances for married couples as well, and I see no reason why we should not hold to our manifesto commitment. I understand that is budgeted for in the Treasury anyway, so why do we not do it?

The one element of the Leader of the Opposition’s speech that I sort of half-agreed with was that we have not been fast or robust enough in our approach to banking reform. There has been a lot of talk recently about populist measures—about “Thatcherite giveaways” of the nationally held shares in the banks. That is neither here nor there to me. What matters is the structure of the banks. We should be breaking up our banks. At the level at which economies of scale run out in commercial banking, we could have 30 high street banks in the UK. Some 30 or 40 years ago, that is exactly what we did have, and I have to say levels of service in banking have gone down since then, not up.

We have ignored competition law. We have ignored the virtues of competition and the impact on stability of having banks that are too big. We need measures on that. They are not in today’s Queen’s Speech because the Banking Commission is yet to report. As soon as it does report, we must have urgent action. This is not something we can put off for five years. We should do it now.

Neil Parish: I agree with what my right hon. Friend is saying about our banking system. I am finding that many businesses in my constituency are still being denied credit, and especially credit at affordable rates. Is he finding the same thing happening in his constituency? If we had greater competition between more banks, we could get the rates for lending to businesses down.

Mr Davis: My hon. Friend is absolutely right. A large part of the reason for that is the state of the UK banks’ balance sheets. They are getting money effectively for free, but they have got such bad, or untrustworthy, loans on their balance sheets that they dare not lend money, and the Government are putting constraints on them to limit their lending, too. The outcome is that our small businesses in particular are having a terrible time. Patches are being put over this problem, such as the Chancellor’s mortgage support scheme in the Budget, but we need to sort out the problem at source.

Rory Stewart (Penrith and The Border) (Con): Does my right hon. Friend agree that banking reform is necessary not just because of its economic benefits or the element of fairness, but because this is the ideal time to do it in terms of popular legitimacy? Breaking up the banks could not be done at a better time.

Mr Davis: My hon. Friend is entirely right. He is a better historian than I am, and he could probably refer back to the United States of America in about 1900 or just before, when politicians used the same popular view of big business to create a model of capitalism in the United States that for the next century beat the world. We could do the same, and we should do the same, but I am afraid that at the moment I see no enthusiasm for that. I will certainly pursue that in the next year, however.

Finally, on home affairs, immigration has come to the fore, particularly because of the UK Independence party’s activities in the past few weeks. I dealt with the issue for a long time when I was shadow Home Secretary. The difficulty is to come up with a set of measures that is both firm and will deal with the issue without being uncivilised—without being barbarous, or perceived as barbarous, in approach. That applies to both the immigration problems the Government are attempting to solve in the Queen’s Speech: the ability to deport immigrants who come here and become criminals or terrorists—such as Abu Qatada—and mass migration.

On the issue of criminals, I am the last person to give way to anybody on human rights in this House of Commons. I suspect most people would accept that, yet I take the view that the misuse of human rights legislation by the likes of Abu Qatada brings the whole question of rights under the law into disrepute.

It is important to resolve this issue in a way that is both fair and effective. The European Court of Human Rights and the British courts are acting against their own long-term interests by being pig-headed in their approach. Qatada serves as a good example. If Qatada faced torture or death abroad, I would lie down in the street in front of the black Maria taking him away, but the truth is that we are talking here about making judgments about other countries’ justice systems, and we simply cannot do that. If we do that, we will start to challenge the whole question of whether we should send someone back to America. Let us consider the treatment of Christopher Tappin. He was extradited under the extradition rules. That was not justice; it was a parody of justice. Then there is the treatment of some of the people who have been dealt with in Greece, let alone Romania and Bulgaria, which, frankly, do not have working justice systems.

We therefore have to think very hard about where we will draw the line, and I draw the line on the treatment of the individual we are sending, not on the justice system of the country we are sending them to. I do so within reason, of course; if there were a dictatorial fiat, that would be another matter, but we are not talking about that here, because this argument is about what sort of evidence might be used.

We have had lots of talk from the Government, including the Home Secretary, and lots of posturing, but the issue could have been dealt with already. I say that because about two months ago my hon. Friend the Member for Esher and Walton (Mr Raab) tabled an amendment to primary legislation to say, “We will take into account articles 2 and 3, but not article 8 and the others, when making these decisions.” Why would this work? It would work because the Human Rights Act, of which I am no great fan, can be trumped, not by regulation or ministerial decision but by primary legislation passed by this House. We could have fixed this problem, but the Government talked the measure out—it was the day of the Leveson debate—and did not attempt to create time for it. They should have passed it. I do not know what we will get now, but it will be different. Importantly, the legislation must great clarity, because the courts will interpret any vagueness to the advantage of the person who might be deported. That is inevitable; it is what has happened over the past few years. We can fix this problem, but we need to face up to the need for clarity and for a decision on what we are really saying about the European convention on human rights.

The other element of the immigration debate is mass migration. I agree with the Government that we must limit the ability of people who have made no contribution, perhaps having come here temporarily, to claim welfare benefits and social housing in the UK. I am not at all sure, however, that I agree with the Government’s idea of withholding health care from people coming to this country, and I return to my point about acting firmly without being uncivilised—without being barbarous. I find it difficult to imagine doctors in an accident and emergency department in a London hospital finding someone with a foreign accent on a trolley in front of them and asking, “Where are you from? If you are Hungarian, you can be treated; if you are Bulgarian, you can’t.” I do not see how that is going to work. Most of us get reciprocal health care if we go to European countries on holiday, to retire or to live, so I do not see how we are going to amend our provision. I am not sure, in my heart of hearts, that I want to say to someone who has been run over in the street, “You can’t have health care, because you’re a foreigner.”

Kate Hoey rose—

Chris Bryant rose—

Mr Davis: I will give way to the hon. Lady first.

Kate Hoey: I understand what the right hon. Gentleman says about people falling over in the street, but people come from Heathrow airport to the A and E department at my local hospital, St Thomas’s, with something that they knew perfectly well they had before they came. It is not as simple as saying, “We must look after the sick”; clearly there are limits. This is a form of health service tourism.

Mr Davis: I shall come back to the hon. Lady’s point, after giving way to the hon. Gentleman.

Chris Bryant: I always presumed that life-threatening conditions were not to be included in this—otherwise, as the right hon. Gentleman rightly says, we would be entering into a barbarous situation. The other issue is notifiable diseases, because it is in all of our interests for people in this country—of whatever nationality— who have tuberculosis or another notifiable disease to be treated. I hope he agrees on that; we do not want to cut off our nose to spite our face.

Mr Davis: Let me deal with those very good points in order. First, health tourism is not new; people may now be coming from Romania, but we have had people coming from the middle eastern states for a long time. I used to live near King’s College hospital, which has a great liver treatment centre, and a significant proportion of its patients at one time were from Arab countries. [Interruption.] They were not paying, that is the point. Of course we have to do something about health tourism, but we also have to be wary of unintended consequences. I mentioned A and E because in London, as the hon. Lady knows, and in some other parts of the country it is acting as a secondary GP service. In a huge, three-hour queue of people coming to A and E to get secondary GP services, I do not know how we distinguish between those born in Britain and those born in Hungary or Romania. There is a great risk of getting this wrong, and the medical profession would not go along with it and be the arbiters. As the hon. Gentleman rightly said, communicable diseases are a problem, irrespective of whether someone is a British citizen or born abroad. They have to be treated differently and separately, but that is not a question of payment or of health tourism; it is a question of getting it right.

This morning, the Health Secretary talked on the radio about the pull factor, characterising medical care as such. That is the case for a health tourist, and we can do something about it, but we could not do something about the half a million Polish immigrants that there were at one point. The pull factor for most of the Romanians and Bulgarians will not be health care, welfare or housing; it will be simple economics, because the average income in Romania and Bulgaria is approximately one third of our minimum wage. Most Romanians and Bulgarian could treble their standard of living simply by coming to the UK and doing almost any job.

We have to face up to that fact, which also faces Germany and all the European countries closer by. One would have thought that if we really did have a working European Union, we would by now have been able to say to each other, “When we devised the rules about the freedom of movement of people, they were not devised for an organisation of states that had a tenfold difference in average incomes.” Let me say that I am a free marketeer, so I think those things are terrific and I am a believer in the free movement of people, but we have to think of a better way of dealing with this matter, because these people will not be the last ones who come along—and they are coming in January next year.

Chris Bryant: I just want to correct the right hon. Gentleman on one other thing about the reciprocal rights between different countries. About 1 million British people live in Spain and another million live in France, but if they have not reached the retirement age, they are not entitled to the full use of the Spanish or French national health services and many of them end up getting trapped. So the law of unintended consequences might also apply to a lot of British people who are no longer living here.

Mr Davis: The hon. Gentleman is almost exactly right, but there are sets of different regimes, with some applying to retired people, some to working people and some to people who are neither working nor retired—I checked these things this morning, just to be sure. There are three different regimes and they alter by country, too—surprisingly so, in the European Union. The whole European economic area, including Switzerland and Norway, has a regime under which people in almost every category get some form of health care.

Chris Bryant: For two months.

Mr Davis: For two months. Health tourists coming to this country to get a single operation or a single course may be wanting only the two months, so this is another area where we have carefully to think through the obverse effect of these actions. I know the pressures on politicians are high following the UKIP flurry in the past week or two, but we have to think carefully.

Jim Shannon rose—

Mr Davis: I am trying to sum up, but I will give way.

Jim Shannon: I understand that the statistics show that those coming from Romania, Bulgaria, Hungary and other eastern European countries bypass Italy and Germany to come to Great Britain because of the better NHS treatment and the better benefits system, so does the right hon. Gentleman feel that that has to be addressed?

Mr Davis: I am afraid that that is not true. I do not want to end up giving a lecture on this, but let me say that the previous Government made a simple mistake in allowing access before the transitional periods were up for those from the entire A8 group of accession countries—Poland, Hungary, the Czech Republic and so on. Therefore a large number of people who could not get into Germany and France at that time came to this country, because they were allowed legitimately to do so; ours was the only big country to do that. As a result, we end up with a Polish community—with Polish shops, Polish newspapers and so on—and so where do Poles go when everything is opened up? They come to where there is an indigenous Polish community, and that is perfectly reasonable. All of this is rational behaviour on the part of people who want to work, make a living and get on in life, and I cannot disapprove of them doing that. So one mistake was made then and that is what it led to. We are not going to be in the same position in respect of Romania and Bulgaria, so it is difficult to predict the numbers. I was the shadow Home Secretary who challenged the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) when, as Home Secretary, he said that 13,000 eastern Europeans would be the total number coming to this country. He eventually got so nervous about this that he started saying, “I am the Home Secretary, but the Home Office is saying this.” He realised that his numbers were wrong and the real number turned out to be millions.

Mark Tami: By their very nature, these people, be they from Poland or wherever, tend to be young and healthy, and the health service is probably one of the last things they think about—it is the job they are looking for.

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. There are 11 speakers to come, and there are no time limits, but to ensure that everybody gets in, may I ask Members to exercise some self-restraint?

Mr Davis: That was the last intervention I was going to take, Mr Deputy Speaker.

The simple truth is that we must be wary of doing something we do not intend to do, under political pressure. More generally, in our approach to difficult economic decisions in the next year or two, I hope that this Government, of all Governments, will work hard to balance the fairness against the difficult decisions. We are going to make hard decisions, which will lead to huge opprobrium from Labour Members for all sorts of reasons. That does not bother me, but what does bother me is that we get the balance of fairness right.