Westminster Hall

Tuesday 4th December 2018 Westminster Hall

Tuesday 4 December 2018

[Mr Philip Hollobone in the Chair]

ATM Closures

Tuesday 4th December 2018 Westminster Hall

09:30

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

I beg to move,

That this House has considered the effect of ATM closures on towns, high streets and rural communities.

It is a pleasure to see you in the Chair, Mr Hollobone. I and other hon. Members on both sides of the House have been raising the closure of ATMs and its impact on our towns, high streets and rural communities for some time. The issue is more pressing than ever. In November 2017, LINK, the ATM membership body that sets the funding for free-to-use ATMs, began consulting on proposed cuts to the funding mechanism known as the interchange rate fee—a fee paid to the ATM operator, by the bank or company that issues a consumer’s bank card, when cash is withdrawn. Prior to LINK’s reductions, that fee was 25p. In its consultation, LINK proposed reducing the fee to 20p through four rounds of cuts beginning on 1 July this year and ending in January 2021, although the third cut was cancelled and the fourth has been put under review.

From the beginning, LINK accepted that those changes would lead to ATM closures. In its analysis and consultation documents, it stated that it expected a decline of between 1% and 11% in free-to-use ATMs, but that it was confident that there would be a reduction only in areas with a high concentration of free-to-use ATMs, such as cities. However, the number of closures has been far higher —approximately 250 per month—since LINK announced its consultation. Operators such as NoteMachine and Cardtronics say they expect to lose thousands of machines each, and new installations have been put on hold.

[Yvonne Fovargue (Makerfield) (Lab)]

Does my hon. Friend agree that one of the major problems is that the machine operators—Cardtronics and so on—do not have to inform the LINK network before closing a machine, and that the cost of replacing a machine is prohibitive?

[Ged Killen]

My hon. Friend anticipates my next point. If an ATM is removed, it costs between £7,000 and £10,000 to reinstall. That high capital investment means that, once closed, an ATM is difficult to replace, due to concerns that the investment may not pay off.

LINK sought to reassure the Payment Systems Regulator that the spread of free-to-use ATMs would not be damaged, because it would use its financial inclusion programme to protect ATMs in areas where there was not another free-to-use machine within 1 km. However, although it is well-intentioned and well funded, that programme relies on communities or operators reporting vulnerable ATMs to LINK and nominating them for extra funding, which, as my hon. Friend alluded to, they do not have to do.

The problem is that the existence of the financial inclusion programme is not well communicated, and there is concern that take-up has been poor. Anecdotal evidence suggests that the process for accessing the programme is not well known or straightforward, meaning that communities, operators and councils are often delayed in applying for funding.

I spoke recently to Tesco about its network of more than 4,000 ATMs. As I am sure Members know, many of those ATMs are in groups of two or three outside stores. Tesco told me that in some cases, those two ATMs are the last two in the town, but neither falls under LINK’s financial inclusion programme because both are right beside another free-to-use ATM.

As a consequence of the poor deployment of the financial inclusion programme, more than 100 ATMs with “protected” status have closed. We see examples of the programme failing in Scotland. Just outside Edinburgh, in the EH18 postcode, the nearest free-to-use machine is now 1.3 km away. In the PH24 postcode in the Cairngorms, the nearest machine is 6.6 km away. In TD10 in the Scottish Borders, some consumers must travel 10.9 km to withdraw their cash without charge.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I am extremely glad that the hon. Gentleman is making an issue of the distance between ATMs. My constituency is vast and remote, and we have a thin scattering of ATMs. There is a threat of closure. I have a map here. I assure the hon. Gentleman that the distance between some of those ATMs is more than 10 km. If any one of them closed, that would be severely detrimental to my constituency.

[Ged Killen]

I thank the hon. Gentleman for making that point. He came along to an event I held in conjunction with Which? where that information was available to Members from across the House. Many Members were surprised to learn just how far apart ATMs are in their constituencies, and how vulnerable each of those areas would be if something happened to one of those machines.

The 1 km rule just is not working. Even if it were, things can go wrong quickly when one of the last remaining machines develops a fault or runs out of cash. I stopped off in Ballantrae in South Ayrshire over the summer recess, which seems a long time ago now. When I went to use the ATM, I discovered it was out of service. There is a post office counter in the local shop—we would need an entirely separate debate to talk about the pressure post offices are under to try to meet the gap in services created by the banks—but when I went into the shop to inquire, I discovered that the next-nearest ATM is more than 20 km away, or almost 13 miles in old money.

The other issue is that it is difficult to take account of local circumstances in applying the 1 km rule. In Cambuslang in my constituency, both free-to-use ATMs at either end of the main street are—excluding the other—within 1 km of another ATM, but those alternative ATMs would be not just inconvenient but very difficult to get to for anyone who experiences mobility issues. The closure of either ATM on the main street would have a massive impact on the small businesses in that area, which are already really feeling the pressure.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing this timely debate. Does he agree that in coastal towns—particularly in my constituency but in others, too—we sometimes see the dilution of ATMs? A filling station might open with an accompanying shop and ATM, but the ATMs in the town centre might close, thereby exacerbating the problems we have with reinvigorating our town centres.

[Ged Killen]

The hon. Gentleman is absolutely right. He makes an excellent point about the existing pressure on our high streets. Removing ATMs and other services does not help that pressure one bit.

LINK has now been given a specific direction by the PSR to review its financial inclusion programme, due to its failure to protect the spread of free-to-use ATMs. However, I have little confidence in the regulation of the sector. LINK’s changes to ATM funding were the PSR’s first major regulatory hurdle. In my view and that of many stakeholders, it fell at that hurdle. Common themes related to the reporting of issues and access to the financial inclusion programme have been reported by those involved in the industry pretty much since day one. I sat across from the PSR and explained the concerns I had heard about the closure of free-to-use ATMs and about their operators, and from the many people who are against the cut to LINK’s interchange fee, and I was met with silence. On every occasion when concerns were raised, the PSR failed to act. Only latterly has it taken action.

[Ruth George (High Peak) (Lab)]

I thank my hon. Friend for bringing forward this important debate. My very rural constituency is similarly affected. When I met the PSR, I found its attitude was, “Wait and see whether there are any problems, and then we might think about acting.” Does he agree that that is not the correct attitude for a regulator to take when it has such a weight of evidence before it that there will be problems?

[Ged Killen]

My hon. Friend is absolutely right. When I met the PSR, it seemed wholly satisfied with listening to what LINK, rather than everyone else involved in the industry, had to say about the issue. That was surprising and disappointing.

The closure of free-to-use ATMs highlights the significant problem we have with the way access to cash is managed in the UK. There seems to be no effective oversight of the issue, and responsibility sits across numerous Departments, regulators and private companies. We need a regulator to have the powers to take a rounded view and implement effective measures that will ensure access to cash is protected. It seems likely that the PSR either does not have the power it needs or has not utilised fully and effectively the abilities it has. I should be grateful if the Minister would comment on that.

We are in a transition towards a cashless society, but we are not there yet. We need to be careful about how the transition is managed. Most importantly, we have to think about the impact on people who still rely on cash. Access to cash remains an important part of many of our constituents’ lives. Research from Which? has highlighted the fact that four in five people said that access to the free-to-use network was important in their daily lives and in paying for goods and services. Removing free access to cash would leave one in 10 people struggling to make payments, and would shut many consumers out of local shops and services.

We also need to think about what happens when the technology fails or in the case of hacking. This year the Visa payment system crashed and there were major online banking issues for TSB customers, many of whom of course did not have a local branch to visit as an alternative. The experience of other countries further along the journey towards a cash-free society, such as Sweden, where there has been a huge rise in the number of places that simply will not accept cash, is that there are now serious concerns about the lack of cash in the economy, so that the Government are looking at ways of addressing that retrospectively.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

Does my hon. Friend agree that another challenge is the fact that in many communities there simply is not access to digital platforms—so that 25% of my constituents have not accessed the internet in the past six months? Moving to contactless payments or online banking is not an option available to them.

[Ged Killen]

My hon. Friend is right. My constituency is neither rural nor a city; there are new-build towns that are in between, with surprisingly poor access to broadband in some places. We are asking people to use those services instead of visiting a local branch. That is not always practical—not least for those who are perhaps not as tech-savvy as others.

It is not just a matter of ATMs. The whole infrastructure that supports access to cash will be at risk if we move towards a cashless society too quickly. Without intervention from the Government it will be the elderly, the least well-off, rural communities, struggling high streets and small businesses that will pay the price. We see that happening in other countries that have made the transition too quickly. That is the driving force behind my private Member’s Bill to ban ATM charges and protect access to cash, the Banking (Cash Machine Charges and Financial Inclusion) Bill. In principle I do not believe people should have to pay for access to their own money. Long gone are the days when people’s employers handed them a pay packet at the end of the week, and the banks would not much like it if we all decided to keep our cash under the mattress. We have little choice but to keep our money in banks, and that money generates profit for banks, so we should not be paying to get access to it.

As LINK chips away at the funding formula for ATMs and more and more people use contactless and digital payment methods, there will be far fewer ATMs and more of the ones that are left will charge us for the privilege of withdrawing our cash. I do not want to stand in the way of progress towards a cash-free society, but I do want to shift the burden of that transition away from consumers and on to banks, who after all are the long-term beneficiaries of a cash-free society. We will never reap the rewards of those savings when they come, so let us have them now by requiring the banks to continue providing free access to cash where there is still a demand for it.

I was glad that the Labour party adopted the aims of my private Member’s Bill. For me, and for the Labour Front Bench, the rejuvenation of the high street is not just about helping small businesses; it is a social issue as well. I have noted that there is a growing cross-party consensus on the issue. The hon. Member for Bexhill and Battle (Huw Merriman)—he is not here for the debate, but I have notified him that I shall be mentioning him—has a private Member’s Bill on ATMs, the Minimum Service Obligation (High Street Cashpoints) Bill. I agree with the hon. Member for Ochil and South Perthshire (Luke Graham), who is here today and who, with his private Member’s Bill, the Banking and Post Office Services (Rural Areas and Small Communities) Bill, has highlighted the responsibilities that banks have to the consumers who bailed them out during the financial crisis. In addition to what is being done by Members of this House, a range of organisations have raised the same concerns. They include Which?, the Federation of Small Businesses and the Association of Convenience Stores.

I recently met the chair of the independent access to cash review, and I know that the review is considering in detail some of the issues I have touched on in the debate, so I look forward to seeing what comes out of that. However, in the context of bank branch closures up and down the country, and with high streets and rural communities facing ever greater challenges, the Government must take a serious look at the issue now. I hope that the Minister will reflect on what I have said.

[Mr Philip Hollobone (in the Chair)]

The debate can last until 11 o’clock, and five Members want to catch my eye. We have about 40 minutes of Back-Bench time, so if Members speak for more than eight minutes they will deprive someone else; please be courteous to each other.

09:46

[Kirstene Hair (Angus) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Rutherglen and Hamilton West (Ged Killen) for bringing this important debate to the Chamber. I was delighted to support his recent ten-minute rule Bill on protecting access to cash and reducing charges, the Banking (Cash Machine Charges and Financial Inclusion) Bill.

According to analysis by Payments UK and the Bank of England, those who rely almost entirely on cash are much more likely to be in rural areas such as my constituency. Yet they are experiencing the greatest reduction in the number of machines since the funding reduction by LINK in 2018. The closure of ATMs on the high street is of particular concern to older residents, who are more likely to rely on such services. The ATM network in rural areas is therefore incredibly important in supporting rural economies. My constituency will soon lose the Bank of Scotland branch in Kirriemuir, and earlier this year we lost our Royal Bank of Scotland branch in Montrose. When we lose banks, we also lose the ATMs.

Such closures have a huge impact on rural high streets. High streets in Angus are struggling anyway, and the closures put further pressure on them, continuing to challenge their trading environment. The removal of ATMs only creates a further barrier and a disincentive to shoppers. That is why the UK Government and LINK should work together to make shopping on high streets as simple and straightforward as possible. Everything should be done to prevent rural communities from feeling the brunt of the fee reductions and the potential closures that might ensue.

Like many hon. Members, last week I visited many small businesses in my constituency. Among the matters that came up was the ATM issue, and the negative impact that card transactions can have on small independent businesses. Many ask that people spend a certain amount before they can make a card transaction, but if one in 10 people have to walk more than 30 minutes to find the closest ATM, they may just walk away from the transaction. There are differences between contactless payments and card payments, and those things all put more pressure on small independent retailers. That is why ATMs must be in place to support them.

The financial inclusion programme, which aims to identify vulnerable ATMs and increase the interchange payment by 30p, in order to keep rural ATMs financially viable and protect rural communities, is welcome, but there is a question as to how effective it has been. Despite the programme, research by Which? has shown that closure rates of free-to-use ATMs have still been at their highest in rural constituencies such as mine. The provision that people should not have to travel more than 1 km does not go far enough. In fact, it is not in place in every area in Angus, and today we have heard other Members say the same. Residents in Inverkeilor, a village in my constituency with a population of 1,000, must travel six miles to Friockheim to use a free ATM. That is well outwith the 1 km provision that should be in place.

[Jamie Stone]

What if someone living in the hon. Lady’s constituency, or in my Caithness, Sutherland and Easter Ross constituency, does not have a car?

[Kirstene Hair]

The hon. Gentleman is right. With declining public transport provision in rural communities, if someone does not have the provision of a car they are left completely stranded, with no access to cash.

[Ruth Smeeth]

Does the hon. Lady agree that one of the challenges is that LINK, when it makes these decisions, looks at a map and has no understanding of local territory? It has no idea how steep some of the hills are. Access can be almost impossible for someone trying to walk 1 km, never mind 10 km.

[Kirstene Hair]

I agree. That is why I want to talk about how important it is to do impact assessments before we lose the ATMs, so that those issues are closely considered.

The Association of Convenience Stores has criticised LINK’S FIP, saying that, “it is not clear whether LINK has the resources to implement these commitments across the network.” For example, LINK previously identified 2,651 deprived areas in the UK that are eligible for free-to-use ATM subsidy, but 10 years after the introduction of the FIP, 824 of those did not have free access to cash within a 1 km radius.

We need to watch what commitments LINK makes to ensure that ATM networks in rural areas are properly protected as rates are reduced further in the years ahead. The question is whether the LINK process of identifying vulnerable ATMs is working or whether we need to have further impact assessments. As the hon. Member for High Peak (Ruth George) said, we need to ensure that this is not a “wait and see” game. We must work ahead of time to ensure that people are not negatively affected when they lose their ATMs. That is a huge issue across my Angus constituency, and for hon. Members across the Chamber.

[Luke Graham (Ochil and South Perthshire) (Con)]

I know that my hon. Friend is drawing her speech to a close, but she is talking about impact statements, which are especially important. It is something I raised in my ten-minute rule Bill. Does she agree that we need to have different impact analysis for rural and urban areas? Some of the evidence she cited about constituents being disadvantaged is the same for Ochil and South Perthshire. I have a constituent in her 80s, who lives in St Fillans, who was told to “nip to Perth” to do her banking. That is a journey of 50-plus miles that would take more than two hours on the bus, especially in bad weather. Members who know the geography and weather in my part of the world will appreciate that that is no easy feat for a woman in her 80s who walks with two sticks.

[Kirstene Hair]

I thank my hon. Friend for his intervention. I know his constituency very well, both the geography and the weather, so I know it is important, as I said at the beginning of my speech, that the most vulnerable in our society have that provision and that it is easy to access. I look forward to hearing the Minister’s response.

09:52

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on bringing forward an issue that is important for every one of us here. It is a particularly important issue for me, as I have fought for ATM retention in many places across my constituency, sometimes successfully and sometimes not, mostly due to bank closures. I will use the time available today to do that.

For those who hail from a rural constituency, the availability of free-to-use ATMs is essential. The hon. Gentleman and the hon. Member for Angus (Kirstene Hair) have both outlined the importance of that. In recent times, bank closures have severely affected rural communities, particularly those in my constituency, where I think we have had seven bank closures. I live on the Ards peninsula, and the effect of the closures on the rural community is intense. When the banks close, often no ATMs are retained because the building is sold and there is nowhere to put it, which is very frustrating. My hon. Friend the Member for East Londonderry (Mr Campbell) made a salient point: whenever the banks move out of the villages and toward the town centres, the business moves with them, meaning that villages and small places come under intense pressure.

[Yvonne Fovargue]

Does the hon. Gentleman agree that it is not just bank closures but post office closures that have that effect? Although the closure programme for small post offices has been completed, two post offices in my constituency have closed because the sub-postmasters have resigned and they cannot get anyone else to do it. The Payment Systems Regulator, which told me that cash is available at post offices, has not taken that into account.

[Jim Shannon]

The hon. Lady is absolutely right. We have not had so many post office closures in my constituency—we have been able to defray those by moving post offices into shops and so on—but I know that the effect on rural communities is immense. On the Ards peninsula we recently lost the Ulster Bank branch in Kircubbin, with a mobile bank in place at present.

The British Bankers Association investigated lending data and found that bank closures dampen lending growth to small and medium-sized enterprises by a massive 63%. I am sure that other hon. Members can reflect that. The figure rose to 104% in areas that had lost their last bank. We must consider the impact on SMEs, because it is a significant and damaging drop in funding for areas already under commercial and economic pressure.

[David Simpson (Upper Bann) (DUP)]

Does my hon. Friend agree that the fact that between 150 and 250 ATMs are closing per month in Northern Ireland, as the Belfast Telegraph recently reported, is causing major difficulties, especially for pensioners and those not able to get out?

[Jim Shannon]

My hon. Friend makes a salient evidential point, which contributes greatly to the debate. The removal of any ATM services will have a further, extreme impact on rural communities and convenience shops. It must be remembered that currently there remain more cash transactions than any other method. We need to ensure that cash is available to people as they need it and that we do not return to people hiding money in the house because they cannot easily access their cash.

I live in a community where it is not unusual for people to keep their money at home. Those of an elderly disposition more often than not even keep their savings there. A few years ago my wife’s aunt was burgled and lost her life savings as a result of two people taking advantage of a vulnerable lady with poor eyesight. More than one constituent has told me that since the latest banking crash they lift their money after pay day and keep it at home. That is not safe and it is not what we advocate. It must also be remembered that many ATMs provide other services such as pin number changes and balance inquiries. For those who do not have reliable broadband at home, these machines are essential for the correct control of finances. These problems make the ATM debate so important.

Polling research by Which? found that cash remains popular and important. The research showed that almost three quarters of people, or 73%, use cash at least two or three times a week, including 60% of 18 to 24-year-olds, which is quite interesting. Only 5% of people use cash once every three months or less, and the majority of consumers still rely on cash in some circumstances. Which? magazine research further found that 57% of consumers say that they have experienced a situation in the last three months in which they could only pay by cash. Two thirds, or 67%, of people say that cash is important for making small purchases, and six in 10 say that it is important for paying for occasional professional services, such as babysitting and cleaning.

[Mr Gregory Campbell]

Does my hon. Friend agree that the other statistic we should bear in mind is that the number of contactless payments is going up exponentially every single month? The greater likelihood is that there will be many millions more of that type of payment, leading to greater numbers of breakdowns of contactless payments, which will leave people without cash or the ability to pay otherwise?

[Jim Shannon]

My hon. Friend illustrates clearly where the focus is moving as more people use contactless payment methods. Cash is still a widely used payment method. It is relied upon not just by consumers, but by those receiving payments, with 52% saying it is an important way of being paid. It is imperative that rural communities have access to these services, which I believe we must secure. That is why I support Which? magazine’s suggestion to deal with the ATM concern, which has been taken up by the magazine and other consumer bodies. It responded to the LINK review by pointing out that ATMs are only one part of the cash nexus that needs to be protected. It believes that without a wider strategy for cash, the closure of bank branches, post offices—the hon. Member for Makerfield (Yvonne Fovargue) referred to that—and ATMs could mean that the UK reaches a point where maintaining the current system of free-to-access cash is no longer viable. We have to look at the end result of what we are heading towards.

There are also potential risks to all UK consumers and businesses if we no longer have a sustainable cash network. Recent IT failures have underlined for many people who do all their transactions by card and are almost in a cash-free environment that, whenever their card or bank fails, they are in big trouble. For example, IT failures at RBS highlighted that the distribution of cash can be critical to national infrastructure and is often the only viable alternative if a consumer or business cannot make an electronic payment.

That is why Which? has called on the Government to take urgent action to protect cash by placing a duty on the Payment Systems Regulator to protect access to cash and to ensure the sustainability of the UK’s cash infrastructure. Will the Minister address that and assure the House, Members here and people watching from elsewhere that that will be the case? It would support consumer choice, prevent financial exclusion, ensure that there remains access to a secure, non-digital form of payment and promote effective competition across all payments.

With all that in mind, I put that suggestion to the Minister for his consideration. I look forward to hearing from him and the Government on how we can ensure that services are available UK-wide, particularly in rural areas. I again thank the hon. Member for Rutherglen and Hamilton West for securing the debate.

10:01

[Douglas Ross (Moray) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen) on securing the debate and on introducing it so well. I was delighted to agree to be a co-sponsor when the hon. Gentleman applied for the debate to the Backbench Business Committee, and I am grateful to that Committee for granting it.

I will divide my comments into two parts. First, it is abhorrent that we should be charged to take our own money out of ATMs. There are still a few in Moray that charge for use. If I come upon one, I will actually go away to another. It might end up costing me more in money, time, fuel and inconvenience, but out of principle I would rather go to another destination than pay a company to access my own money. It is simply unacceptable that, in 2018, we still have to pay some companies to take out our hard-earned money. My constituents in Moray are particularly aggrieved about that.

However, I will focus my remarks on the availability of ATMs in high streets and rural communities, as the motion mentions. ATMs have been critical to many communities in Moray for several years, particularly in Lossiemouth and Keith. A couple of weeks ago, Bank of Scotland announced the closure of eight branches across Scotland. Some are in the constituency of my hon. Friend the Member for Angus (Kirstene Hair), but 25% of those eight are in Moray—one in Keith and one in Lossiemouth. As well as potentially closing the branches next year, the bank will also remove the ATMs.

In the 2011 census, the population of Lossiemouth was just over 6,000. That has now boomed to more than 7,000. The P-8s are coming to RAF Lossiemouth in one of the biggest UK Government investments in our defence estate, which will boost personnel numbers at the base alone by 400, and those personnel will bring their families with them as well.

The town is expanding at an excellent rate, which is encouraged by the local community, yet Bank of Scotland has decided to close its very last branch in the town. With that it will take away the ATM, so a town with a population of more than 7,000 that is expanding will go from three ATMs to two ATMs. One of those is in the local post office at Buckley’s, which is up for sale. If it is sold and that ATM is lost, we could have a population of more than 7,000 and only one cash machine. That is simply unacceptable and cannot be allowed to happen.

[Luke Graham]

My hon. Friend makes a powerful point. Does he agree that banks are speaking with a little bit of a forked tongue? They are closing branches in the areas that really need them, such as his constituency and mine, but are happy to open them in places such as Canary Wharf and Chelsea, which are very well served by the financial system and by broadband, and where more people bank online than in our constituencies.

[Douglas Ross]

I absolutely agree. That issue came up at the two public meetings I have held in Lossiemouth and Keith since the potential closures were announced. The questions at Keith centred on the fact that this would not happen in the central belt of Scotland or in the capital down here in London, where there is a large footfall. Closing one branch would have less impact on communities in Glasgow or Edinburgh than closing the last branch in a town such as Lossiemouth.

My hon. Friend the Member for Angus made the excellent point that some people may decide not to shop locally if they cannot access an ATM so that they can pay by cash. We heard at my Lossiemouth public meeting that a lot of takeaway shops only accept cash payments. It is not that people go there and decide not to buy; they have already purchased on the phone. They place an order, the food is then made, and they turn up to find out that payment is by cash only. With the cash machines potentially going in Lossiemouth and Keith, they may have no opportunity to get money out, and therefore the takeaway business loses income, because it has already produced the order.

Another important point is that, yes, this has a huge impact on local residents, and particularly the elderly, but Lossiemouth and Moray are beacons for tourists coming to Scotland. We want to welcome as many tourists as possible. What will they think when they want to buy something from the local shop, when they want a memento of their visit to Lossiemouth and Moray, but there is no cash machine for them to get their money out to purchase the goods in the town? We have to consider that going forward.

The local Conservative councillor for Heldon and Laich, James Allan led a great campaign in Moray. I pass on my best regards for Councillor Allan, who unfortunately ended up at Dr Gray’s hospital yesterday. He is recovering well. James has been a real champion of this issue in his hometown of Lossiemouth. When the Royal Bank of Scotland left the town and took away its ATM, he led the campaign to reintroduce it. The RBS building has been taken over by a commercial businessman who would be absolutely delighted to retain the RBS ATM in the town, because he knows the needs of local people. He would facilitate and work that machine, but RBS has so far refused to allow the machine to reopen. It really has to consider its obligations to the community. It may leave and close branches, but it should not take lock, stock and barrel away with the ATMs as well.

James has done an excellent study of the number of cash machines in the local area. Lossiemouth, with a population of more than 7,000 and expanding, currently has three cash machines, which will potentially be down to one. Forres, with a population of 12,500, has eight cash machines. Fochabers, which I used to represent as the councillor for Fochabers and Lhanbryde, has a population of 1,700 and three cash machines, compared with a community the size of Lossiemouth, which is expanding and will potentially go down to one cash machine.

I have to say that the mobile banking provision, which the banks always say will support the communities, does not serve our communities particularly well. It is potentially available for one hour every week or every fortnight, and many of the functions of an ATM are not available at a mobile banking service. The Moray Rambler introduced by RBS now covers a far wider area than only Moray, because RBS has closed so many other branches in Aberdeenshire and the highlands and so on, and our service in Moray is diminished even further.

I will finish on a recent court judgment about ATMs in England and Wales. I was involved in an issue with Buckley’s newsagents in Lossiemouth, again with Councillor Allan. It has an ATM that faces out on to the high street, to ensure that people can use it 24 hours a day. The owner, Tony Rook, could put it inside, but it would then be available only when the shop is open. As a servant to the community, he decided to have it outward-facing. He is being punished by the Scottish Government, who have implemented far higher business rates for outward-facing ATMs than those inside a shop.

I hope that the Minister will clarify this. The issue was passed on to me by Councillor John Cowe, who attended the public meetings in Lossiemouth and who is encouraged by the judgment that came down, I think, last month. Since 2010, supermarkets and convenience stores have been liable to pay rates on the machines, but the courts have now decided that that is not correct and have ruled in favour of the supermarkets who took this forward, particularly Sainsbury’s and Tesco, meaning that the £300 million already charged will now be refunded. I agree with the Tesco spokesperson who said:

“We welcome today’s result and the confirmation of our belief that ATMs should not be separately rateable.”

I will be interested in the Minister’s response and particularly whether he has had any discussions with his Scottish Government counterpart about how they will look at the issue in Scotland, because the ruling was for England and Wales only. It will be very important and useful for us to learn what the Scottish Government will do as a result of the judgment, because it will make a big difference to people such as Tony Rook at Buckley’s newsagents.

I am grateful for your indulgence, Mr Hollobone. This is an important debate for our communities, and I am grateful to the hon. Member for Rutherglen and Hamilton West for initiating it. Banks and ATM providers have a moral obligation to the communities that we all represent and serve. The message is coming through loud and clear. Do not take away ATMs, which are an integral part of our communities; they are important for everyone who lives in and visits them. We need them, we need them to be free and we need them to be accessible and available. By shutting them down, banks and ATM providers are shutting down many of the communities that rely on them.

10:10

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I am grateful to you, Mr Hollobone, for allowing me to speak in this important debate. It was a pleasure to be here this morning to listen to the important speech made by my constituency neighbour and hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen). I support his continuing efforts to stand up for the most vulnerable people in our communities through his campaigning on this important issue.

My hon. Friend has already outlined many of the concerns. I will not repeat all the arguments, but will focus on a few key areas: charges, closures and the reliance of many people on ATMs as essentially “the last bank in town” on main and high streets in towns and villages in all four nations of the United Kingdom.

Since my election to this place in 2017, a number of issues have been raised with me in my role as the local MP. One is the impact of Tory austerity on the people I represent in Coatbridge, Chryston and Bellshill. That impact has been made worse by the fact that many of the ATMs available in our community charge residents to access their own money and by the closure of three RBS branches. Forcing people to pay to withdraw their own money is crazy and, in these tough times, so unfair and unjust. I call on ATM providers to think again about the impact on those who have to survive on low incomes and low wages. Those people have to turn the pennies inside out and the pounds upside down to survive, to keep a roof over their head and to keep their families warm and fed. We all have a duty to speak up for them in the House.

The figures speak for themselves. From January to July 2018, 1,300 free-to-use ATMs disappeared, at the disgraceful rate of about 250 a month. According to analysis by Payments UK and the Bank of England, the number of people who rely almost entirely on cash has risen by more than half a million in the past two years to 3 million. Like me, my hon. Friend the Member for Rutherglen and Hamilton West has raised this issue in Parliament, through his private Member’s Bill introduced under the ten-minute rule, which has my full support. I will continue to work with him and others on the Opposition Benches on these issues.

The issue of ATM closures goes to the heart of the debate this morning. My hon. Friend was very clear in his speech that we cannot sit back and watch the programme of closures. I thank Which? for its research on this issue, which has shown that the number of closures of free-to-use ATMs is highest in rural areas. That stands to reason: ATM providers think that fewer people will complain and make a big deal of it. Well, they cannot get away with that, not on my watch, not on my hon. Friend’s watch and not on the Opposition’s watch. I know that most hon. Members here today will not allow it, either.

All colleagues will know that Coatbridge, Chryston and Bellshill is made up of towns and villages across North Lanarkshire in central Scotland. We have main towns and small villages, and I am proud to represent every one of them and all those who live in them. I am determined to stand up for their right to access their own money, in their own community, free of charge.

This debate speaks to the crisis facing our high streets and main streets. All Members of the House will recognise, as they go about their business in their constituencies, that an increasing number of pubs, businesses, post offices and banks are closing. That is why I am hugely supportive of Labour’s five-point plan to support and save Britain’s high streets, outlined by the shadow Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), at Labour’s recent conference in Liverpool. The five points are, first, to ban ATM charges and stop bank closures and, importantly for me, stop post office closures; secondly, to improve local bus services and provide free bus travel for under-25s; thirdly, to deliver free public wi-fi in town centres; fourthly, to establish a register of landlords of empty shops in each local authority area; and, fifthly, to introduce annual revaluations of business rates, ensure a fair appeals system and review the business rates system to bring it into the 21st century.

For many people in my area, the ATM is indeed the last bank in town. If someone does not have a car to travel to the closest branch of their bank, or if they cannot afford the cost of bus travel, they rely on access to an ATM to be able to pay bills and survive. Members of the House will know that Crown post offices are branches directly managed by Post Office Ltd, which is wholly owned by the Government—or should I say by the people who elected every Member of this House. Let me take this opportunity to pay tribute to the postal workers who campaigned in Scotland, England, Wales and Northern Ireland on Saturday for the national day of action to save our post offices. I was proud to campaign with postal workers in Scotland; I am proud of my brothers and sisters in the Communication Workers Union.

As part of the “modernisation” programme, Post Office Ltd has been involved in the privatisation of Crown post offices. The Post Office closes down the Crown post office and looks for a retailer to take over the counter. We are paying £31 million—it is Government money—to subsidise our post offices. That is not good enough. I am delighted that the next Labour Government will stop the franchising of Crown post offices by introducing a new condition into the Post Office’s funding agreement—that no further Crown post office branches will be closed. That will be an important step forward and is so necessary.

I thank my hon. Friend the Member for Rutherglen and Hamilton West for his leadership on this issue and for introducing the debate today. I will fully support him as he continues his endeavours.

10:17

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen) on securing such an important debate on an issue that is of genuine concern to many of my local residents across Stoke-on-Trent North and Kidsgrove. The issue affects both rural and urban communities. Up and down our country, towns and smaller communities are losing access to community-based financial services on an almost monthly basis. These are not “nice to have” facilities; they are a lifeline for people and communities that still depend heavily on cash. I am of course referring to the community banking services—whether that means the local bank branch or the local ATM machines—on which so many people depend.

Earlier this year, I raised the issue of the impact of the closure of local bank branches, which we are also losing at an unprecedented rate. However, basic access to cash is now disappearing from our high streets. LINK’s own figures show that we are losing free-to-use ATMs at the rate of 250 a month. When we explore the reasons for this extraordinary cut to provision, we find that there are multiple excuses, but as my hon. Friend the Member for Rutherglen and Hamilton West made clear, it is in large part because of LINK’s cut in the interchange fee—a decision that had serious repercussions for our ATM network even before it was fully implemented.

The loss of these services is a serious problem in its own right, but there is a larger concern, too. The closure of well-used local bank branches in my constituency and the associated impact on residents and businesses have unfortunately been all too obvious in the last year. Burslem, Kidsgrove and Tunstall have all lost popular local branches. In the case of Burslem, we have found ourselves without a single bank branch left in the town and with no replacement of the ATMs that the NatWest and Lloyds banks operated until their closure. The sector’s lack of local understanding is evident all too often in its decision making. In Tunstall, the Co-operative bank justified its branch closure by stating that customers would be able to access the NatWest across the road. Unfortunately, that bank had already closed and its ATM machine went with it.

For communities that have already lost all-important branches and access to personal banking, ATMs represent a financial service of last resort—a fall-back for the millions of people who still make cash purchases every single day, and for those who do not make contactless payments and prefer to manage their household budgets by allocating cash towards their bills. To do that requires free access to money. A charge of £3.50 to access cash—as in parts of my constituency—is an extraordinarily large proportion for someone taking out only £10 or £20. As ever, those most struggling financially are being punished by the decisions of a faceless corporation.

In Burslem, the mother-town of the potteries, the closure of our last bank means that the only remaining free-to-use ATMs are inside retail facilities and there is nowhere for residents to withdraw cash in the evening. For a town with a thriving night-time economy, that is not just a hindrance to trade but a threat to public safety. Mr Hollobone, if you should leave the pub in Burslem late at night—I am sure you never would—and need money for a taxi, your only option is a long, dimly-lit walk to an out-of-town petrol station. That trip, understandably, could be threatening for many people, especially women, who would not want to make that journey alone. Alternatively, they would have to take a taxi and ask the driver to take them to an ATM and wait, which is far from ideal and costs more money.

In too many parts of my constituency and our country, free-to-use cash points are getting harder to find and further to reach, especially in areas of financial vulnerability. This is exactly the scenario that LINK’s financial inclusion programme was designed to prevent; it was supposed to identify the needs of rural and deprived areas and provide additional funding to ensure that communities did not have to travel more than 1 km, as we have already said, but it is not working. Huge swathes of my constituency do not have access to their money. Neither Goldenhill nor Chell Heath can access a free-to-use ATM within 1 km. In parts of my constituency, this is leading to a spike in the use of illegal loan sharks. There are human consequences to the decisions that LINK is making.

Often, the machines that LINK considers easily accessible to a community are not. The geography or terrain should also be considered. Given that an ATM costs between £7,000 and £10,000 to reinstall, it is almost impossible to get new ATMs in place where there is no provision. I know how important these services are to my constituents, which is why I secured a debate on community bank closures earlier this year. In every debate we discuss the immediate challenge, but we need a policy solution that tackles these issues in the round, which is why my constituency Labour party submitted a motion to this year’s Labour party conference calling for the protection of community banking services to be made official party policy. I am delighted that that policy has now been adopted.

We cannot allow banks to default on their responsibilities to our community, which is why I welcome this debate and congratulate my hon. Friend the Member for Rutherglen and Hamilton West on securing it. I fully support calls to protect our free-to-use ATM network and ensure every community has access to the services it needs.

[Mr Philip Hollobone (in the Chair)]

We now come to the Front-Bench speeches, beginning with Patricia Gibson for the Scottish National party. The guideline limits are 10 minutes for the SNP, 10 minutes for Her Majesty’s Opposition and 10 minutes for the Minister. Then we will allow Ged Killen three minutes at the end to sum up the debate.

10:23

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I thank the hon. Member for Rutherglen and Hamilton West (Ged Killen) for bringing this important debate, and for the work he has done on this issue. I am pleased to participate in this debate on the important issue of our constituents’ access to their own cash free of charge and, ultimately, the issue of social and financial inclusion.

We have heard that 2.2 million people across the United Kingdom are entirely reliant on cash, as opposed to credit or debit cards. It must be correct that we should all be able to access our own cash without incurring any charges. The fact is, those who are reliant on cash transactions tend to be less well-off and are the least able to pay any additional cost to access what little cash they have.

As the hon. Gentleman pointed out, earlier this year LINK, the UK’s largest cash-machine network, announced that it would go ahead with plans to cut its interchange fee by 20% over the next five years. As a result, we have seen hundreds of ATMs closing. Scotland has been hit hard, with 221 free cash machines lost between January and July 2018—around one every day. There are now fewer than 6,000 free cash machines left in Scotland. That sits uncomfortably alongside bank branch closures, as the hon. Member for Strangford (Jim Shannon) pointed out, with banks closing at a rate of 60 each month, leaving significant towns in my constituency—such as West Kilbride, Dalry, Brethe, Stevenston, Ardrossan, Kilwinning—with no bank at all thanks to RBS closures. The communities affected will never forgive RBS for this abandonment and betrayal. I believe that RBS will never again be trusted, nor will it have its reputation repaired. It is still disappointing that the UK Government did not intervene and use what influence they had in that matter.

We have also heard that post office closures, stretching back to 2007 and 2008, have compounded the issue, as the hon. Member for Makerfield (Yvonne Fovargue) pointed out. As the hon. Member for Strangford said, we have the additional problem of postmasters not being replaced; so the issue is snowballing.

I fairly enjoyed the hon. Member for Moray (Douglas Ross) doing his impersonation of a trapeze artist when he tried to blame—if I heard him correctly—the shortage of ATMs and the impact on small businesses on the Scottish Government. He will be well aware, I am sure, that thousands of businesses in Scotland have benefited from the small business bonus. I think anybody in Westminster Hall would agree, looking at the evidence, that the major issue facing small businesses is the concern and uncertainty caused by Brexit. We will just leave that there.

[Douglas Ross]

Will the hon. Lady give way?

[Patricia Gibson]

I will not give way. I will proceed.

So far, 2018 has seen 670 local bank branches closing across Scotland, following close on the heels of the 879 that closed in 2017. In response to this debate, the banks will no doubt tell us that fewer and fewer of us use cash in our transactions; but research shows that at least three-quarters of us use cash at least two or three times a week and it is still the most popular method of payment. The hon. Member for Stoke-on-Trent North (Ruth Smeeth) pointed out—as did almost every contributor to the debate—that those on lower incomes and older people are likely to be hardest-hit by any reductions in access to cash. The less well-off you are and the older you are, the more likely you are to rely on cash transactions, with just over a quarter of people not using card payments at all.

This perfect storm of a reduction in free ATMs and bank closures means that now there are real concerns about the effect that the closures will have on consumers and small businesses without adequate access to cash. This financial and social exclusion is utterly unacceptable. Consumers are gradually being forced into online banking, and the evidence suggests that now they are being gradually forced into cashless transactions—so much for consumer choice.

We heard from the hon. Member for Rutherglen and Hamilton West that in January 2018, LINK announced a series of four reductions in the interchange fee—the amount paid every time a customer uses a free ATM, and which funds the entire free-to-use network—from around 25p per transaction to 20p. However, concerns have been raised and, as we heard from the hon. Gentleman, the third and fourth reductions have been cancelled and put on hold respectively. Cutting the interchange fee was supposed to reduce machines in areas where there were considered to be too many, but maintain geographical coverage of ATMs across the UK. LINK commissioned a review to consider consumer requirements for cash machines over the next five to 15 years. That review was cognisant of the fact that financial inclusion is extremely important for all consumers and will remain so. Their needs and requirements must be met. Like all hon. Members in Westminster Hall today, I look forward to the findings of that review in March.

Meanwhile, research carried out by Which? is truly shocking. It shows that free-to-use ATMs are closing at a rate of 250 a month, while over 100 ATMs with so-called protected status have stopped transacting in the same period. The hon. Member for Rutherglen and Hamilton West set out the challenges associated with ATMs with protected status. Analysis shows that from November 2017 to April 2018, following LINK’s announcement about cutting the fees paid for each ATM transaction, the rate of cashpoint closures increased from around 50 per month to 300 each month. LINK’s own figures show that between January and June this year, 500 cashpoints closed each month. The implications of all this are extremely significant, with more machines being lost in rural communities despite LINK’s pledge that changes would only target urban machines, not rural ones.

Just under half of us use a cashpoint at least once a week, with 80% of us saying that access to free-to-use cash machines is important in our daily lives for paying for goods and services. Forcing people to pay to access their own cash would leave around 10% of us struggling and would constitute nothing less than financial exclusion. It would hit small and local businesses hard, as was set out in some detail by the hon. Member for Strangford. As the hon. Member for Rutherglen and Hamilton West said, already many people struggle to access free cashpoints, with around 11% of us having to walk for more than 30 minutes to access the nearest cash machine and around 9% saying that the nearest machine is simply too far away to reach on foot. That, coupled with the fact that many people do not have access to a car, makes life extremely difficult, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) reminded us.

One in five of us currently does not have access to free-to-use cash, but it seems this might get worse. That is why the calls from Which? for the Payment Systems Regulator to bring more regulatory scrutiny and intervention to bear on this issue are so important. I agree that it is time for the financial inclusion programme to be amended to ensure that the entire ATM network is fit for purpose. LINK has tried to address concerns that all ATMs 1 km or more from the next free ATM will be exempt from any reductions and cuts to fees for transactions made and is increasing the subsidy for these machines, but there is some concern that these measures, although well-meaning, simply do not go far enough. Exempting individual cashpoints from cuts to fees might not be enough to save them. Cashpoint closures are not decided by LINK. We know that recent closures and the inability of LINK to quickly and effectively replace protected machines shows the shortcomings of the current approach.

We have heard from many Members today that it really is time for the Payment Systems Regulator to show its teeth. It seems eminently sensible for the PSR to conduct its own review of LINK’s financial inclusion programme, including the ATM replacement process, because that must be fit for purpose. The Government must also beef up the powers of the PSR to allow it to protect cash, and impose a duty of care on it to ensure the sustainability of the UK’s cash infrastructure. I believe that would do much to protect consumers, the choices they want to make and their financial inclusion.

If it had the power from Government, the PSR could introduce robust measures to ensure that all our communities have free and easy access to their own cash. I urge the Minister to set out how he can empower, and what he is prepared to do to empower, the PSR, to ensure that there is a robust future for free-to-use cash machines. In correspondence with me on 12 September, the PSR has admitted that it is “concerned about these closures”.

[Douglas Ross]

rose—

[Patricia Gibson]

I am hoping the Minister will heed the calls he has heard from all parts of Westminster Hall today to work across party lines to ensure a sustainable, inclusive approach on this issue that works for all consumers.

10:33

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Rutherglen and Hamilton West (Ged Killen) on securing this important and timely debate. I know that he is an avid campaigner in this area and that this debate follows the introduction of his Banking (Cash Machine Charges and Financial Inclusion) Bill, which is intended primarily to end cash machine charges.

Small businesses form the backbone of our economy. Over the past weekend parliamentarians and citizens across the UK had an opportunity to support our small businesses during Small Business Saturday. They are vital to our local communities, from large towns to small rural communities, but in order to survive and thrive they need the infrastructure conducive to their running, which includes a vibrant network of free-to-use ATMs.

As has been outlined, ATMs are under threat. Earlier this year LINK decided to begin a phased reduction of the interchange fee by 5% from 1 July 2018. This reduction in the funding formula has led to concerns that ATMs will become financially unviable, resulting in closure or an increase in the number of fee-charging ATMs. Despite all the discussion to the effect that we are all transforming into a cashless society, recent research by Which? highlighted that demand for cash and physical financial infrastructure remains, and that these services are important to everyday life. In a survey of over 1,200 members in Scotland, Which? found that 44% of people use a cashpoint at least once a week, that nine in 10 people said that free-to-use cash machines are important to their everyday lives, and of those, more than half described them as essential for day-to-day living, with this figure remaining similar across every age group. My hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) eloquently reminded us of that.

A reduction would also lead to one in seven people being deterred from using outlets that accept cash only, placing a strain on consumers and retailers alike. Similarly, a poll of Federation of Small Businesses members found that 59% of retail businesses felt that a cash machine was useful to their business. In addition, 50% of businesses said that their nearest free-to-use cashpoint was already over 1 km away. Many hon. Friends have referred to this scandal today. Although LINK has said that it will provide funding to ensure that there is always a free ATM at least 1 km from another one, in practice this has proved difficult to implement and there are concerns that this standard does not provide free-to-use ATMs in the areas where they are needed most.

The ATM Industry Association has calculated that at least 10,000 free-to-use cash machines could be at risk—almost one in five of the 54,000 ATMs at which customers can withdraw cash without incurring fees. The organisation has found that the worst-hit regions for independent, free-to-use cash machines are set to be rural south-west England, Scotland and urban south-east England, outside London. The Which? and FSB research has shown that there remains a demand for free-to-use cash machines, that reductions could damage consumers and businesses, and that the public could be forced to use fee-paying machines if free-to-use options are reduced. Any reduction will be most harshly felt in rural and deprived areas.

There has been no significant review of the ATM market for a number of years. I know that the Bill introduced by my hon. Friend the Member for Rutherglen and Hamilton West would introduce a legal requirement for access to free cash through ATMs or other means, following a market review of the ATM network by the Payment Systems Regulator to establish demand. The legal requirement would create a function for ATMs to be provided where there is demand, based on the PSR’s review. Reviews could be conducted at regular intervals to monitor demand. LINK has said that it will provide funding so that there is always a free-to-use ATM at least 1 km from another one. In practice, this has been difficult to implement and there are concerns that this standard does not provide free-to-use ATMs in the areas where they are needed most, hence the need for a full market review by the PSR. Both Which? and the FSB have called for a full market review. On principle, Labour does not believe that anyone should have to pay to access their own cash.

Fee charging is the option often taken most in deprived or rural communities, meaning that the most vulnerable are often asked to pay more. We should try to prevent a poverty premium and ensure that access to cash is inclusive. By banning fee-charging machines we can focus on a funding formula that ensures that all ATMs are fully funded without there being recourse to charges. My hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) explained clearly what this means for people in many areas of her constituency.

As the shadow Minister for postal affairs, I find it particularly concerning that under this Government vital local community assets, such as ATMs, are being stripped away. The same is true of our post office network, which has seen a managed decline under the Tory Government. We must protect our local communities’ ability to do business and ensure financial inclusion for all. ATM closures have a detrimental impact on our communities and the Government must ensure that any further closures are immediately halted.

10:39

[The Economic Secretary to the Treasury (John Glen)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Rutherglen and Hamilton West (Ged Killen) for raising the matter and for the thoughtful way he set out several issues that I will respond to. I also thank the other five Back-Bench Members who made contributions.

First, I assure hon. Members present, and across the House, that the Government recognise that widespread free access to cash remains extremely important for the day-to-day lives of many consumers and businesses in the UK, particularly the most vulnerable members of our society. Ultimately, the Government’s approach to payments is one of facilitating maximum choice; consumers should be free to choose the method of payment that best suits them. I acknowledge that several scenarios have been set out, particularly for rural and less affluent areas, and I will come on to address some actions that can be taken at different levels to deal with those challenges.

The fundamental context for the problem is the rise of digital payments and the decline in cash use. The UK has one of the most extensive free ATM networks in the world; some 82% of the ATM network is free. I listened carefully to the remarks of my hon. Friend the Member for Moray (Douglas Ross), who resists the option to pay a fee. I share his antipathy to that situation, but 98% of all ATM transactions are conducted on free ATMs. Moreover, the free ATM network has increased by 40% in the past 10 years and the number of pay-to-use ATMs has fallen by a similar percentage.

However, we must all acknowledge that people are increasingly moving away from cash and towards digital payments. To be specific, in the UK, cash use has fallen from 61% of all payments in 2007 to a remarkable 34% last year. That fall is expected to continue at pace. Correspondingly, the declining number of withdrawals at ATMs is forecast to continue as cash usage by consumers for payments declines. We can all, therefore, recognise the challenge of maintaining efficient, free access to cash.

In response to that challenge, LINK—the UK’s ATM network—announced a series of reforms at the beginning of the year, which have provided the main focus of the debate. Its work to maintain widespread free access to cash involves acknowledging that 80% of free ATMs are within 300 metres of one another. There is evidence that too many ATMs are clustered in busy, urban areas, which unnecessarily duplicates the supply of that service. Therefore, LINK’s measures aim to reduce the amount of ATM duplication in urban areas and avoid unnecessary growth in ATM numbers, despite the observed decline in consumer demand for cash.

[Jim Shannon]

The Minister says that there has certainly been a downturn in the use of cash, but I remind him that we have to acknowledge that almost three quarters of people use cash two to three times per week. An interesting trend, which we cannot ignore, is that 60% of 18 to 24-year-olds also use cash at that level, so it is still vital.

[John Glen]

I acknowledge that we are not seeing the end of cash. The challenge is how we adapt to the different mode and frequency of its use. There is no simple single solution. Clearly, creating a complete network in sparsely populated areas will not always be the right answer.

Although the hon. Member for Makerfield (Yvonne Fovargue) is not in her place, for general edification I will respond to her point about the lack of notice when ATM operators move. They have a duty to inform LINK that a protected ATM will close. LINK can offer premiums to all its members to incentivise the replacement of the machine. It has set up a publicly available monitoring tool on its website that shows ATM availability. It has the power to mandate and directly commission an ATM deployer where one is necessary.

LINK’s measures aim to reduce the duplication that I mentioned earlier and to intervene where necessary. It aims to incentivise broad, national coverage of free ATMs and to protect every community across the UK from losing free ATM access. Specifically, LINK has ensured that free ATMs that are 1 km or more from the nearest free ATM are exempt from any reductions in the interchange fees that fund free ATMs. It has put in place specific arrangements to protect free ATMs more than 1 km away from the nearest free ATM, including boosting the interchange fee available in those areas. It has also enhanced its financial inclusion programme by tripling the interchange fee available to the lowest-income areas of the UK, to ensure that they all have at least one free ATM. Some 93%—an all-time high—of the most deprived areas in the UK have a free ATM.

That fact has to be seen in the context of the £2 billion of investment in the Post Office since 2010. The £370 million that is earmarked for 2018-21 is designed to maintain the last post office in the village and ensure that consumers can use the over-the-counter option to secure cash.

[Douglas Ross]

I am grateful to the Minister for his courtesy in giving way—a courtesy that was sadly lacking in the hon. Member for North Ayrshire and Arran (Patricia Gibson). As he is speaking about post offices, does he think that the hon. Lady did not take my intervention because she is fully aware that business rates are overseen by the SNP Scottish Government in Scotland? The problem for the Lossiemouth post office is that it is being punished by the SNP Scottish Government for having its ATM facing outwards and accessible 24/7 rather than inside the post office, which has therefore reduced the hours when the ATM is accessible.

[John Glen]

In response to my hon. Friend’s earlier request, the Government are aware of the Valuation Office Agency’s ruling and are considering their response, which will come in due course. He points out that there is a clear distinction in that behaviour.

[Carol Monaghan (Glasgow North West) (SNP)]

The Minister talks about the importance of keeping an ATM in rural and deprived areas. The difficulty is that when there is only one ATM in such areas, it often experiences high levels of usage and regularly runs out of cash, which is worse than not having it at all in some ways. I encourage him to do what he can to ensure that we keep a network, even in such areas.

[John Glen]

It is obviously difficult for me to comment on each of our 64,400 ATMs, but the hon. Lady makes a reasonable point, which I will certainly take back to my next meeting with the Payment Systems Regulator.

[Patricia Gibson]

Will the Minister give way?

[John Glen]

Yes; I have a bit of extra time.

[Patricia Gibson]

The Minister mentioned the Payment Systems Regulator, so before he moves on I want to ask whether he is considering giving it greater powers to protect cash, and imposing a duty of care on it, to ensure that the UK’s cash infrastructure is sustainable. That would address a lot of the concerns that hon. Members have expressed.

[John Glen]

I will come on to talk about the powers of the Payment Systems Regulator, which I have met. My judgment is that it has considerable power over the LINK network. It can mandate LINK to do certain things and it can impose fines. I would need to look carefully at what that proposal would involve and where it would be different from the powers that LINK has at the moment.

I acknowledge LINK’s independent review, which is chaired by Natalie Ceeney. As was mentioned earlier, the report will be published in March. It is looking at long-term access to cash and exploring further the impact on consumers and small businesses of the shift from cash to digital payments. I have met Natalie Ceeney and encouraged her to look as broadly as possible at this issue. I imagine that the nature of her powers, as well as what she needs to do her job, will be part of her report.

This House should also note that the payment systems regulator, which the Government established in 2015 to ensure that payment systems work well for those who use them and which regulates LINK, has taken a lead in examining this issue. Following the first publication of LINK’s ATM footprint report, the regulator used its powers to place a specific direction on LINK. This is designed to make sure that LINK does all it can to fulfil its public commitment to preserve the broad geographic spread of free ATMs and to report to the regulator on a regular basis.

I think I have addressed a number of the concerns raised in the debate. The Government have invested heavily in maintaining a stable network of post office branches. Anyone can use their LINK-enabled bank card to take money out for free at the counter of every one of the 11,500 post offices in the UK. I acknowledge that a post office needs to be open for that to happen, so I am not presenting it as a perfect solution, but it is a significant alternative source of cash for many people.

Additionally, in the autumn Budget at the end of October the Chancellor announced the Government’s plan to help local high streets to evolve and adapt to changing consumer demands. It included £675 million for the future high streets fund to support local areas’ plans to make their high streets and town centres fit for the future.

The hon. Member for Rutherglen and Hamilton West raised a couple of specific points about digital payments failure. The Treasury and the UK financial authorities take this issue very seriously and are investing in improving the operational resilience of the system, including cyber, across the financial sector. Over the next five years, £1.9 billion will be spent on cyber-security initiatives.

The hon. Gentleman also asked about helping the vulnerable. The Department for Digital, Culture, Media and Sport has a digital skills partnership that is looking at partnerships across the private, public and charity sectors, which also involves training in digital skills for adults.

On the point about the powers of the PSR, it has the power to direct LINK and impose financial penalties; it is committed to using those powers. It also made a direct intervention on the interchange fees to LINK to deal with this issue.

To conclude, I thank the hon. Member for Rutherglen and Hamilton West for raising this issue. It is surely right that we consider the impact of an increasingly digital world and ensure that we protect those who need to be able to pay by cash. In the here and now, cash use remains important; it is still the second most frequently used payment method, just behind debit cards. We also know that around 2.2 million consumers predominantly use cash, many of whom are the more vulnerable members of our society.

I take this matter very seriously. I chair the Government’s financial inclusion forum, and for me there is a combination of interventions. There will be interventions from the regulator to deal with those who are making it very difficult for people to access affordable credit. However, this issue is also about increasing capacity.

I do not rule anything out in terms of efforts to improve the situation. With my officials, I have spoken to the PSR about this issue, and it has engaged with the regulator and LINK on this topic. I assure the Chamber this morning that I will continue to emphasise the importance that this Government place on widespread free access to cash.

10:53

[Ged Killen]

I thank hon. Members for taking part in this debate; I was encouraged to see so many people first thing on what promises to be a very long day indeed.

I also thank the Minister for his response. Unfortunately, for some of it I felt like I was hearing the LINK briefing that I have heard a thousand times being repeated back at me, but there were some interesting things in there that I agreed with. I was encouraged to hear him say that the authorities were investing in cyber security, but I suggest to him that the people who are seeking to undermine our security are also invested in that endeavour.

As we witness the rise of digital technology, which the Minister mentioned, we have to consider the experience of other countries, such as Sweden, that are now retrospectively looking at Government intervention. We have a chance in this country to get ahead of that by considering intervention now.

I agree with the Minister when he says that this issue is about consumer choice; he is right about that. However, having listened to the concerns of Members here today, he will understand that that choice is being taken away from some people, due to the lack of availability of free cash. He can quote some favourable statistics showing that the situation is better than we might have suggested, but on the ground the picture is very different for the communities that we represent.

We all recognised what the hon. Member for Moray (Douglas Ross) said about going to other ATM machines if he finds one that is charging a fee. I am exactly the same. Unfortunately, as he said, not everyone has the ability to go to another ATM.

The hon. Gentleman made an interesting point about business rates, which must be looked at. I have heard these concerns expressed many times by shop owners in particular. They are concerned not just because ATM machines attract business rates; as I understand it, an ATM machine in a store actually increases the rateable value of that store overall, which brings additional costs for that business. We need ATMs to be there if there are no bank branches offering ATM provision.

The hon. Member for Strangford (Jim Shannon) said that cash transactions were still in high use. From memory, when I spoke to Tesco it told me that over 60% of its transactions in store are still cash, and that there is a withdrawal from one of its ATM machines every 10 seconds. So, it is simply not right to say that cash is on the way out yet. As I have said, we are in a transition towards a cashless society, but we are not there yet and we have to get that transition right.

My hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) said that services such as ATM provision were a lifeline for our communities, and spoke about the percentage of someone’s income that they could pay out in charges if they withdrew £10 from an ATM machine and were charged. Of course, if that person has only £10 in the bank, they will be unable to withdraw that from one of these ATM machines that charge.

I conclude by giving my private Member’s Bill one final plug. I am pleased to report that the inventor of the ATM machine and the PIN code, James Goodfellow, is alive and well in Scotland. Mr Goodfellow supports my private Member’s Bill. So, if the Minister is unwilling to take my word for how important this issue is, perhaps he will consider taking the word of the inventor of the ATM machine.

Question put and agreed to.

Resolved,

That this House has considered the effect of ATM closures on towns, high streets and rural communities.

Out-of-area Education: Cared-for Children

Tuesday 4th December 2018 Westminster Hall

10:57

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

I beg to move,

That this House has considered cared-for children educated out of area.

It is a delight to see you in the Chair, Mr Hollobone. I should first explain, for those who may know them by another name, that cared-for children are the same as looked-after children—so if I refer to looked-after children in my speech, people will understand who I am referring to.

The use of children as drug mules by “county lines” gangs seems to make the news almost daily. Some might think that this is a new problem, but it is not. A year ago, almost to the day, there was an article in The Times about thousands of children being groomed as drug mules. A couple of days later there were two letters in the same newspaper from headteachers in east Kent, complaining about the number of looked-after children being placed in children’s homes and foster homes in Kent by local authorities from outside Kent, particularly London boroughs. It is outrageous that the most vulnerable children should be sent to one of the most deprived and challenging parts of the country, and of course those vulnerable children are most at risk of falling prey to criminals. There is an acknowledged link between the growth of drug-related gang crime in Kent and the number of looked-after children being sent to the county from London.

Protocols are in place that are supposed to prevent local authorities sending looked-after children farther than 20 miles from their home, and local authorities are not allowed to place a child in foster care without first securing a school place, but the protocols are repeatedly ignored, which means the problem is getting worse. Increasing numbers of looked-after children are being placed in Kent, not only by London boroughs but by counties as far away as Hampshire and Wiltshire. Indeed, only last week Buckinghamshire sent three children to a school in Thanet. That not only places many of the children in danger, but puts pressure on already hard-pressed schools and on Kent’s social services. The problem is made worse because the children are, in the main, placed in areas where there are already pockets of deep social deprivation, such as my constituency, which currently has the largest number of looked-after children from outside the area in Kent.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing the matter to the House. Sometimes it may not be of the utmost importance to many people, but it is an issue of importance to us across the whole of the United Kingdom of Great Britain and Northern Ireland. I will give an example of how this is happening not just in the hon. Gentleman’s area. The number of children per capita in Northern Ireland is the lowest in the UK, but there is still a lack of available foster carers, which means that children are fostered, and therefore educated, out of their home area. Moving school is incredibly difficult for children. Does he agree that there must be a better way of ensuring that there is as little upheaval as possible, and that kinship fostering should be encouraged?

[Gordon Henderson]

I fully agree with my hon. Friend—he is my friend—that that is a problem. He is right that there are other solutions, one of which is to increase the funds available to local authorities so that they can pay more to keep children in their own areas.

As I was saying, pressure is put not only on our local schools but on social services, and the problem is exacerbated by children often being put in areas of deep social deprivation. The chairman of the Kent Association of Headteachers, Alan Brookes, who also happens to be the headteacher of one of the best secondary schools in my constituency, told me:

“The fact that there are currently 353 out-of-county looked-after children in Swale and Thanet, but only 42 in Tonbridge and Tunbridge Wells, clearly demonstrates that market forces, rather than morality, are driving this practice.”

Alan gave me that information over a year ago, a month before The Times published its article, and I shared, and still share, his concerns. I wrote to the Minister for Children and Families, who acknowledged our joint concerns regarding

“areas being chosen for out-of-authority placements and the relationships of placing authorities with school.”

I hoped that such an acknowledgment would prompt at least some sort of action. However, we are a year on and nothing has happened, other than that the situation has worsened. There are now 1,329 out-of-county looked-after children in Kent, 467 of whom live in Swale and Thanet—Swale is the local authority covering my constituency. That is 40% of the total in the whole of Kent, and 30% more than 12 months ago. Those 1,329 children have been moved away from their home areas, their friends and the surroundings in which they were born. Being moved so far from home is not good for vulnerable youngsters, for the Kent schools that are expected to educate them, or for Kent social services, which are expected to look after them.

In conclusion, I will read out one of the letters I spoke about at the beginning of my speech, because it expresses in stark terms the frustration felt by many headteachers in Kent. It reads:

“Sir, as a head teacher in Margate the terminology of cuckoo houses and county lines is all too familiar to me. Local authorities have shown irresponsibility and an utter lack of morality by sending their most vulnerable young people to Margate in order to secure cheap foster care. This is a national disgrace of the magnitude we have seen in Rotherham, yet head teachers are threatened with ‘secretary of state direction’ when they make a stand and refuse. It is time the Government prevented this obscene dumping of children.”

I could not have put it better myself.

09:00

[The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)]

It is a privilege to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) for securing this important debate. I know that the education of children in care placed in Kent from other authorities is a long-standing concern for him and a number of his colleagues in neighbouring constituencies. In September, I met my hon. Friend the Member for North Thanet (Sir Roger Gale) and representatives of the Coastal Academies Trust, and I and my officials have discussed the issue with the National Association of Virtual School Heads. The issue is clearly engaging many Kent Members of Parliament.

Children in care are some of our most vulnerable children, and we know that their educational and other outcomes are nowhere near as good as they should be, even when their pre-care experience and high levels of special educational needs are taken into account. That is something that I, as the Children’s Minister, am absolutely determined to address. I am committed to doing everything I can to ensure that children in care have the opportunities I want for my own children, which is why I stress that the language I sometimes hear and read, of children in care being “dumped” in other areas, is particularly unhelpful. It is in many ways an oversimplification of a complex issue, which fails to recognise the crucial role that out-of-area placements can play in, for example, disrupting gang violence, trafficking and sexual exploitation. Of equal concern is the stigma and narrative it attaches to this vulnerable group of children and young people in the communities in which they are placed.

That is not to underplay the concerns of my hon. Friend the Member for Sittingbourne and Sheppey, including his desire, which I absolutely share, to ensure children’s safety. Safeguarding children and tackling county lines is a priority for the Government. In August, I announced that we intended to contract a new service to tackle a range of threats involving child exploitation, including county lines, gangs, modern slavery, child sexual exploitation and child trafficking. The service will operate from April 2019, with funding of up to £2 million.

Through the recently published serious violence strategy, we have provided £3.6 million for the establishment of the new national county lines co-ordination centre, to enhance the intelligence picture and support cross- border efforts to tackle county lines. In Kent specifically, £300,000 was awarded for a support services pilot, run by the St Giles Trust, for exploited young victims caught up in county lines drugrunning between London and Kent. The pilot offered one-to-one support to exploited victims caught up in county lines, as well as specialist return-home interviews with those returning from exploitation.

[Gordon Henderson]

I welcome that initiative—it is very good—but the problem with it is that it only relates to people who are known to be in that category, and ignores the hidden youngsters who never reach that stage.

[Nadhim Zahawi]

I agree with my hon. Friend: it is not a panacea. It does not solve the whole problem, but I wanted to reassure him that we are taking the issue very seriously. I fully appreciate that placing a child far away from home can break family ties and make it difficult for social workers and other services to provide the support that young person needs. However, some children may need to be placed further from home—so that they can access specialist provision, for example. We are clear that out-of-area placements should be made when it is the right thing to do for that child, not because there is no alternative. I think that is the point that my hon. Friend is making in his very good speech.

[Gordon Henderson]

If it is the case that there are children who should be placed further from home, why is there a protocol that says local authorities should not be sending them further than 20 miles away?

[Nadhim Zahawi]

As I say, my hon. Friend raises an important point. I hope that when he has heard the rest of my speech, he will at least recognise that this Minister recognises the issue, and that the Government are beginning to tackle it. However, what I can provide him with is a long-term strategy, rather than short-term fixes.

It is our duty to ensure that looked-after children have the best possible care and education placements, and that the decisions made on those topics are not taken in isolation from each other. As of March this year, 19% of looked-after children were placed more than 20 miles from their home. We recognise that this is often a result of insufficient capacity in the home area—especially in London—rather than underlying care need or poor practice, which is another point that my hon. Friend the Member for Sittingbourne and Sheppey has made. My hon. Friend has also explained some of the issues that local authorities in Hampshire and Buckinghamshire are having, which we know have a direct impact on other areas, including his own constituency and Kent overall.

Some local areas can host significant and disproportionate numbers of children who are looked after by other local authorities. As of 31 March this year, 45% of the children placed within Kent’s boundaries were the responsibility of an external—meaning another—local authority, a figure that is slightly higher than the national average of 40%. However, the overall number of children placed in Kent who are the responsibility of an external local authority has remained stable since 2013, despite the overall increase in the number of children in care over that same period. That supports the sector’s claim that it is doing everything possible to avoid such placements unless there is no alternative.

[Gordon Henderson]

That does not explain why the number of out-of-area looked-after children in my constituency and neighbouring constituencies increased by 30% over the past year. That simply does not equate with what the Minister is saying.

[Nadhim Zahawi]

The overall number in Kent has remained relatively flat since 2013. I suspect that particular wards or parts of Kent are taking a greater number of looked-after children, hence the rise in the number of those children in my hon. Friend’s constituency and neighbouring constituencies.

[Gordon Henderson]

I accept that: that is the point that I am making. Those children are being placed by other authorities way outside their areas, not for the children’s benefit, but to save money by getting the cheapest possible foster care. That is immoral.

[Nadhim Zahawi]

I take on board my hon. Friend’s forceful remarks about how local authorities are behaving, but I remind the House that out-of-area placements will always be part of the landscape. I think my hon. Friend shares that conviction, but he is challenging us—urging us—to do more to make sure children are placed nearer to their home, which we are doing. We are doing a range of things to address issues of sufficiency, including investing part of our £200 million children’s social care innovation programme in projects in London, where demand for placements far outstrips supply. That investment will increase councils’ capacity, so that fewer children are placed far away from home, including in my hon. Friend’s constituency and in Kent overall. We are setting up the residential care leadership board to drive practice improvement and share learning across the sector. We are providing funding to three local authorities where out-of-area placements are far too common, in order to set up new secure provision. My hon. Friend rightly identified fostering as a concern; earlier this year, I committed to providing seed funding to fostering partnerships, which will increase the sufficiency of foster parents and improve commissioning, so that we do not end up in the sorry situation that he articulated.

I will touch on educational placements and support for schools. Schools play a vital role in supporting looked-after children: children in care often tell us that school is the only stable thing in their life, and the evidence supports that. The greater the stability and permanence that we can deliver for those kids, both in care and in educational placements, the better their educational outcomes will be. That is why our guidance is clear that not only should care placements ideally be in, or near, the home area, but that everything should be done to minimise disruption to education and, where appropriate, maintain the child’s current school placements when considering care options. Far too often we hear of delays in securing school places for children when, for whatever reason, a change is needed. Children being placed out of their own area in-year are most subject to delays, which is unacceptable.

[Gordon Henderson]

Once again, I agree with the Minister. However, he has re-emphasised the problem: secondary schools in my constituency are already overflowing. There are not enough places for all the home-grown children, so we have a problem when out-of-county looked-after children are moved into our area. There are no places, but because I have some excellent headteachers in my constituency who refuse to turn those children away, they are put at a disadvantage.

[Nadhim Zahawi]

I commend and thank those excellent headteachers, who go above and beyond. From the evidence I have seen, they do a fantastic job. Sometimes—dare I say it?—they are victims of their own success, because they do such a great job with these most vulnerable children. Schools can draw on the expertise and resources of the local authority virtual school heads, including, of course, the pupil premium plus funding of £2,300 per looked-after child.

However, we need to ensure that schools receive all the information and support they need to both understand and meet the needs of children who are placed with them. We have heard that such information and support can be lacking, or too late in coming, when children are placed out of area. As my hon. Friend the Member for Sittingbourne and Sheppey has articulated, that adds to the pressure felt by teachers and school heads, and risks placing schools in an extremely difficult position. At worst, it sets up the child and their placement to fail, which none of us wants to happen. We recognise the challenges of school admissions for looked-after children. I want to work with the sector to ensure that provision of information and support happens in a timely manner, and that school placement is given proper consideration during the care planning process, rather than being an afterthought once care planning has taken place.

We are carefully considering what we can do to ensure that all children in care can secure high-quality school places without delay. I am clear that the lengthy delays that have been reported to me and in the media in getting schools to admit these vulnerable children are not acceptable. I do not think that a child’s future life should be part of the political machinations of local government and this place. The future of that looked-after child must be paramount. Looked-after children are placed in schools for good reason. It is important to remember that instead of turning away these children, schools can and sometimes will be directed to admit them.

Finally, I again thank my hon. Friend. He is a passionate advocate for the right outcomes for vulnerable children, not only in his constituency but in the whole of our country. I thank him for securing this debate on such an important issue; it holds our feet to the fire and reminds local authorities of their responsibilities. He and others have raised a number of important issues with me. I thank the hon. Member for Strangford (Jim Shannon) for making time to be here for this important debate. I reassure Members that we are doing all the things that I outlined in my comments earlier.

[Gordon Henderson]

I have been reassured by the Minister’s words, but I hope I do not have to come back next year with exactly the same complaints.

[Nadhim Zahawi]

I thank my hon. Friend for that further intervention and the challenge he sets us in government. It is incumbent on all of us responsible for the upbringing of these children—through no fault of their own, other than the accident of birth, they have been dealt the worst hand possible, and the baton of parenting is held in our hand, and I include myself and my officials in this, as well as my hon. Friend—to ensure that children in care have the same support and opportunities behind them as our own children. I again thank my hon. Friend, and I thank you, Mr Hollobone.

Question put and agreed to.

11:22

Sitting suspended.

Mental Health and Wellbeing in Schools

Tuesday 4th December 2018 Westminster Hall

09:59

[Layla Moran (Oxford West and Abingdon) (LD)]

I beg to move,

That this House has considered mental health and wellbeing in schools.

It is a pleasure to serve under your chairmanship, Mr Stringer. I am delighted to have secured today’s debate on mental health and wellbeing in schools. I am sure that many hon. Members will know that I am a former teacher. My interest in this subject comes from the link between mental health and wellbeing and learning. I will come later to all sorts of issues surrounding children’s mental health and the lack of services out there, but I hope that today’s debate will focus on how this issue affects children, and indeed teachers, in schools.

Schools are not just places where we help students and children to learn resilience and the skills that they need to build themselves up so that they become adults who can cope with all sorts of pressures that are thrown at them; schools themselves can influence the mental health of children. Some of the debate so far has focused too much on the outside influences on children coming into school. Today I will focus on aspects of the current schooling system that exacerbate that problem.

Let us look at the scale of the issue. The National Society for the Prevention of Cruelty to Children says that the number of schools seeking help from mental health services is up by more than a third in the last three years. The number of referrals to NHS child and adolescent mental health services by schools seeking professional help for a student was 34,757 in 2017-18. That is the equivalent of 183 every school day. To say that this is anything other than a crisis would be wrong. We are facing a crisis of mental health issues in our schools.

The National Education Union further found that 49% of education staff said that secondary school pupils had been suicidal as a result of the stress that they were under, and more than half of professionals surveyed said that funding for support for pupils’ mental health in schools was inadequate.

[Stephanie Peacock (Barnsley East) (Lab)]

I congratulate the hon. Lady on securing this important debate. In my constituency of Barnsley East the local clinical commissioning group has been working with schools to try to embed support in a project called “MindSpace”. Does she agree that projects such as MindSpace that get trained counsellors into school, to be there every day, need more funding?

[Layla Moran]

I thank the hon. Lady for her contribution. Funding is part of it, but a number of interventions are taking place in schools, and they have to be critically evaluated. We have to look at the evidence to see whether they work. To my knowledge, only one—the Bounce Forward intervention programme—has been shown to have had a positive impact. I am not saying that the intervention that she mentioned does not, but we need to be careful that what we are doing in schools works. It is incumbent on the Government to ensure that that critical evaluation happens.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate the hon. Lady on securing this timely debate. Just before the 2010 general election, I introduced a Bill, which I discussed with the then education Ministers, that provided for somebody with medical knowledge, for want of a better term, to be available who would be able to spot mental illness, or other illnesses. In a way, that would have helped teachers as much as parents to do what would probably be called early intervention. Unfortunately, a general election came along, and the rest is history. Had that Bill passed, it could have been a great starting point.

[Layla Moran]

I thank the hon. Gentleman for his intervention. He makes an important point, and I will get to what the Government are suggesting in a moment. I also add a note of caution: I do not think that we should over-medicalise being an adolescent. There is a grave difference between that and ensuring that there are proper services for those on the acute end of the spectrum.

Coming back to funding cuts, one of the best bits of being a teacher in my day was having time to get know the students, and develop a level of trust with them, very often after a class was finished, or during an after-school club. Those are the kinds of things that are going. There is pressure on teachers, with cuts to the number of teaching assistants and a narrowing of the curriculum. Teachers have to teach more lessons and do more prep, meaning that they have less and less time for that critical pastoral support. What are the Government doing to measure how pastoral support in schools—the time that teachers have to spend with students—is changing?

It would be remiss in a debate such as today’s not to talk about teachers. Mental health in schools is not confined to the children; there is a crisis among teachers as well. A report by the charity Education Support Partnership, including a survey of 1,250 education professionals, showed that a huge majority—75%—of the UK’s education professionals had suffered from either mental or physical health issues in the last two years due to work. Some 50% of those who took part in the study said that they had experienced depression, anxiety or panic attacks due to work, and the charity has warned that unless urgent action is taken over rising mental health problems, there will be a severe retention and recruitment crisis. We already know that that is one of the issues that our schools are facing, and it exacerbates all the issues that I was describing regarding pastoral care.

The impact of Ofsted on the mental health of teaching professionals also needs addressing. The way in which Ofsted operates under its current inspection framework drives the wrong kinds of behaviour in schools. I believe, and the Liberal Democrats have now made this party policy, that the brand of Ofsted is so broken in the teaching profession that it needs scrapping and replacing with another inspectorate that does that job. Critically, the job of school improvement must be separated.

I sit on the Public Accounts Committee, and in a recent hearing we heard how school improvement is being lost amid academies’ governance structures and the lack of services provided at local authority level. Representatives from the Department for Education could not definitely say that it was their job, and neither could those from Ofsted. The Liberal Democrats believe that it is time to have an arm’s-length body that focuses on school improvement for all schools, no matter their governance structure, and a separate inspectorate that does that specific job.

Further to that, we need to change the framework for school inspections. It should not just be about numbers. I am the school governor at a primary school. I sit on the performance and standards committee of that school, and it is all about numbers. We are reducing children to single numbers; we look at their progress but do not allow teachers the time to look at broader issues. We believe that we should have an inspectorate that looks closely at wellbeing in schools and measures that part of what a school delivers as critically as attainment and progress. Having said that, I welcome much of what Amanda Spielman is doing in terms of drawing together the issues in education, particularly where she has spoken about the narrowing of the curriculum and off-rolling. That role is vital, so I do not want that to be lost in today’s debate.

Another thing that I want to bring up is league tables. Early in my career, during my first couple of years of teaching, in the early 2000s, I was a fresh-faced, brand-new physics teacher and I absolutely adored my job. I went into a school where I lost my faith in the profession very early on. We were teaching GCSEs and all the science students had been put up on a wall and colour coded. This was when we had A to F grade. The reds were the ones who were never going to get to the C boundary, and the greens were the ones who looked as if they were going to pass. We were told in no uncertain terms that we had to focus on the middle group, who were coloured yellow. That did not make any sense to me. I thought that I should be able to focus on those who needed it the most. When I asked why, I was told, “League tables.”

What can the Government do about league tables? I am not saying that we should get rid of any of the data; we should publish it. However, on the DFE website one of the first things that people can do is click on performance tables data. They are then encouraged to compare schools in their local area. Comparing schools is not a bad thing; parents need to have the right information. However, it should not just be about numbers; there needs to be a full sense of what the school offers, including its extra-curricular stuff and its ability to deal with wellbeing and mental health issues. That is not what people get; they either get performance tables data, or a link to the school’s Ofsted report, which, as I just mentioned, is inadequate in that form. The Liberal Democrats have therefore said that we would stop the Government doing that, even if we cannot stop the press doing it. In Ofsted’s annual report, which was published today, Amanda Spielman noted that, shamefully, thousands of children are being let down by off-rolling. The off-rolling epidemic in schools is a direct result of schools’ desire to push up numbers. It is about numbers, not about the children, and that cannot be right.

The Government are fostering a culture of senseless competition among schools, in which results from a single set of narrowly focused high-stakes exams are the be-all and end-all. That is not good enough. Amanda Spielman wrote to the Public Accounts Committee in October about the narrowing of the curriculum:

“Where we do have clearer evidence of a decline in the quality of education are in the narrowing of the curriculum in schools and an endemic pattern of prioritising data and performance results, ahead of the real substance of education…schools must work to make sure that pupils leave school with the qualifications and examination results that set them up for future success…However, our research has found evidence that an overly data-driven accountability system is narrowing what pupils are able to study and learn.”

My worry is that rather than encouraging children to flourish at every turn in their lives—which can often be one step forward and two steps back; that is how life works—we have a curriculum that encourages multiple levels of failure. It starts with baseline testing as soon as children get into schools, moves on to SATs and continues with exam after exam. Every young person whom I have asked about high-stakes testing tells me that it has got worse and worse.

I was an experienced teacher before I came into Parliament, but I am still one of the youngest MPs. We have to remember that the school system that we MPs went through is not the same as the system that students are going through now. There is much more high-stakes testing in the curriculum now, and we have to stop it, so the Liberal Democrats have committed to getting rid of SATs. We are not saying that data is not important, but we can collect it in other ways. For the record, as a physics teacher I loved exams—they were great—but they do not have to be so high-stakes. They can be part of learning well; they do not have to be the be-all and end-all. I am seriously concerned.

[Andrea Jenkyns (Morley and Outwood) (Con)]

I thank the hon. Lady for securing this debate. I, too, have worked in education, so I understand the challenges that our young people face. Does she agree that the Government are making a step in the right direction by ensuring that young people will be prioritised with school-based mental health support available in every part of the UK?

[Layla Moran]

I will come on to the Government’s proposals in a moment, but yes, I do call that a step in the right direction.

To come back to the thrust of the debate, what does my speech so far have to do with mental health? Lisa, a mum of three children in my constituency, writes:

“I had a chat with my 6-year old’s teacher about the amount of homework they get. Her response was that parents needed to see the SATS papers the children would have to sit in May. They would then understand how much work the children needed to do to reach the expected standard. The problem with the ‘expected standard’ is that it only looks at certain aspects of the curriculum and then puts children into boxes”.

If they do not meet that expected standard, they can only interpret that they have failed. Lisa goes on to say that

“putting children in boxes which suit a government body is, in my humble belief, creating mental health issues at a very early age.”

I would like our debate to focus on that toxic culture.

Let me move on to what the Government have announced. We now have a plan, at least, which I would call a step in the right direction, although it is not sufficient. We are looking at having health professionals in schools—a massive workforce of thousands. My question, which was shared with some scepticism during the Public Accounts Committee inquiry, is where those professionals will come from. The professionals whose roles we are looking to create are the same people we cannot get for nursing or midwifery, because it is the same type of person who might want to do the job.

I am seriously concerned that we are creating a parallel system, while the problem could have been solved by having school nurses in the first place. To return to the subject of funding cuts, school nurses were a valuable part of schools’ wider pastoral care. Many schools have lost their school nurses, which is a crying shame.

[Andrea Jenkyns]

Does the hon. Lady agree that mental health should be treated in schools with the same importance as physical health and that it should be central to the Government’s health agenda? I agree with what she says about nurses; we need to ensure that that is central to future policy.

[Layla Moran]

I completely agree. In fact, I would argue that if mental health is the Cinderella service in the NHS, children’s mental health is the Cinderella of the Cinderella service. That is brought into stark relief by child and adolescent mental health services across the country, although I will focus on Oxfordshire. My postbag is full of letters from parents who are desperate to get their children to CAMHS for all sorts of reasons. We have to remember that CAMHS is there for the most acute mental health needs; it does not cover the mild to moderate needs that so desperately need solving in school at an early, preventive stage. In Oxfordshire, children can wait for a referral for up to two years; extraordinarily, they are then often pushed back.

The Education Policy Institute reports that the number of referrals to specialist children’s mental health services has increased by 26% over the past five years, although the school population has increased by 3%. Something is clearly going on, whether it is lack of early intervention in schools or increased pressure.

[Stephanie Peacock]

Does the hon. Lady agree that it is quite concerning that people need to be in absolute crisis even to get a referral? Often young people need to be suicidal before they can get a referral. That is absolutely shocking. Surely earlier intervention would be much better.

[Layla Moran]

I completely agree. It is especially shocking with respect to issues such as depression and eating disorders. Parents seek referrals, but when—after a waiting time of six months at the very least—they see a professional, they are told, “I’m sorry, but your daughter’s not sick enough.” They despair, because they do not know what to do any more. We need a much more joined-up service. A lot of these things are picked up in schools, so schools have a part to play.

There is a lack of resources for CAMHS across the country, and unfortunately the new commissioning service is not going to solve it. The funding problem for mental health services shows that we do not have parity of esteem between mental health and physical services; I know that the Government want it, but they cannot pretend that it has happened. If they say that children’s mental health is a priority within that, I ask people to look at the evidence given to the Public Accounts Committee’s inquiry into children’s mental health services and see for themselves that that is absolutely not the case. The Government know that there is not enough money for CAMHS.

The EPI study further points out that as many as a quarter of local authorities have phased out vital support services around schools, including school-based mental health services, family counselling and support for those living with domestic abuse. The median waiting time for treatment is 60 days, but I am well aware of many constituents who have had to wait as long as two years. That is extraordinary.

Last but not least, I want to discuss the impact of cuts, particularly on local government and on the support available in the wider community. As we know, schools never exist in a vacuum. As today’s Ofsted annual report points out, schools cannot fix everything, but for a lot of children they are often where the buck stops. Cuts elsewhere in the system, particularly in local government, have a massive impact.

I have secured quite a number of debates in Westminster Hall, but of all of them, this debate attracted the most responses when I tweeted about it. I would like to share one with hon. Members, from Vanessa Whitcombe, headteacher at Castle Manor Academy:

“Just emailing following your Facebook post regarding tomorrow’s debate. We are trying so hard to prioritise mental health and wellbeing in schools, applying for grants, paying for school nurse service as ours has been withdrawn, participating in Anna Freud school mental health award, peer mentoring programmes, reducing workload for teachers and putting in wellbeing support, and we are really proud of the small steps we are taking forward. But they are small, as they are against a backdrop of dwindling external services and decreasing budgets. External service provision and early help is only available at such a high threshold we feel like we are firefighting, and it is the most vulnerable children and families that are not accessing what they need. Amanda Spielman spoke wisely of the need for schools to be able to stick to their core business, and in our school we try to make sure that classroom teachers are able to do that as much as possible, but the surrounding investment that is needed to be put in to safeguarding, emotional support, educating parents, feeding students is not going to go away without more provision outside school.”

We have seen that for ourselves in Oxfordshire. Every single one of the children’s centres in my constituency was closed by the Conservative county council, and the more than 40 across Oxfordshire have fallen to just eight. We were able to help families in children’s centres, at an early stage, before there were problems. I have not even started to go on about youth services and youth provision and the issues there. All the wraparound services for young people have gone from the local community, and that leads to all sorts of issues. It is not just about social media—in fact, there is some evidence to show that a little bit of social media for teenagers is a good thing, although a lot is very definitely a bad thing. The debate often focuses too much on that point and less on the much more intractable issues that surround the child.

In conclusion, I believe that this is an issue of deep concern. Even on a day such as today, when the shenanigans of Parliament might make us forget that there are big issues in the country, this is one of the biggest issues we have, and I am concerned that the Government response is simply a sticking plaster. What they are not doing is looking at the core issues that are driving the problem. Unless they do that, they are always going to be playing catch-up; I am not convinced that the laudable aims in the White Paper are actually deliverable. We need to change the culture in schools. We need to stop the pressures on young people. I am grateful in advance for the contributions from other Members, because I am sure that I have missed many of those issues out of my speech.

It is time for change. I am so proud that my party has managed to take a massive step forward in our conference debates. The issue I had in my early years of teaching was under a Labour Government. That has happened again and has got much worse under a Conservative Government. I am not blaming anyone; we have reinforced bad practice across the political spectrum. It is time that we made it stop. This is our next generation and there is nothing more important than that.

14:52

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I commend the hon. Member for Oxford West and Abingdon (Layla Moran) for bringing the debate to Westminster Hall today, when there are many other pressing demands on our time, because this is an important matter. She rightly highlighted a number of the challenges facing young people in our schools. I draw attention to my declaration in the Register of Members’ Financial Interests; I am a doctor practising in mental health services and a member of the Royal College of Psychiatrists.

We need to analyse first why the problem is happening. Is it down to the increased challenges facing young people—the stresses and strains of exams and the need to perform in tests at schools, as the hon. Member for Oxford West and Abingdon outlined, and general increasing distress among young people—or is it also due to increasing awareness and recognition of mental ill health among young people, and the fact that more young people are therefore prepared to come forward because there is generally a greater recognition of their needs? Perhaps it is a combination of the two. We do not fully know or understand the reasons for greater pressures presenting in services, but they are happening. It is right that the Government are beginning to turn their mind to the issue and have put forward a number of initiatives.

I entirely agree with the hon. Member for Oxford West and Abingdon that, in addressing young people’s mental health, it is important that we do not over-medicalise issues such as teenage angst or normal patterns of growing up. It is important that we do not follow the American system, where—in my view and, I am sure, that of many psychiatrists in this country—a lot of young people are on medication without there necessarily being a good evidence base for that. We have to be very careful about over-medicalising problems, or medicalising problems too quickly, which is perhaps how we should look at it.

The Government are making strides in this area. They are rolling out training for every school and college to ensure that a designated mental health lead will be in place by 2025 and that there will be greater mental health awareness training for teaching staff. There has also been a lot of talk by some, including the Secretary of State for Health and Social Care, about the dangers of social media and its potential impact on young people’s mental health. However, as the hon. Member for Oxford West and Abingdon outlined, eye-catching announcements will do little to deliver the meaningful expansion and improvements in care that young people need and deserve. Although such announcements may make good media headlines, I am afraid the lack of provision on the ground for young people is the real problem. I know that it will be one that the Minister will want to work with colleagues in the Department of Health and Social Care to address.

I want to look at some areas of challenge. The coalition Government had a commendable focus on improving special educational needs provision. We know that a lot of children with special educational needs may also suffer from poor mental health. There is a correlation between some conditions that are associated with special educational needs and psychosis or other mental illness. However, far too often the joint care plans that should exist between the NHS and schools take a long time to come to fruition. Schools are far too often frustrated by the identification of a problem that they have recognised for which the NHS does not have the resources available to support the school in meeting the needs of the child in the way that was envisaged when those joint care plans were legislated for in this House. That speaks very much to the issue of lack of workforce, which the hon. Member for Oxford West and Abingdon outlined in her remarks.

[Dr David Drew (Stroud) (Lab/Co-op)]

That is no more evident than with the huge problem of eating disorders, where all the medical evidence shows that what is needed is early intervention. The NHS has got to get much more involved with schools on that. Does the hon. Gentleman agree?

[Dr Poulter]

Certainly, eating disorders are an area of great challenge. One of the difficulties is that very often young people present in great distress after their illness has taken hold for quite some time, and the prognosis can be less good in those situations. A lot of young people may have to travel many miles or even out of area to get the specialist care they need, and that does need to be addressed as a matter of urgency. I know that my right hon. Friend the Minister will be raising such issues with his counterparts in the Department of Health and Social Care, because a number of the answers to the challenges raised in this debate have greater priority, and there is greater understanding of what the challenges are in that Department rather than in his.

[Layla Moran]

Does the hon. Gentleman agree that it is not just about talking; it is active co-ordination between the two Departments that will solve this? If they end up working in silos, as we know Government Departments often do, none of this is going to work.

[Dr Poulter]

I completely agree, but it is also about breaking down the silos on the ground. It is all very well Government Departments coming together to work together and the silos being broken down—that did help between the Department of Health and the Department for Education on special educational needs under the coalition Government, but in reality the levers or mechanisms do not exist on the ground to deliver meaningful change for young people in the timely manner that was envisaged by the legislation passed in this House. We must make sure that whatever legislation is passed and whatever co-operation there is at Whitehall level translates into the right levers on the ground to deliver the co-ordinated and joined-up approach to more integrated care that young people need, across health, education, social services and other statutory services as may be required.

On the broader issue of child and adolescent mental health, a key challenge is the lack of workforce to deliver the care needed for young people. We know that the number of full-time mental health nurses has fallen by more than 6,000 between 2010 and March 2018, with a reduction of 1,832 learning disability nurses alone during that period. The number of CAMHS and learning disability consultant psychiatrists has slightly declined over the past decade. Many parts of the country, particularly outside London, are struggling to fill higher registrar training posts in CAMHS and learning disability psychiatry. That is a real problem, because without the workforce to deliver care we will not have the bodies on the ground to make a difference for young people.

Perhaps more concerning is the fact that the recent rhetoric on child and adolescent mental health still bears little resemblance to the reality facing many children and their families. Given the shrinking CAMHS and learning disability workforce, it is difficult to see how current levels of care can be maintained, let alone how the step change in mental healthcare provision for young people, which the hon. Member for Oxford West and Abingdon and I—and everybody taking part in this debate—would like to see, can take place.

The focus on healthcare apps and the talk of fines for social media companies are no substitute for having enough trained professionals on the ground to deliver frontline care to young people and their families. The NHS is far too often viewed through the prism of A&E. As a result, acute hospitals often receive a disproportionate level of funding compared with primary care and community services. In child and adolescent mental health services, as in other parts of the NHS, community services are often understaffed and poorly resourced. In fact, we are hearing about reductions in staff levels and not about the increase that the Government talk about as being desirable. My message to the Minister today is that we need more staff in child and adolescent mental health services, whether they are working in schools or in the community. Without those staff, all the media announcements and well-wishing announcements to improve in this area will come largely to nothing, and young people will still be struggling.

On the issue of fragmented commissioning, which the hon. Member for Oxford West and Abingdon raised, we see silos not just in Whitehall but on the ground. CAMHS, social services and education providers do not always work in a joined-up way. Although there can be some good initiatives at local level, and there are examples of good, co-operative working, there is nothing to compel the providers of different services to work in a joined-up way for the benefit of young people. Unless we get the commissioning of services right in providing better mental healthcare for young people, and actually compel joint working rather than just encourage it, we will not make a meaningful difference.

I know that the Minister will want to pick up some of these issues with his colleagues in the Department of Health and Social Care. Unless we have a joined-up approach that we can compel at local level, all the announcements on improvements in tackling young people’s mental health will come to very little. We will still be having these debates in this place in 10 years’ time—those young people will have lost 10 years of their life and will still be struggling.

I know that the Minister has a great commitment to all he has done on schools and in education. He has been a very good Minister, and I hope that he will redouble his efforts to get joined-up working and collaboration with the Department of Health and Social Care in addressing some of these problems.

15:04

[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I want to focus on my constituency in particular, and I will certainly echo comments made by hon. Members today. I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for securing today’s debate.

We have some real challenges in York. The severity of the challenges facing young people is the one thing that keeps me awake at night. There have certainly been challenges with funding and staffing, which I will refer to. We have a service that is seriously overstretched. We had 1,930 referrals to CAMHS in the past year, and we are seeing some of the challenges increasing in York. Young people in the city are very vulnerable, and research is being undertaken to ascertain what challenges they face—I am sure that the Minister will tell us about the results—but what is the school system doing to our young people?

One issue that has been raised is the narrowing of the curriculum. The perfectionism that is expected of our young people—and the exam methodology itself—is putting incredible strain on them. That has been seen particularly in our schools, but also in York College, where there has been a 23% increase in the number of young people with mental health challenges in the past year. At Askham Bryan College there has been a massive increase in the number of young people experiencing mental health challenges.

This challenge is very real. Much can be put back into the methodology that is used in the education system, which is why it is really important that in today’s debate we look at how that discussion can move forward. Transition points for young people between primary and secondary school, and between school and further or higher education, are places of vulnerability in our system. We need to ensure that we do not make just the educational connections; the health connections for those young people are essential for driving that forward and supporting them. We also need to address bullying in our school environments. Some 30% of children in York have experienced bullying in the past year, which is serious indeed.

I have read through the Vale of York clinical commissioning group’s “Transformation Plan for Children and Young People’s Emotional and Mental Health 2015-2020”, which has been revised due to the scale of the challenge in York to start to address some of the issues. Across the whole of York we have only six wellbeing members of staff in our schools. They might not be professionally trained in mental health, but they have had training in those roles—four are funded by the CCG and two by the schools—to address some of the low-level areas of mental health that children face. They have had more than 300 consultations with children over the past year and have made 36 referrals to CAMHS. As we have heard already, the threshold for accessing CAMHS is extraordinarily high. If a child has an eating disorder—sadly, York is one of the worst areas in the country for eating disorder services—they are often told that their BMI is too high for them to be able to access those services. We need to ensure that we make early interventions so that children do not become so poorly. Sadly, should they be refused at that point, then we have problems.

This service has been evaluated, and it is helping. Staff across our schools have gone through some training, which has helped them to deal with children who face mental health challenges, but there is so much more to do. Essentially, we need to look at health professionals being in place in our schools; we should not be relying more and more on our teaching staff to try to address many of these issues. Something that really disturbs me is the level of high risk that children have—it is generated particularly from trauma in their life—and the lack of wrap-around care and support services.

I was in a school on Friday, where I talked to the chief executive of York’s mental health services. I also had discussions with parents in my surgery about the level of self-harm that children are experiencing—including repeated suicide attempts in some cases—not having support workers, and the interventions around them being processed in a system, as opposed to putting the child at the heart of the equation. We need to change the system so that education and health services wrap around the child, as opposed to the child being in a process of services. That can be demonstrated where children have been discharged from acute care. They might not be poorly enough to be in acute care, but they have got real challenges that they try to deal with and they cannot see a way forward. The system as it works at the moment does not address that.

I want to mention the funding issue. York’s schools, as I have mentioned many times, are the worst funded in the country. That has an impact because schools cannot supply the additional support services required, as demonstrated by a school I visited on Friday. It therefore has an impact on the children’s wellbeing. We have to address the issue of school funding. Likewise, our health authority is one of the worst funded. The money that was given to the CCG to address mental health issues in our city has been used to clear the deficit. As a result, money is being pulled away from the partnerships that are so essential for addressing the wellbeing agenda. Money therefore matters in this equation. The Minister will need to answer my question one of these days about the challenges we face. Clearly the funding formulas are not working. They cut across multi-agencies and the demographics of our city. We are therefore being failed.

I want to mention briefly the national shortage of staffing. Although we can recruit for the medium and longer term, we must look at what we do in the short term. We need to look at overseas recruitment to try to fill some of the skills gaps with immediacy, because it takes time to address such issues. We also need to make sure that we have the right facilities in place. School is one location to have good mental health facilities for young people. Off the school campus is also important. We need to see that moving forward.

Our Labour group will propose a motion to our council next week highlighting the real challenges facing local authorities and the local area around mental health in our schools. Despite the number of debates that they and we have had, it seems that we go round and round in circles. In conclusion, would the Minister be willing to have a meeting with the mental health Minister and the Members who have participated in this debate to discuss the serious issues in our constituencies and to see whether we can find some real solutions between us?

15:12

[Jim Shannon (Strangford) (DUP)]

I am conscious of the time, Mr Stringer, so I will make sure colleagues have the same amount of time to speak as I have. First, I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for securing this debate. I spoke to her earlier today and decided to come and make a contribution from the Northern Ireland perspective.

School can either be the best or the worst days of your life—that’s a fact. I attended a boarding school for five years or so. Although I enjoyed it, I can remember having things thrown at me when, as a Christian, I prayed at the side of my bed. I remember such things very well. I was—and still am, or I probably would not survive in politics—of a disposition where I can let things slide off my skin, just as those items that used to be thrown at me bounced off. However, I am also aware, as both an elected representative and a father, that that is a particular gift, and that even the strongest person can be wounded by the words of a peer. I have three children and two grandchildren, so I am aware of the issues.

More than 1 million of our young people admit to being affected by bullying. We can be sure that for every person who speaks out, another is suffering in silence. I read an article in the Belfast Telegraph that outlined the latest figures from Childline. They revealed that the NSPCC supported service delivered 4,636 counselling sessions for loneliness in 2017-18—a 14% increase on the previous year. Of that total, 105 counselling sessions were carried out with children from Northern Ireland, up from 71 in the previous year. Across the UK, girls received almost 80% of sessions, with some pointing to the harmful effects of social media. Among the reasons they cited for their being made to feel increasingly isolated was watching people that they thought were friends socialise without them. Children are sensitive.

Our children are struggling in a world that is increasingly “nothing hidden and all show”. Although social media can be wonderful to connect people and perhaps spread positivity, I agree with Prince William and the Duchess of Cambridge in their campaign to address cyber-bullying. In June, Prince William launched the online “Stop, Speak, Support” code of conduct in a bid to tackle the problem. He spoke of the social media giants being “on the back foot” when it comes to tackling fake news, privacy and cyber-bullying. He said that technology firms

“still have a great deal to learn”

about their responsibilities, and he challenged them to fight harder against the poison that is spread online. I agree very much with what he said.

Increasingly, teachers report that much of the bullying now takes place outside the playground, in what should be the safety of one’s own home. However, that does not take away from the responsibility to promote good mental health and make help available in schools.

I spoke in the main Chamber last Thursday—the Minister was there to answer the debate—about the financial difficulties that schools are facing and the cuts that have been made, as a result of which all teachers are under more time pressure. It also means less time to build up relationships with students and to supervise their interactions. We are seeing the rise of pastoral teams from churches in some schools, which is a good thing as it emphasises to children that there is someone there for them to talk to. Sometimes they need someone to listen and possibly help.

The End Bullying Now campaign, run by the Northern Ireland Anti-Bullying Forum, has said there is a basic level of good practice that all schools must achieve. There are strategies that empower young people, parents, carers and practitioners to know what bullying is, what to do and how to stop it. There are strategies that demonstrate a reduction in incidents of bullying; strategies that demonstrate good intervention if and when bullying behaviours occur; a whole-school consultation, including school staff, parents, carers and pupils in the development of an anti-bullying practice—everyone has to be involved in it—and strategies that include integrating an anti-bullying ethos into relevant areas of the curriculum.

It is my belief that schools are attempting to play their part, but I must come back to the budget cuts that see a reduction in teaching staff, classroom assistants and all those in the frontline defence who are in the right place to tackle bullying.

Kids are under more pressure than ever to have the right look inside and outside of school: to have the top clothes, the latest tech and the perfectly angled selfie—a perfect face of make-up and a perfectly ripped body. The weight of those expectations is too heavy for any child to bear and we must have support in schools to address that. My belief is that it must come by means of additional funding and assistance for key support staff on site in school.

The stories of children who have taken their own lives before they have begun are heartbreaking. Every one of us, as elected representatives in close contact with their community, will be aware of such cases. I am aware of some cases. I declare an interest as a member of the board of governors at Glastry College, where there were children that I knew personally who took their life. Indeed, because of my age I knew them from the day they were born—that is a fact of life—and in those circumstances the reality hits home.

To a generation increasingly asked, “Are you fit enough—rich enough—pretty enough—bright enough—social enough?”, there must be people to say, “You are loved as you are. You have the opportunity to write a new chapter and change your ending tomorrow.” There is an onus on us, with the Minister here, to put that in place. Will we do it?

15:17

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Stringer. I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on securing this vital debate. The speed at which Members are speaking this afternoon and the interest shows that we could have spoken for at least three hours and still had more time and more interest. If it was not for what was going on in the other Chamber, even more colleagues would be here with us this afternoon.

There is much that I could reflect upon, but I particularly want to reflect on the Government’s Green Paper—their strategy, and their actual plan for young people’s mental health between now and 2030. The Green Paper was called “Transforming children and young people’s mental health provision”. That is the key intervention in which the Government set out their plans. It is important that we consider it in the context of this afternoon’s debate.

I agree with the hon. Member for Oxford West and Abingdon when she says that—let us not mince our words—we see a mental health crisis in our young people. I do not use those words lightly. We have only to reflect on the prevalence study that came out the other week, a repetition of the study that tells us how many young people are affected by one or more mental health conditions. We saw in that repeat of the study—last done in 2004—that there has been a 28% increase in the number of children affected. We used to use the statistic one in 10, or three in every classroom. It is now one in eight children, which for me is a very serious consideration. The Government need to urgently reflect upon and revisit their Green Paper, which was predicated on data that is now 14 years old. We now have the results that give us a reason to see the Government come forward with revised plans. Unfortunately, I do not believe that it is good enough.

I am a member of the Health and Social Care Committee; together with the Education Committee we produced a report on the Green Paper. We heard from expert witnesses, students in schools, and teachers. Many points reflected on the Government’s plans and set out what was missing, and what needs to be addressed to make a real difference. There are many points that I could reflect on, but I want to focus my remarks on the most salient points. I urge Members, but particularly the Minister, to reflect on the joint Select Committee report, because it contains many recommendations. It is fair to say that we were disappointed by the Government’s response, which did not adequately respond to serious concerns raised by many people throughout the country.

When I reflect on the experience of young people in my constituency, I am aware that a previously exemplary service in which young people were seen within three weeks—from referral to assessment and then treatment—now has hundreds waiting 24 weeks just for an assessment. That is not good enough. A special educational needs teacher, who wrote to me previously, came to my constituency surgery on Friday and said that the threshold to get access to services is now even further out of reach, even for children under 11. There are children aged four who cannot get access to any services. That is not peculiar to Liverpool; it is replicated across the country. We had a 43% cut to our service, and not in just one year—it was repeated in the second year; that was the main service for young people. Thresholds for access to care are rising, and I reiterate the point that children have had to self-harm or attempt suicide to get in. That is not good enough.

Colleagues have touched on the issue of resources. It is not just about money, but let us be honest: some resources are needed to ensure that children are properly supported. Schools are an important place. I want to reiterate what I said when I asked the Minister a question in the Select Committee. It is an important point, and gets to the crux of the matter. My greatest concern about the Green Paper and the Government’s plans for now until 2030 is that they will only replace what has already been lost, because the Government have no idea—no assessment has been done—how many peer mentors, counsellors, educational psychologists, pastoral care workers and school nurses have been lost from the country’s schools. Those are just some of the roles—vital services—that schools that are passionate about students’ mental health no longer have the funds to invest in. Schools in my constituency had access to a service called Seedlings. It was pulled from all those schools. The only ones that could afford it were those that met a threshold of a certain number of children on free school meals, in relation to pupil premium. Those just below the threshold could no longer afford it.

Those cuts have combined with other cuts, not just in schools but in local authorities. They affect children’s centres, the educational psychologists previously funded by local authorities, Sure Start centres and youth centres—because it is not only what happens in school that is relevant, but what happens afterwards. Many young people would turn to youth workers as a trusted adult if their mental health was suffering. The combination of all those things is the toxic situation we are in. Young people are now seen only when they are in a crisis; the system is geared only to what we do then. We need proper early intervention and prevention, to keep young people well. Schools cannot be expected to do it all.

From the teachers’ representations that we heard in evidence, it was clear that they want to do everything possible to support students in the classroom, but many demands are made on them and the current academic system adds many pressures, not only for students but for teachers. A staggering 81% of teachers say that they have considered leaving teaching in the past year because of the pressures of their workload. The combination of those factors means that there is every reason to think it is not good enough to expect every school to have just one designated mental health lead—one teacher who is trained for two days—when the Government accept, in their own evaluation, that that arrangement has an opportunity cost, in taking those teachers away from other activities that they are expected to do in school.

The social media issue is something that the Government definitely need to address, but even if we removed all the challenges of social media we would not solve the problem because, judging by the evidence that we heard, there are so many other challenges, but particularly issues to do with the social determinants of health and poverty.

I shall draw my remarks to a close because other Members want to speak. We cannot expect our schools to do it all. Young people are really suffering; this is a crisis, with a 28% increase in the figures, even going by those that came out the other week. I urgently request that the Government look again at the Green Paper strategy, because it is simply not good enough.

15:24

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate my hon. Friend the Member for Oxford West and Abingdon (Layla Moran) on securing this vital debate.

Early intervention and preventive work on mental health are massively important and schools play a colossal part in it. Fifty per cent. of mental health problems in adult life take root before the age of 14; 10% of schoolchildren today have a diagnosable mental illness, which means that in an average class of 30 young people three will be living with a mental health condition. That is three children in every class. Stress about exams, fear of failure, concern about body image, bullying, and the crushing weight of the aspirations and expectations of materialism have a huge impact on people’s mental health. Unchecked, those concerns can spiral into acute long-term mental illnesses that will lead to serious problems all the way through adulthood.

The Prime Minister characterised the colossal failure to treat mental health conditions as a “burning injustice”, but that is an injustice that the Government have failed to fight in practice. There are few things more frustrating than a Government who speak the right political language in a debate but fail to deliver. Investment in preventive measures and early intervention has only got worse in recent years. Councils’ public health budgets, which include funding for school nurses and tier 1 mental health services, have been reduced by £600 million between 2015 and the present. In my constituency central Government cuts to the public health budget mean that the NHS in Cumbria currently spends only £75,000 a year on tier 1 mental health preventive care. That is just 75p per child per year. In 2015 the coalition Government agreed to allocate Cumbria £25 million a year in public health money. Now it gets only £18 million a year. That is a £7 million cut—a huge proportion. It is not just unacceptable; it is an insult. As a direct result, we no longer have any school nurses directly attached to schools anywhere in the county.

Alongside the situation I have described, there are additional pressures. Many young people with special and additional needs are at greater risk of acquiring mental health difficulties. We have a special educational needs funding system that punishes schools that take children with additional needs and rewards those that do not fulfil their responsibility; so the system compounds the difficulties. Like the rest of the hon. Members present, I get letters in my postbag about many issues of great emotional significance. They weigh heavily on all MPs as we seek to help people out of difficult situations. However, nothing keeps me awake at night like the plight of young people with mental health conditions. I have noticed in recent years that the volume of my case load taken up by that issue has rocketed. We are clearly a society that breeds poor mental health.

I am proud of the young people in Cumbria with whom I have worked and who are determined to fight for better mental health provision for themselves and their friends. In my constituency, for example, CAMHS was not available at the weekend or after school hours in south Cumbria until our community ran a campaign and forced local health bosses to change that. What an outrage that we had to fight for those changes. Alongside a focus on the provision of timely, top-quality treatment, there needs to be a focus on preventive care. That is why 2,500 mostly young people in my constituency signed the petition that I shall soon present to the House, calling for a mental health worker to be allocated to every school in Cumbria, so that we can manage to prevent problems before they arise and get out of control.

Perhaps the biggest single issue affecting young people’s mental health is eating disorders. In South Lakeland, three quarters of children reporting with an eating disorder are not seen within the target time of a month. Not a single one of those children presenting with an urgent need is seen within the target time of one week. The most appalling aspect of the situation is not just those statistics but the fact that the number of children they represent is 15 in a year. That is utter nonsense. I deal with at least one new eating disorder case among young people every single week in my constituency. Children are clearly slipping through the loopholes and are not being pushed into the system. As the hon. Member for York Central (Rachael Maskell) said, they are told that they have to come back when they are more sick as they have not yet lost sufficient weight to enter the system. That is an outrage. In 2016, the Government promised Cumbria a specialist one-to-one eating disorder service, and it has failed to materialise. Wonderful people work in CAMHS, but they do not have the support that they desperately need. As others have said, young people’s mental health is the crisis of our age. It needs more than platitudes; it needs real action, and it needs it now.

15:30

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on securing this very important debate. I will not run through all hon. Members’ contributions because we are running very short of time, but I have a few words to say. The hon. Lady’s knowledge and breadth of experience shone through her contribution, and her clinical dissection of the high stakes in the school system was informative and chilling.

As a member of the Education Committee, I am aware that the UK Government are not responsible for education matters in Scotland, Wales or Northern Ireland, but that does not mean that I or anybody else in the House have no desire to improve the mental health and wellbeing of children right across the UK. Schools are on the frontline of supporting children and young people’s mental wellbeing. We can shift the focus on to preventing mental health problems and building resilience through simple methods. In one of my granddaughter’s schools, children are being taught to think not, “I can’t do this,” but, “I cannot do this yet.” That is a huge step forward. It was never done in schools in my and my children’s time.

Increasing the availability of learning tools and experiences in health and wellbeing ensures that children and young develop knowledge about mental health and understand the skills, capabilities and attributes that they need for mental, emotional, social and physical wellbeing now and in the future. The Scottish Government’s mental health strategy focuses on early intervention and prevention, which feeds into this issue.

Over the course of their education, children spend more than 7,800 hours in school. Emotional wellbeing is a clear indicator of academic achievement, success and satisfaction in later life. Combining mental health awareness and coping mechanisms is critical for prolonged resilience. The Scottish Government have spent quite a bit of money recently. I spoke to Clare Haughey MSP, the Minister for Mental Health, who had recently taken on the recommendations of the “Children and young people’s mental health audit” report, which was produced by the Auditor General and given to the Public Audit Committee on 22 September.

It is important that we do not just throw money at these problems. There has to be a change in attitude. Money helps by making counselling available. In Scotland, our hope is that £20 million will provide 250 additional school nurses, and that £60 million will provide 350 counsellors. There will be other counsellors in further and higher education.

In Scotland, we are also doing mental health first aid programmes for teachers so that the early signs of mental health problems are spotted and children can be moved forward into services. In the package of money given by the Scottish Government, there is also provision for community support. The Scottish Government have set up a Mental Health Youth Commission, which is working with the Scottish Association for Mental Health and Young Scot to put young people’s issues front and centre. The Scottish National party Government are committed to meeting their commitments to ensure all children are given the tools they need to achieve a happy and prosperous life.

The UK has signed up to the UN convention on the rights of the child, but has stopped short of making it part of its legislation. That has been done in Wales, and the First Minister of Scotland is committed to making it part of domestic law in Scotland. Article 19 of the UNCRC says:

“State Parties shall take all appropriate legislative, administrative, social and educational measures to protect the child from all forms of physical or mental violence”.

The First Minister’s commitment will better enable positive mental health and wellbeing practice in Scottish schools.

Will the updated guidance, which is intended to come into force in September 2020, apply in academies and free schools, as well as local authority-maintained schools? It is my understanding that those types of school do not have to follow national school curriculums.

[The Minister for School Standards (Nick Gibb)]

We have changed the basic curriculum, rather than the national curriculum, to ensure that it applies to academies as well as local authority-maintained schools.

[Marion Fellows]

I am very grateful to the Minister for that response.

It is necessary that children across the UK are able to access timely and helpful support when they need it.

15:36

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for securing this important debate on mental health and wellbeing in schools, and other hon. Members who have made valuable contributions.

Despite all the warm rhetoric about this issue, the reality is that, when it comes to real action and real change to children and young people’s mental health, the Government are failing children and setting them up for future struggles. Schools are integral to the mental wellbeing of children and young people. They are where a lot of children spend a large majority of their time. For children for whom home is not a good place to be, or is a cause of distress, it can be the only safe, consistent element of their lives.

Last December’s Green Paper, “Transforming children and young people’s mental health provision”, seemed to signal, at last, a joined-up approach and a commitment between the Department of Health and Social Care and the Department for Education to address the crisis in children and young people’s mental health. As the report of the Education and Health Committees said, the Government’s strategy lacks ambition. The Committees said that it was narrow in scope and would put significant pressure on the teaching workforce. The report was entitled “Failing a generation”.

Sadly, just weeks ago, the NHS “Mental Health of Children and Young People in England” survey, referred to by my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), who has long been a champion of improving mental health provision across the board, confirmed the failing of that generation. It found that one in eight five to 19-year-olds had at least one mental health disorder. That means that, in an average classroom, almost four pupils will be suffering. The Royal College of Psychiatrists estimates that that equates to about 1.23 million children and young people. The survey also found that 400,000 children and young people identified as being in need of support were not getting any whatever.

The proposed mental health support teams for schools have been heavily criticised, including by Barnardo’s, which accused the Government of

“sleep-walking into the deepening crisis in children’s mental health.”

As they stand, the plans are piecemeal and will serve only to deepen the existing postcode lottery. It is anticipated that just 20% to 25% will benefit from the support by 2022-23. I would appreciate it if the Minister explained to us how recruitment for the teams is going, what the arrangements for the designated mental health leads in schools are, where the first set of trailblazers are, and what the rationale was for choosing those trailblazer areas.

Furthermore, the teams will be for mild to moderate mental health issues. What happens to children who desperately need intervention from child and adolescent mental health services and specialist trauma-based support, such as the children my hon. Friend the Member for York Central (Rachael Maskell) referred to who are suffering from eating disorders and suicidal thoughts?

What about children looked after in kinship care, care leavers and child refugees? The Children’s Commissioner noted that only 104,000 of more than 338,000 children referred to CAMHS in 2017 received treatment in that year. That should come as no surprise to the Minister, when we know that the number of doctors working in child and adolescent psychiatry has fallen in every single month this year; that less than 1% of the NHS budget is spent on children’s mental health; and that CAMHS funding was cut in each of the four years following 2010.

Underfunding and the stripping back of provision in the name of austerity have led to a crisis in our schools, where £2.7 billion of budget cuts, an overriding focus on competition instead of collaboration, and fragmentation and marketisation of education, have left gaping holes in accountability, provision and support. In that environment, it is little wonder that children are not getting the support that they need.

The situation is far worse than that because, as we have already heard, on schools, the Government are acting in a manner that exacerbates poor mental health in children and young people. The Minister has said on the record:

“we do not want children to be under pressure with exams”,

and stated that nothing that his Department has done makes things worse. Yet children are being placed under unbearable pressure because of the high-stakes exam culture fostered by the Government, resulting in feelings of chronic low self-esteem and stress.

In a study commissioned by YoungMinds earlier this year, 82% of teachers said that the focus on exams had become disproportionate to the overall wellbeing of their students. Similar concerns have been raised by the Education Committee, while some headteachers said that their students had attempted suicide over exam pressures. Now that we have evidence, what will the Minister do to change that approach?

For children with special educational needs and disabilities, those feelings of low self-esteem are amplified. I know from my own experience of having dyspraxia that I suffered from low self-esteem and confidence and, as a result, I would often isolate myself. I cannot imagine how much more difficult it must be for the thousands of children with special educational needs who are missing out on support.

Today, the chief inspector of schools revealed the national scandal of 4,000 children with official education, health and care plans receiving literally no support at all. She also raised serious concerns about the children missing from the education system altogether. The Government have created an environment in which, to improve exam results and league table ratings, off-rolling and illegal exclusions are used at whim to such a degree that today, the chief inspector’s report identified a possibly 10,000 children who cannot be accounted for. As the Education Committee’s report noted:

“young people excluded from school or in alternative provision are…more likely to have a social, emotional and mental health need”.

Can the Minister explain what provision—beyond the review of alternative provision that is progress—is being made for those missing children, and when that review will be concluded?

Children now grapple with a range of issues that we in this Chamber did not face at their age, in particular the all-pervasive nature of social media, where bullying, abuse and grooming are no longer confined to the physical space. Some young people cannot escape and have no respite from the harm they endure online. I was pleased that, in the passage of the Children and Social Work Act 2017, the Government bowed to pressure, but I would urge them to get moving on Personal, Social, Health and Economic education. A wealth of evidence suggests that it improves children’s resilience, wellbeing and safety, both online and offline.

In my former career, I saw the heartache and pain that delayed support and help could cause children, their families, their carers, and those who work with them, both in and out of the school environment; teenagers who regularly cut themselves or make attempts on their own lives because they were victims of child sexual exploitation; little boys and girls who had been so severely abused and neglected that they gouged out their own skin and spent their lessons rocking back and forth in an attempt to self-soothe; and children who had fled warzones, who were stoic and motionless in the playground and completely unable to interact with their peers.

As we discuss these matters, teachers, wider school staff, social workers, mental health workers, parents and carers will all be trying their absolute best for those children in the face of the worst cocktail of cuts—coupled with regressive policies—from the Government, right across the board. Those people, and the children and young people that they are fighting for, need to know what the Minister will do to halt that crisis now. I hope that he will not disappoint us all in his response.

[Graham Stringer (in the Chair)]

Although we are a little ahead of schedule, before I call the Minister, I ask him to leave a minute or two at the end for the hon. Member for Oxford West and Abingdon (Layla Moran) to sum up.

15:45

[The Minister for School Standards (Nick Gibb)]

Certainly, and thank you, Mr Stringer; it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Oxford West and Abingdon (Layla Moran) on securing the debate and introducing it so well.

Mental health can have a profound impact on the whole of a child’s life; it is not just about the effect that poor mental health can have on their attainment at school. We worry about the whole life ahead of them. Improving mental health starts with promoting good mental wellbeing and ensuring that children and young people have the help and support that they need. Schools can play an important role with the right support from specialist services, which is why the Government have made mental health a priority, with a shared approach between the Department for Education and the Department of Health and Social Care.

The hon. Members for Oxford West and Abingdon and for South Shields (Mrs Lewell-Buck) mentioned exam stress in schools. Tests and exams have always been times of heightened emotions for pupils and teachers, but they are not meant to cause stress and anxiety. As the hon. Member for South Shields acknowledged, I have said on many occasions that schools should encourage all pupils to work hard and achieve well, but that should not come at the expense of their wellbeing. Schools should provide continuous and appropriate support as part of a whole school approach to supporting the wellbeing and resilience of pupils.

The hon. Member for Oxford West and Abingdon also mentioned GCSEs. We have reformed GCSEs to match the expected standards in countries with high-performing education systems, so that young people have the knowledge that they need to prepare them for future success and the skills that Britain needs to be fit for the future. We are determined to ensure that no child has an inadequate education that reduces their life chances; we want to ensure that every child has an education that helps them to fulfil their potential. That is the key driver of all of our education reforms since 2010. Better education means better prospects of quality employment and better health outcomes for those young people in the long run.

As a psychiatrist, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) brings serious expertise to the debate. He said that it was important that Departments did not work in siloes. I can assure him that I worked very closely with the Under-Secretary of State for Health and Social Care, the hon. Member for Thurrock (Jackie Doyle-Price), in whose portfolio mental health resides. We worked particularly closely on producing the Green Paper on children and young people’s mental health.

We know that mental health is also a priority for teachers, because of the challenges that many children face in the modern world; a fact that has been referred to by other hon. Members. To get an up-to-date picture of children’s mental health, this Government commissioned the first national survey of children and young people’s mental health since 2004, which was cited by the hon. Member for Westmorland and Lonsdale (Tim Farron). The results published last month show that in 2017, 11.2% of children and young people aged five to 15 in England had a diagnosable mental health disorder. That figure stood at 10.1% in 2004, so the latest results show that there has been a slight increase since then. They reinforce what we have heard from schools and colleges about how many children face issues and about the need to act. We have listened to what schools have told us and are already taking steps to help schools to support children and young people with mental health problems. The findings of the survey will help us to ensure that the action that we take is informed by the most up-to-date evidence.

I understand the important points made by my hon. Friend the Member for Central Suffolk and North Ipswich about the number of staff in children and young people’s mental health services. The Government are already taking significant steps to improve specialist children and young people’s mental health services with £1.4 billion of funding to ensure that an extra 70,000 children a year receive the support that they need by 2020-21.

We recognise, however, that we need to do more, which is why the NHS will invest at least £2 billion a year more in mental health, including children’s services, under the recently announced Budget proposals, increasing NHS funding by an astonishing £20.5 billion a year in real terms by 2023-24. As I said, from that the NHS will allocate £2 billion a year to mental health services. The Budget also included a commitment to set up specialist NHS crisis teams for children and younger people in every part of the country.

[Dr Poulter]

The extra money is of course welcome, but the focus on crisis intervention is perhaps wrong. We should try to stop children getting to that point in the first place, and invest more in early intervention and community teams. In order to do that, we need to reverse the decline in the mental health workforce. I wonder whether that is an issue the Minister will raise in particular, challenging his counterpart in the Department of Health and Social Care on how to improve recruitment and retention of CAMHS professionals.

[Nick Gibb]

My hon. Friend makes a crucial point, which I will come to when I talk about the mental health Green Paper. It is absolutely crucial that we are able to devote resources and expertise to intervening early, before a child’s mental health problem escalates into something requiring medical intervention.

[Luciana Berger]

Will the Minister give way?

[Nick Gibb]

I will, but this will be the last intervention, I am afraid.

[Luciana Berger]

What percentage of that £2 billion extra for mental health services will go to young people’s mental health services? To what extent will it replace—I asked this question before—services that have already been lost, not just from the NHS but from right across education in schools throughout the country?

[Nick Gibb]

I have already mentioned that £1.4 billion will be put into young people’s mental health services. I do not have the precise figure that the hon. Lady asks for, but I am happy to write to her with it. I suspect that it will not have been determined precisely at this point, but our plan is to increase that spending, and we can only get to that through careful marshalling of our economy, because our economy of course produces the wealth that enables us to provide such a level of funding.

In the debate, there was a reference to eating disorders. The Government are on track to meet, or are exceeding, waiting-time standards for eating disorder services and early intervention in psychosis.

[Dr Drew]

Will the Minister give way?

[Nick Gibb]

I will not give way now, because we only have a few minutes left. I have already given way a number of times.

Schools have an important role to play in supporting the mental health and wellbeing of their pupils by putting in place whole-school approaches tailored to the particular needs of those pupils. Our 2017 survey, “Supporting Mental Health in Schools and Colleges”, was commissioned to derive robust national estimates on activities to promote and support mental health and wellbeing. It found that about half of schools and colleges already had a dedicated lead for mental health in place, that 61% of schools offered counselling and that 90% of schools and colleges offered staff training on supporting pupils’ mental health and wellbeing.

The Government are committed to supporting schools and colleges to do more to promote good mental wellbeing in children, to provide a supportive environment for those experiencing problems and to secure access to more specialist help for those who need it. To support schools to build the capability to identify and promote awareness of mental health needs, we have committed to introduce mental health first aid and awareness training for teachers in every primary and secondary school by the end of the Parliament. To date, we have trained more than 1,300 staff in more than 1,000 schools.

[Mrs Lewell-Buck]

Will the Minister give way?

[Nick Gibb]

I will not give way. I am sorry, but I want to leave time for the hon. Member for Oxford West and Abingdon to respond to the debate.

We have recently published updated guidance to help schools to identify pupils whose mental health problems manifest themselves in their behaviour, and to understand when and how to put in place support.

The hon. Member for South Shields raised the issue of PSHE. As part of an integrated, whole-school approach to the teaching and promotion of health and wellbeing, we are making health education compulsory for pupils receiving primary and secondary education, alongside relationship and sex education in all secondary schools—

[Mrs Lewell-Buck]

When?

[Nick Gibb]

All pupils will be taught about mental health, covering content such as understanding emotions, identifying when someone is experiencing signs of poor mental health, simple self-care, and how and when to seek support.

The hon. Lady asked when health education would be made compulsory. We have already published draft guidance and consulted on it—the consultation closed on 7 November. It was well received, and 11,000 pieces of evidence were supplied to it. We will respond in due course. Our plan is to roll out the subject as compulsory in the academic year beginning in 2020. We hope for and expect early adopters from September 2019, but it will be compulsory a year later. We want to ensure that all schools have a proper lead team so that they can implement the policy as well as they can.

On the mental health Green Paper, while schools have an important role to play, teachers are not mental health professionals and they should not be expected to act as such. When more serious problems occur, schools should expect pupils and their family to be able to access support from specialist children and young people’s mental health services, voluntary organisations and local GPs. The £1.4 billion that we have already made available will play a significant role, but we want to do more and to provide a new service to link schools to mental health services more effectively, with swiftly available and clinically supervised support.

To enable that, our Green Paper set out proposals to support local areas to adopt an ambitious new collaborative approach. The cornerstone will be new mental health support teams to improve collaboration between schools and specialist services. We expect a workforce numbering in the thousands to be recruited over the next five years to form such teams. They will be trained to offer evidence-based interventions for those with mild to moderate mental health needs. The teams will be linked to groups of schools and colleges, and the staff will be supervised by clinicians. They will work closely with other professionals such as educational psychologists, school nurses, counsellors and social workers to assess and refer children for other specialist treatments, if necessary.

[Mrs Lewell-Buck]

Will the Minister give way?

[Nick Gibb]

I will not give way because, literally, there are only three minutes to go.

The roll-out of the teams will start with about 25 trailblazer sites, each with at least two teams, to be operational by the end of 2019. The first trailblazer areas will be announced imminently. They will test and evaluate a range of ways to set up and run the new mental health support teams to see what works. The overall ambition is for national roll-out of the teams, to be informed by evaluation of the trailblazers. The detail will be considered further as the long-term plan for the NHS is developed.

We also want to ensure that we have a designated senior lead for mental health in every school to oversee the delivery of whole-school approaches to promoting better mental health and wellbeing. The Department will provide up to £95 million to cover the cost of significant training for senior mental health leads. It is an ambitious programme, and I am optimistic that it will help to deal with a number of mental health problems that are emerging among young people in today’s society.

Good mental health remains a priority for the Government. It can have a profound impact on the whole of a child’s life, not just on attainment. We want all our children to fulfil their potential, and we want to tackle the injustice of mental health problems so that future generations can develop into confident adults equipped to go as far as their talents will take them.

15:58

[Layla Moran]

I thank the Minister for his response. I am sure that many people out there will be heartened to hear that students should not be feeling the stress of exams, but the fact is that they do. It is also a fact that the stress is definitely worse even than when I started teaching, which is well over 10 years ago. It is a shame that the Government will not take responsibility for the part that they have played in creating that culture.

I thank all Members for their contributions to the debate. I am sorry that there is not time to go through them all individually, but there was a range of expertise and the constituency stories that we heard were not only heartbreaking but heartening, because we know that there are people in this place who care.

I also put on the record my thanks to Oxfordshire Mind, the university’s Oxford Mindfulness Centre, Oxford Mental Health Campaigners for Change and a host of other national bodies that contacted me about the debate. Finally, I thank all members of the public who wrote in in such large numbers. I promise that the Liberal Democrats and I—in my role as the education spokesperson for my party—will continue to bang the drum for putting children’s mental health wellbeing at the heart of everything that we do in this place.

Motion lapsed (Standing Order No. 10(6)).

Animal Rescue Centres

Tuesday 4th December 2018 Westminster Hall

[Mr Philip Hollobone in the Chair]

15:00

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

I beg to move,

That this House has considered animal rescue centres.

It is a pleasure to serve under your chairmanship, Mr Hollobone. Having lost two thirds of my first minute, I am pleased that my speech will go on for only 12 minutes, so I should be able to accommodate one or two colleagues who have indicated that they might wish to intervene. I am grateful for the opportunity to raise this issue. I thank the Royal Society for the Prevention of Cruelty to Animals, Dogs Trust, Battersea Dogs & Cats Home and Blue Cross for their briefings, and Richard Mitchell in my office for pulling them all together. I am pleased to see the Minister in his place.

This is a relatively simple issue: animal cruelty is wrong, we recognise that in our laws, and there are penalties for those who break those laws. But there is an ongoing debate in Government about whether those laws need strengthening. There seems to be a consensus across most animal welfare organisations, which have long campaigned for increased sentences for animal cruelty and are working to change legislation, to increase the maximum sentence from six months to five years’ imprisonment. Some 250,000 pets who have been badly treated, abused or abandoned enter their centres every year, yet the custodial penalty of six months on conviction is the lowest custodial penalty in 100 jurisdictions across four continents.

[Sir Greg Knight (East Yorkshire) (Con)]

Does the hon. Gentleman accept that the consensus on the need for change reaches this side of the House too? Does he agree that there is a good case for setting up an animal abuse register, so that those who abuse animals can be tracked down and prevented from keeping animals in future?

[Jim Fitzpatrick]

I very much take the right hon. Gentleman’s point that this is not a party political issue. Indeed, most of my comments do not attack the Government but commend them for the comments and proposals they have made. However, we need to move on. He makes an interesting suggestion, and perhaps the Minister will respond to it.

Animal cruelty offenders are five times more likely to have a violent crime record. Welfare organisations were pleased when the Government issued the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill in December 2018. Those organisations have long argued that several of the activities covered by the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018 were in serious need of review.

[Jo Platt (Leigh) (Lab/Co-op)]

I am sure that my hon. Friend shares my concern that there is no statutory regulation of animal rescue centres in the UK. Since local authorities do not collect that information, I submitted a freedom of information request to every local authority in England and found that only 18% of rescue homes are regulated, through their membership of the Association of Dogs and Cats Homes. Does he agree that is extremely concerning, and does he welcome the efforts of the RSPCA, Dogs Trust and others to implement statutory regulations?

[Jim Fitzpatrick]

My hon. Friend has been assiduous on this issue. I will move on to the ADCH later on and will recognise the work of the RSPCA and others.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing forward a good issue for us to debate in Westminster Hall, as he always does. I told him earlier that my wife is a volunteer at Assisi Animal Sanctuary. There are many organisations across the United Kingdom of Great Britain and Northern Ireland that do exceptional work and are regularly monitored. Assisi is one of those, as is the RSPCA, PAWS and Dogs Trust—there are some good examples. Does he think that the Government should perhaps look at the good examples when bringing together the legislation?

[Jim Fitzpatrick]

I congratulate the hon. Gentleman’s wife on her work. I mentioned four of the main organisations, but there are many across the country working in this field and I pay tribute to them all; they do fantastic work and we appreciate it.

The 2018 regulations refresh the licensing regime for: selling animals as pets; dog breeding; boarding kennels; boarding for cats; home boarding for dogs; day care for dogs—regulated for the first time—hiring horses; and keeping animals for exhibition.

[Chris Evans (Islwyn) (Lab/Co-op)]

Next week I will visit Battersea Dogs & Cats Home, as I do nearly every Christmas, to look at the fantastic work it does. Does my hon. Friend agree that there should be an onus on breeders? When dogs have breeding problems, often the rescue centres or the adopting families have to sort them out. Once the breeders have sold the dogs, the unscrupulous ones will forget about that dog even if it has a breeding problem. Does my hon. Friend believe that breeders have a responsibility?

[Jim Fitzpatrick]

My hon. Friend makes a relevant and eloquent point. I can add to his criticism of unscrupulous breeders. That problem needs to be addressed.

The 2018 regulations do not address the regulation of rescue centres. The RSPCA has issued a position statement on licensing animal rescue and rehoming centres. It believes that the Government should introduce licensing of animal rescue and rehoming centres under the 2018 regulations. It feels that would close a legal loophole as well as drive up standards and allow for enforcement. Usefully, there are standards already in existence that would assist with licensing and reduce the burden on local authorities.

It is important to get the definition of an animal sanctuary or rescue or rehoming centre right, to ensure the correct establishments are captured by any new law. Blue Cross comments that there is a growing trend for the establishment of “rescue centres” to import dogs from abroad to sell on to members of the public—not genuine rescue centres as we would understand them.

[David Simpson (Upper Bann) (DUP)]

The hon. Gentleman is a former colleague from the Environment, Food and Rural Affairs Committee, where we have raised this issue many times. Northern Ireland has different legislation—we toughened our legislation over the past few years. Does he agree that stiffer penalties need to be introduced for those found using dogs for dog fighting and gambling?

[Jim Fitzpatrick]

The hon. Gentleman raises a serious point. The Select Committee on which we served—he is still a distinguished member—has looked at the issue, which is troubling for welfare organisations and needs Government attention.

The RSPCA believes that all rescue and rehoming centres and sanctuaries should be licensed under the animal regulations, first, to close the loophole in the third-party ban on sales and prevent third-party sellers from setting up as animal rescue centres. Secondly, it would improve the welfare of animals kept in such establishments by creating a legislative structure that drives improvements and standards of keeping and allows the enforcement of such standards. Thirdly, standards already exist that would assist licensing to reduce the burden on local authorities.

The RSPCA also believes there is a risk that third-party sellers could become rescue centres, to evade the ban on third-party sales, so it would welcome the licensing of rescue centres and sanctuaries. Indeed, some pet shops already have a charitable arm, such as Pets at Home, which has the Support Adoption for Pets operation that sells animals that have been abandoned and rescued, such as rabbits, to rescue organisations or gives them back to Pets at Home.

The RSPCA stresses that if a charity’s aims are generic and those aims are—on the face of it—being followed, the Charity Commission could be limited in the actions it could take, even if the organisation is a front that was set up to avoid the third-party ban. It argues that licensing rescue centres would close that loophole. Specialist knowledge is required to operate an animal sanctuary or rescue or rehoming centre, in terms of management and administrative skills as well as expertise in caring for animals. All sanctuaries should be required to obtain a licence to carry on such activities. The RSPCA does not believe that there should be a size or animal number threshold below which establishments should be excluded from licensing. Organisations and individuals operating as rescue centres can, despite their laudable original aims, become overwhelmed and struggle to meet welfare standards.

The RSPCA undertakes around 85% of enforcement action deriving from the Animal Welfare Act 2006. As well as the standards coming into force as part of the 2018 regulations, ADCH, which my hon. Friend the Member for Leigh (Jo Platt) mentioned, has a code of practice, which sets standards of animal care. That may be a good basis for the licensing of rescue and rehoming centres, and may aid local authorities to enforce any licensing regime.

ADCH has 132 members in eight countries. The majority—more than 80—are located in England. ADCH, which is 33 years old, has had enforceable standards since 2015. Those standards, which are both self-audited and externally audited, cover the management and governance of a centre, as well as the health and welfare of the cats and dogs in it and transported to it. However, membership of ADCH is voluntary, so rehoming organisations and animal sanctuaries are not required to adhere to the code of practice unless they choose to become a member and meet those requirements.

Although self-regulation is an important step in the right direction, formal regulation is required to ensure that all establishments, as opposed to just those that want to, meet suitable levels of animal welfare. One possibility is for ADCH members that apply and are audited against the ADCH standards to be defined as low risk in a licensing regime.

The RSPCA understands that discussions are under way in Scotland and Wales about improving standards in sanctuaries and in rescue and rehoming centres, and, in Scotland, about introducing a licensing system. In Wales, a definition of places called “animal welfare establishments” has been proposed for the Government to consider, based on discussions with the Department for Environment, Food and Rural Affairs.

The Dogs Trust has also weighed in. It points out that there is currently no legislation in place, so anyone can set themselves up as a rehoming organisation or sanctuary. Furthermore, there is little proactively to safeguard the animals involved, as local authorities are not required to inspect those premises, so they do not do so. It adds that poor welfare can have a knock-on effect when an animal is rehomed.

[Chris Elmore (Ogmore) (Lab)]

My hon. Friend is making an impassioned speech about why we need better regulation. The Hope sanctuary in Llanharan is in my constituency, where the local authority simply does not have the money or the capacity to check licences. That is part of a wider cuts agenda in local government. Does he agree that, in some cases, these services are there to try to support local government because it no longer has the capacity to protect animals?

[Jim Fitzpatrick]

My hon. Friend has much better knowledge of his local centre than I do, and the fact that he is concerned about it concerns me. I am glad that he called my speech impassioned—I am actually hastening to try to get through it, having taken a number of interventions. I hope to get to the end, and I hope the Minister understands that I may run over by a few minutes.

Dogs Trust calls on the Government to address the lack of regulation of the rehoming sector as a means of protecting our nation’s animals and creating transparency in the industry. It wants the Government to regulate all rehoming organisations and animal sanctuaries through a system of registration and licensing. It also recommends that the Government should develop an independent, centrally accessible team of appropriately trained inspectors that can be utilised by all local authorities to inspect animal establishments—not only rehoming centres and sanctuaries, but those involved in activities such as boarding, breeding and selling.

The Pet Advertising Advisory Group, which is chaired by Dogs Trust, also operates a system of self-regulation for online adverts offering pets for sale. Owing to its voluntary nature, PAAG has reached a plateau in the progress it can achieve, as some websites are unwilling to engage and apply the group’s minimum standards for online adverts. With no obligation on those who do not want to engage to improve, self-regulation will always be limited to those who want to do more to protect animal welfare.

In late 2017, the Scottish Government consulted on introducing a registration and licensing system for animal sanctuaries and rehoming activities in Scotland, following the discovery of bad practice at Ayrshire Ark and the subsequent “Sort Our Shelters” campaign by The Scottish Sun. The Scottish Government published a summary of responses and are now drafting regulations. The RSPCA recently conducted multiple operations, which Dogs Trust supported to ensure that there was sufficient capacity to house all the animals seized. In 2013, six members of staff at Crunchy’s animal rescue centre in Oxfordshire were convicted of nearly 100 counts of animal cruelty.

Although the regulations do not cover rescue centres, the Government have committed to banning third-party sales of puppies and kittens under six months of age, with an exemption for rescue centres. It is essential that regulation of rescue centres is delivered hand in hand with that ban to prevent damaging unintended consequences, which may include such places being prevented from rehoming puppies and kittens legally and third-party dealers passing themselves off as rescue centres to circumvent the ban. I welcome the news that the Government are minded to make that change.

Currently, any person, organisation or animal welfare establishment that regularly receives vulnerable animals with a view to rehoming them, rehabilitating them or providing them with long-term care can do so across the UK without licensing or regulation. The only organisation that provides mentorship to smaller rescue centres and actively works to raise standards is ADCH, which is run by Battersea and has already been mentioned.

Another example of worst practice was highlighted at Capricorn Animal Rescue in Mold, north Wales. The Charity Commission had been investigating governance issues, but RSPCA Cymru had to step in following a request for support. In the past couple of years, Capricorn has been subject to protests and petitions by former volunteers concerned about its animal welfare standards. Those issues have been raised locally with my right hon. Friends the Members for Delyn (David Hanson) and for Alyn and Deeside (Mark Tami), and they are on the case.

The most senior animal welfare charities are very concerned about the vacuum in this area of animal protection. The Government have made reassuring noises on the issue—their consultation indicated that they are minded to provide stiffer sentences and to look at the absence of regulation—and Scotland and Wales are moving on it, too. As I said, this is not an attack on the Government. I welcome what they have said, and I would be grateful if the Minister reassured us about what action he plans to take and the expected timeframe for that action.

16:17

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (David Rutley)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on bringing forward this debate about animal rescue homes, which do a vital job looking after unwanted animals. He made his case with characteristic clarity and enthusiasm. No doubt he drew on his time as a respected Minister of State at DEFRA between 2009 and 2010. I am grateful for the tone he struck, and for the energy he put into his speech.

I acknowledge the valuable work that animal rescue homes up and down the country do to rescue and rehome thousands of sick, abandoned and stray animals each year. The wife of the hon. Member for Strangford (Jim Shannon) obviously does important work in that regard, as do many volunteers, and we should thank them for that. The work of rescue homes is taken for granted by too many. We should remember that most people working in those homes are volunteers, who are incredibly dedicated to the welfare of the animals in their care.

The RSPCA, Dogs Trust, Battersea Dogs & Cats Home and Blue Cross are well known to us and do fantastic work rescuing, caring for and rehoming animals in their care. We can be confident that animals in those organisations are looked after to the highest welfare standards, but we should not forget the smaller and nationally less well-known rescue homes that also work non-stop to care for unwanted and stray animals in our local communities.

[Sir Greg Knight]

I do not expect an immediate answer, but will the Minister at least reflect on the potential for introducing an animals abuse register, listing those who have been convicted of animal cruelty and banned from keeping animals?

[David Rutley]

I thank my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) for raising that issue. I heard what he said in his remarks earlier. The records of people convicted of animal welfare offences are recorded on the police national computer. I will gladly pick that issue up with him separately to explore this further, if he would like to do so.

Improving and ensuring the welfare of animals is at the heart of our recent welfare reforms. We have introduced regulations which came into force in October, including a requirement that licensed breeders should show puppies with their mothers. Local authorities also have more powers to inspect and enforce regulations. The hon. Member for Islwyn (Chris Evans), who is no longer in his seat, talked about the need to keep focused on welfare standards with breeders. Our actions do not stop there. The Government will also increase the maximum penalty for animal cruelty offences. It was announced last year that the custodial maximum penalty for animal cruelty will increase from six months’ imprisonment to five years. That remains the Government’s commitment and we will introduce it as soon as parliamentary time allows.

[Jim Shannon]

Has the Department had any opportunity to look at the legislation in Northern Ireland? It is very strong and was perfected by the Northern Ireland Assembly. Has that opportunity been afforded to civil service staff?

[David Rutley]

It is clearly an issue that I need to take more time to look at. As a relatively new animal welfare Minister, I will follow up with officials about this, based on the hon. Gentleman’s comments.

We are absolutely committed to taking this legislation through, when parliamentary time allows. We have also been looking to raise our welfare standards even higher; in February, we published a consultation on a potential ban on third-party sales. Third-party sales of puppies are those that are not sold directly by breeders. Sales are often linked to so-called puppy farms, which many of us have real concerns about. We know that there are concerns that third-party sales of puppies and kittens can lead to poorer standards of welfare than when puppies and cats are purchased directly from a breeder. We have heard other reports about that during the debate. A ban would mean that puppies and kittens, younger than six months old, could only be sold by the breeder directly or adopted through rescue and rehoming centres.

Our recently published regulatory triage assessment—a mini impact assessment—on the impact of a proposed ban on third-party sales estimates that 5% of puppy sales are by third-party sellers, which amounts to 40,000 puppies per annum. The RSPCA estimates that some dealers were individually earning over £2 million annually from the trade, and in many cases those revenues were not declared to HMRC. Our view is that the demand for puppies can and should be met by changes to the practices of existing breeders in order to breed more puppies, and by selling directly to the consumer. That will further improve the welfare of puppies.

Some stakeholders raised concerns that any proposed ban could be circumvented by unscrupulous centres presenting themselves as a legitimate rescue or rehoming centre. That is why we have been looking at licensing rehoming centres, as the hon. Member for Poplar and Limehouse mentioned, as well as the hon. Member for Leigh (Jo Platt), who has worked hard on the freedom of information requests she is taking forward. I will look at that more forensically in slower time, but I thank the hon. Member for raising that.

Sadly, there are some rescue homes that, for whatever reason, fall short of the acceptable standard of welfare. As with any keeper of animals, an animal rescue home must provide for the welfare needs of animals, as required by the Animal Welfare Act 2006, but they are not licensed in the same way as dog breeders or pet shops. In response to a call for evidence on a proposal to ban the commercial third-party sale of puppies and kittens in February, many stakeholders pointed out that we should also consider closer regulation of rescue homes. Their argument was that we need to address concerns about animal welfare standards in some unscrupulous rescue homes.

16:24

Sitting suspended for Divisions in the House.

16:54

On resuming—

[Mr Philip Hollobone (in the Chair)]

The debate can now last until 5 pm.

[David Rutley]

Thank you, Mr Hollobone. I recognise that votes may have taken hon. Members’ interest away from this debate, but for those of us who are here, and particularly for the hon. Member for Poplar and Limehouse, we will continue to address the important concerns that he has expressed.

I was saying that it is argued that we need to address concerns about animal welfare standards in some unscrupulous rescue homes, and to do so partly to address concerns that third-party sellers would simply set up as rescues to avoid the proposed ban. I can assure the hon. Gentleman that the Government share the concerns completely. Therefore, as part of our consultation on a third-party sale ban, which we launched in August, we asked specifically whether the public thought that animal rescue and rehoming centres should be licensed.

The consultation closed in September and attracted nearly 7,000 responses. We are in the process of analysing the consultation responses and will publish a summary document shortly. I am sure that the hon. Gentleman will be interested to see that. To bring in licensing of animal rescue homes, we would need to be clear about the benefits and the potential impacts. About 150 rescue homes are members of the Association of Dogs and Cats Homes, to which he referred. As he set out in his well-informed speech, the ADCH has set standards for its members to ensure that good welfare standards are met.

One member of the ADCH is the RSPCA. That charity says that in the past eight years it has investigated some 11 individuals and obtained 80 convictions against five people involved in animal rescue; a further two people received a caution. Those cases involved a total of more than 150 animals of different species, including dogs, cats, horses, farm animals and birds. That is despite all the hard work and the ongoing assistance that the RSPCA is willing to give and provides to failing establishments to ensure that they meet the standards and the needs of the animals in their care.

Regulation could benefit the sector and, importantly, the welfare of the animals involved, but we must remember the work and contributions of smaller rescue centres, which we have referred to and which in the vast majority of cases do all they can to promote the welfare of animals in their care. Many are not members of the ADCH, and there may be hundreds out there. DEFRA is working with those organisations and other animal welfare groups to build a better understanding of what the issues are for smaller organisations. We want to work with them to ensure that the appropriate welfare standards are put in place so that those who are operating genuinely, with the best intentions, can do so. The ADCH standards are well regarded and we will further consider them as part of our further work. I am sure that the hon. Gentleman is concerned to hear about that as well.

I think that more needs to be done, following on from the Dogs Trust reception today, to tackle puppy smuggling. That, too, will help well-intentioned rehoming centres. It is becoming increasingly clear to me that much more targeted action is needed to tackle puppy smuggling from end to end—both supply and demand. We have zero tolerance for unscrupulous dealers and breeders abusing the pet travel scheme in order to traffic under-age puppies into the UK. Those puppies have to endure very long journeys and they are not effectively protected against very serious diseases, including rabies and tapeworm. That poses a risk not only to their health, but to the health of other animals and people in this country.

The puppies spend many of their early weeks of life living in completely unacceptable welfare and health conditions. We must stop that in its tracks. We will be working hard to do that. We shall also be taking forward campaigns that will focus on changing the opinion and behaviour of the public, so that they have a better understanding of what is required in order to purchase a puppy responsibly, and that will, at the same time, raise awareness of the scourge of puppy smuggling. Doing that will put greater focus on proper breeders and the valid work of rehoming centres.

The Government have made it clear that we take animal welfare very seriously. We have a clear and positive action plan and have followed that up with a series of announcements, including those about updating and improving the laws on the licensing of certain animal-related activities and about increasing the maximum penalties for animal cruelty. We have consulted on banning third-party sales of puppies and kittens and are looking very actively at licensing rehoming centres to ensure that all rescue homes meet the appropriate standards of animal welfare. Hon. Members can therefore be assured that the Government are not afraid to take action that is needed, and will go on doing so in support of Members across the House who want to see action taken.

I again thank the hon. Member for Poplar and Limehouse for his very thoughtful and considered contribution today.

Question put and agreed to.

Resolved,

That this House has considered animal rescue centres.

Financial Implications for the Next Generation

Tuesday 4th December 2018 Westminster Hall

17:00

[Richard Drax (South Dorset) (Con)]

I beg to move,

That this House has considered the financial implications for the next generation.

It is a pleasure to see you in the Chair, Mr Hollobone, and to give this speech. It is also a pleasure to see my friend and colleague the Minister in his place. I have huge respect for him and I know that he has gone to considerable length to help with this debate.

As the Member of Parliament for South Dorset, over the past eight and a half years I have had the great pleasure of getting to know many of my constituents. I have always undertaken to represent them without fear or favour, whatever their political beliefs, which is why I have called this debate to discuss the appraisal of our nation’s finances by Mervyn Stewkesbury. He is a well-respected and successful businessman from Weymouth, in my constituency. Mr Stewkesbury owns and runs his property company Betterment Homes and he is in the Public Gallery to listen to this debate.

From the very outset some years ago, Mr Stewkesbury has had an agenda. His concern, which he has expressed repeatedly to me, Ministers and various party leaders since 2010, is the economy. In particular, he believes that our national debt and deficit are too high. He has been an assiduous correspondent since my election in 2010, and indeed briefly ran against me in his genuine desire to make these facts known. His manifesto, as a matter of interest, was based entirely on his financial predicament. He had no other agenda, so keen was he to make his point. I am delighted to say that I won and he did not, despite a very honourable attempt to do so.

Put simply, Mr Stewkesbury believes that we are going to hell in a handbasket, and that he has the figures to prove it. He does not think that any of the responses he has received since 2010 have been adequate. I have therefore taken the opportunity to bring this matter before the Minister and my fellow MPs, in the hope that Mr Stewkesbury may receive a satisfactory answer. If that is not achieved, I hope that this debate will at least serve our country by airing a subject that should be aired repeatedly.

Of course we should live within our means, and Mr Stewkesbury is not alone in suffering sleepless nights over the size of our national debt. The most recent quarterly report from the Office for National Statistics confirms that our national debt at the end of March 2018 stood at around £1.8 trillion. This is equivalent to nearly 86% of our GDP, reaching the reference value of 60% set out in the Maastricht treaty excessive deficit procedure.

However, let me be clear that there is no solace here for the Opposition. It is worth noting that we first exceeded the 60% limit in March 2010, at the end of Labour’s 13-year rule, when debt was just shy of 70% of GDP. On the plus side, our deficit or net borrowing in the financial year to March 2018 has dropped by £5.9 billion for the second consecutive year, indicating that the tide has—we hope—begun to turn. Also, although the debt has increased by nearly £44 billion, as a percentage of GDP it has fallen by 0.9 percentage points, from 86.5% to 85.6%. This fall in the ratio of debt to GDP implies that GDP is currently growing at a greater rate than Government debt—again, movement in the right direction. However, as I am sure you understand, Mr Hollobone, this remains a mighty tanker to turn.

A most informative letter from the former Economic Secretary to the Treasury, my right hon. Friend the Member for North East Cambridgeshire (Stephen Barclay), in August 2017 confirmed that when we inherited the largest budget deficit since the second world war in 2010, we were borrowing £1 in every £5 that we spent. Now we borrow £1 in every £16 we spend, as a result of reducing the deficit. The Minister also confirmed that over the same period debt rose as a share of GDP, although by less than it would have risen had the deficit not been reduced. In the same letter the Minister accepted that Mr Stewkesbury was correct in pointing out that the overall public sector net debt had risen. That, of course, is Mr Stewkesbury’s main concern, and one that we cannot afford to brush under the carpet.

I personally believe that, in view of the recent Budget spending increases, claims that austerity is over and the promise of billions more pounds for the NHS—which I do not think we have—it is time to bring this private citizen’s concerns into the public domain. I cannot vouch for all of Mr Stewkesbury’s points, nor his figures, but they form part of his profoundly and sincerely held belief that our country is heading to financial ruin. I am told that Mr Stewkesbury’s figures are all taken from Government and Treasury publications, which are publicly available.

I would like to point out that Mr Stewkesbury’s ire is not exclusively reserved for the current Government. His research dates back many years. His graph, interestingly, shows how national debt began to soar just as we joined the EU in 1973. He says that for 25 years before we joined the EU our debt increased on average by 1.4% year on year, but from the moment we joined, and for the next 45 years, it increased on average by 9% every year. He claims that had we not joined and maintained that 25-year borrowing record, our debt would now be £66 billion instead of £1.8 trillion.

As I have said, Labour receives equal scrutiny. Mr Stewkesbury was amazed to hear the shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell), tell the BBC on 18 March:

“Austerity is a political choice, not an economic necessity.”

Mr Stewkesbury asks:

“How can he possibly say this, when we are overspending and borrowing around £300 million every day?”

He is not enamoured with the economics of the Leader of the Opposition either, adding that his pledge to

“spend our way out of debt”

is nothing short of ridiculous.

As I have mentioned, when David Cameron’s Conservative Government were elected in 2010, the financial black hole in which we found ourselves was bequeathed to us by the departing Labour Government. Who can forget the note left by the departing Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), which read, “I’m afraid there’s no money left”? Perhaps it would have been funny, had it not been true. Certainly, that is Mr Stewkesbury’s view. He says that over the past seven years he has spent more than 5,000 hours studying Government finance and that we are “on course to bankruptcy”. He says that it is an indisputable fact that Government cannot go on overspending and borrowing forever without ending in bankruptcy, but that, according to him, is precisely what we are doing. In a letter to me earlier this year, he explained that it had taken 100 years to rack up a debt of nearly £450 billion by 2005, when the debt was £446 billion, and that is taking into account two world wars. Then, Mr Stewkesbury says, over the following years of Labour, coalition and Conservative rule that figure has more than quadrupled to £1.8 trillion. Sobering figures; sobering stuff.

Mr Stewkesbury adds that many of our assets, not least our gold—thanks to Labour—have been sold and an additional £375 billion has been printed. He claims that one asset sold, for £757 million, was the UK’s stake in the channel tunnel. He believes that allowed us to go for three days, five hours and 36 minutes without having to borrow any money. I would be grateful if the Minister could help on that point.

Mr Stewkesbury’s graphs show that in the seven years from 2010 our debt increased by £719 billion. He then explains the consequences. He says that in 2010 the debt for each living person was £16,231, with interest at £9 per person per week. By April 2017 those figures had risen to £26,526 and £14 respectively. He goes on to say:

“For 40 years our debt on average doubled every five years. Do the same again and by 2026 our debt will be more than £50,000 per person, with interest in the region of £30 per week per person. This is not sustainable.”

Neither is the fact, he says, that the Government, on average, overspent and borrowed £338 million every single day during 2016-17. Last year, he adds, the Government increased the debt by £123 billion. Government spending now equates to £231 per week for every living person, at a time when two in five work in the private sector, which, in the main, pays for our public services, including pensions, through tax.

Mr Stewkesbury believes that our children’s future is at risk, and he claims that party politics—of all parties—has played a significant role. For more than 40 years, he says, parties of all colours have attempted to buy voters with unaffordable promises. Here I will add my own two pennies’ worth. I absolutely agree that too often Governments of all colours have promised things that we simply cannot afford and have attempted to buy the voters. I hope that disingenuous habit will not continue in future. I most humbly suggest that what voters actually need is the truth, and if that is financially unpalatable, they need to hear it.

Last month, in his most recent communication with me, Mr Stewkesbury wrote that our debt interest payment alone is circa £50 billion. People outside this place, whether they are in the private or public sector, ask, “Richard, why aren’t you doing this? Why aren’t you doing that?”—always about money, of course—or say, “Spend this, spend that; do this, do that,” but when I tell them the rather sobering fact that before we do anything we have a massive debt interest to pay, a remarkable quiet comes over them when that sinks in. Before we progress anywhere, we have to pay £50 billion—every year. It is a terrifying sum of money, which we have to reduce. I hear cries of austerity, but I am not sure that austerity is working in that sense, because we still have a vast debt interest.

Mr Stewkesbury thinks it is totally irresponsible to claim that austerity is over when we are still borrowing £155 million every single day. Furthermore, he opines, it is irresponsible of the Government to claim that austerity is over until we are living within our means and repaying our debt. He is concerned that, according to Government figures, they expect to borrow a further £52 billion this year and £44.1 billion in 2019-20, so our debt will exceed £1.8 trillion by 2020. That equates to £28,371 for every living person.

Mr Stewkesbury has consistently sought clarification on one particular piece of historical accounting, but has never had a satisfactory answer. Labour’s actual debt in 2010 was reported as £759 billion. Later that figure was increased to just over £1 trillion. Mr Stewkesbury would be most grateful if the Minister could explain why those figures seem so different.

Finally, on Brexit—I thought I might get through one contribution without mentioning that word, but unfortunately Mr Stewkesbury has not allowed me to do that—he quotes an interview I gave, in which I said:

“We want to be in control of our destiny and I am baffled by anyone who cannot understand why.”

He, too, wants us to be in control of our destiny, but feels that that is impossible if we go on overspending and borrowing about £300 million every day.

Despite the many letters Mr Stewkesbury has received from the Treasury, he believes that the truth—or perhaps the facts—has yet to be explained to him. He dismisses the many letters he has received as pages and pages of waffle. He particularly resents being told that we are in a stronger financial position than in 2010, and believes that the figures prove otherwise. He says that one Minister wrote to say that Government debt is expressed as a share of GDP and that, in reducing the deficit, the Government have made significant progress in improving the health of the public finances. With the current debt at 85.6% of GDP compared with 69.6% in 2010, his concern is understandable. He and I very much look forward to hearing the Minister’s response, when he can hopefully allay Mr Stewkesbury’s concerns.

[Mr Philip Hollobone (in the Chair)]

We will move straight on to the Front-Bench contributions. The guideline limits are five minutes for the Scottish National party, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister, but we can be flexible.

17:17

[David Linden (Glasgow East) (SNP)]

As always, it is a pleasure to see you in the Chair, Mr Hollobone. I am reliably informed by WhatsApp that Divisions are imminent, so although we have a degree of flexibility, I will try to be mindful of that. I warmly congratulate the hon. Member for South Dorset (Richard Drax) on securing the debate.

I sometimes come to these debates feeling a bit like William Hague. The Order Paper says that the debate is about the financial implications for the next generation, but I realise that I am probably the youngest Member in the Chamber at the moment. I do not want to sound like William Hague by saying, “It’s all right for you: you won’t be here in 40 years’ time,” but in reality, hon. Members will not.

It is somewhat remarkable that the hon. Member for South Dorset managed a good 15 minutes or so without touching on Brexit, because the reality is that Brexit is the biggest financial threat to the next generation. As I will touch on, it will cost each person £1,600 by 2030. I will also touch on what we are doing at home in Scotland to support first-time buyers, and on the recent Sustainable Growth Commission report.

Opportunities for young people, such as the freedom of movement and the ability to study abroad, will be severely limited as a result of Brexit. All those things are helpful in terms of social mobility and increasing people’s spending power. The Scottish Government’s analysis found that, by 2030, GDP would be £9 billion lower under a free trade agreement than if we had stayed in the EU. Of course, that decision was expressed by the people of Scotland, 62% of whom voted to remain in the EU. That £9 billion is the equivalent of £1,600 per person in Scotland. That is deeply disappointing, although we see that in the main Chamber the UK Government are still refusing to admit the true cost of Brexit, with the Treasury analysis not covering the Prime Minister’s deal; it covered no deal, the European Free Trade Association, the European economic area, the situation without a customs union, and Chequers. This is all quite important for the country’s direction of travel in terms of our finances and what we will leave to the next generation.

The Bank of England’s analysis suggests that the Prime Minister’s deal, which is clearly about as popular in this House as a cup of cold sick, will take between 1.25% and 3% from GDP by 2023, with a no-deal Brexit cutting between 7.75% and 10.5%. So the idea that we can have a debate about the financial threat to the next generation and ignore these figures really beggars belief.

I also want to touch on what we are doing in my own country to make sure that we have an economy for future generations. Some of it is about what we are doing to invest in housing. I remain incredibly concerned, almost as an observer down here, about the fact that the UK Government do not necessarily see the need to invest in social housing. There are things that they are doing around stamp duty, but stamp duty limits for £500,000? I do not know a huge number of 27-year-olds who are able to go and lump down £50,000 for their first home. There is some good stuff being done in Scotland, which I commend to the Minister, about what we can do to invest in housing while also ensuring that young people can get on the property ladder.

Finally, I will touch on the issue of the growth commission, whose report was published by Andrew Wilson on behalf of the Scottish Government. That report looks at the finances of an independent Scotland, and what it is absolutely clear about is that an independent Scotland can leave behind the broken economic model of the UK and actually benefit future generations with inclusive, sustainable growth. I will finish with this point: if the approach to spending recommended by the commission had been applied by the Westminster Government over the past decade, the £2.6 billion in real-terms cuts to Scotland would have been completely wiped out.

So I commend the hon. Member for South Dorset for initiating this debate. It is very difficult to have a debate such as this one, about the next generation, when we are quite literally pulling the rug from under their feet by the retrograde step of leaving the European Union and denying them the right to love and live elsewhere, and the opportunity to get on in the world.

17:22

[Lyn Brown (West Ham) (Lab)]

It is an absolute pleasure, Mr Hollobone, to serve under your chairmanship.

I am very grateful indeed to the hon. Member for South Dorset (Richard Drax) for giving us the opportunity to discuss the very real financial implications for the next generation of this Government’s continuing austerity policies.

We have had eight years now of claims that we have to tighten our belts for the sake of the future. Where has it got us? We are simply storing up problems for the future by destroying the public services on which so many people depend. Last month, the United Nations sent its special rapporteur on poverty to the UK and one of the evidence sessions was held in my constituency. I was there, and I have to say that it was really hard to sit and listen to that evidence. We heard about mums whose young children were not learning to crawl because they were confined to a bed in a small, rat-infested room; the mums could not let the children on to the floor. We heard from parents who had to move their children many times in a single year, from hostel to hostel, preventing friendships and bonds from being created in any community, and forcing the children either to move schools, which would severely disrupt their education, or to face hours of travel every morning and afternoon to get to school and back.

We also heard from vulnerable mums who had survived violence inflicted by people they were living with; they were forced to stay where they and their children were, although they were at significant physical risk, because they simply had nowhere else to go. The services that they needed had simply been cut.

What kind of physical, emotional and developmental problems are we storing up for these children’s future? For me, it is obvious that this kind of poverty is an absolute calamity for their life chances. And it is not just me who is saying that; it is what the UN rapporteur concluded. He noted that 14 million people in the UK are living in poverty today, and that 1.5 million people in the UK are utterly destitute, unable to afford essentials such as shelter, food, heating or clothing. These essentials keep a body and mind healthy and productive, but 1.5 million people—including 365,000 children—do not have access to them.

As we all know, health is extremely important to life chances. The Food Foundation has shown that the poorest quarter of households in the UK would have to spend more than 25% of their disposable income to follow the Government’s “Eatwell” guidelines. That is a quarter of their disposable income going just on food, and more than half of the households that are deprived of food include children.

Let me tell a story from my constituency. I met a young girl at an event where food was provided. Her plate was piled high, and I looked at her and said, “Whoa! That’s an awful lot of food for a small person!” “Yes,” she beamed. “It’s not my turn to eat tonight.” She was young and she had adapted, so for her such circumstances were normal. How will she and all the others in the same desperate situation feel when they realise that it is not everybody’s “normal”?

Some families are struggling to eat, let alone eat healthily; the increasing reliance of so many families on food banks is clear evidence of this. The Trussell Trust has released figures showing substantial increases of take-up of food banks year on year on year, and it is predicting bumper usage this Christmas.

When families cannot afford to eat, it has an impact on their health. Poor physical health or poor nutrition in childhood impacts upon a child’s physical, mental and educational growth. As a basic, how can a child concentrate in school if they are hungry? How can they make the most of their education? How can they develop the skills that they need for a prosperous adulthood? And how can they provide the skills that we need for a prosperous economy?

A sickly or malnourished child takes health risks and medical risks into their adulthood, costing the NHS much more than if they had been given a decent start in life. Reducing support to children today is a false economy; the state of tomorrow will have added costs because of it. The title of this debate is absolutely right—the next generation faces a financial threat from today’s austerity policies. That is one of the reasons why Labour is committed to universal free school meals, so that no child goes hungry in term-time, and it is also why we are committed to a real living wage and a social security safety net that keeps families out of poverty.

Let us have a quick look at the Government’s investment in the future economy through schools, further education and adult education, to give the next generation the skills and opportunities that they will need for the future. Investment in further and adult education has been cut severely. Spending per student in FE colleges is 21% lower than in 2010; the number of adult learners has fallen by a million; and overall spending on skills for adults has been cut almost in half. Now, 60% of small and medium-sized enterprises say that poor skills are their biggest challenge, and eight in 10 FE college leaders say that funding cuts are preventing them from filling that skills gap.

So there is a skills crisis and it is already affecting productivity and growth, but in the October Budget the word “college” did not appear once. I say again—how can this Government claim to be investing in future generations when they refuse to invest in the skills that businesses are demanding?

17:28

Sitting suspended for a Division in the House.

17:50

On resuming—

[Mr Philip Hollobone (in the Chair)]

The new finish time for the debate is 6.22 pm.

[Lyn Brown]

Let us face it: schools are faring badly. The Chancellor’s gift of £400 million in the Budget for some “little extras” was frankly insulting in the context of billions of pounds of cuts. If the Institute for Fiscal Studies is right, capital spending on schools has fallen by £3.5 billion—a 41% real-terms cut. I can see it in my constituency every time I visit a school. They are struggling, and they are also struggling to keep their students safe from grooming and crime at a time when young people’s services are disappearing, again due to cuts. Violent crime is rising and destroying the futures of increasing numbers of young people in my constituency, but the Treasury’s only response is to announce £170 million for our neighbourhood police services. That sum would cover less than 40% of the police pensions black hole, so it is unlikely to stop the fall in the number of officers on our streets. Reports suggest that half of that £170 million will have to come from elsewhere in the massively overstretched Home Office budget, so what will be cut to make up for it? Will it be firefighters? Will it be Border Force?

The next generation will not thank us if we leave them more vulnerable to fire, crime and terrorism. The cuts to councils have ensured that children’s services are under threat. Sure Starts and libraries are closing. We are charging for sporting activities in communities that help keep children healthy. There is not enough money to employ the youth workers that we need to teach my children resilience against the groomers.

Since 2010, the Government have claimed that austerity is working to bring down the debt and make spending sustainable, but that is simply wrong. They have missed every deficit target they have set themselves. They said they would eliminate the deficit by 2015, but now the Office for Budget Responsibility says that even eliminating it by 2025 will be challenging with the current approach. To the extent that the central Government deficit has reduced, much of that has been done by passing debt and problems to the future, where they will require more spending to fix. The Government are passing problems into the lap of our underfunded schools, hospitals, local councils and police forces. That does not make the next generation more secure or our public debt more sustainable.

Future generations are not being protected by austerity; they are being harmed by it. We need public investment to repair the safety net, to improve the public services that underpin the life chances of the many and to drive growth that benefits the whole country. In fact, we need a Labour Government to rebuild Britain.

17:51

[The Economic Secretary to the Treasury (John Glen)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for South Dorset (Richard Drax) and acknowledge the assiduous way in which he has communicated with the Treasury over recent years, sharing the correspondence of his constituent. I welcome this opportunity to address, in as detailed fashion as possible, the points he has raised in his eloquent speech. I pass on my sincere thanks to his constituent for raising his concerns with the Government. I respect those concerns, and it is rare and gratifying to have a member of the public who takes quite such an assiduous interest in the public finances as to spend 5,000 hours studying them. I also thank the hon. Members for West Ham (Lyn Brown) and for Glasgow East (David Linden) for their contributions to the wide-ranging discussion this afternoon.

The Government share the concerns expressed today about the level of debt and recognise the importance of reducing it so as not to pass on an unfair burden to the next generation. I am anxious to reassure the constituent of my hon. Friend the Member for South Dorset that the Government are taking this matter seriously and are committed to getting debt down.

It may be helpful if I start with a few points of clarification. My hon. Friend observed a number of statistics relating to general Government gross debt. The Government’s chosen metric for debt is public sector net debt, which is a more complete and transparent measure of debt, incorporating a wider range of public institutions than general Government gross debt. Looking at net debt rather than gross debt also provides a more accurate picture of the health of the public finances, as it nets off our liquid assets.

My hon. Friend also stated in his opening remarks that the Government had reduced the deficit so that we now borrow £1 in £16, compared with £1 in £5 in 2009-10. He may be pleased to know that the figure is actually better than that: the Government now borrow only £1 in every £20 we spend.

An important point has been raised about how we measure debt, which I would like to address. The observation is that debt has increased in cash terms since 1973 and that that relates to us joining the European Union. I reiterate that looking at debt as a percentage of our national income—that is, GDP—is a more helpful way of assessing the public finances as it recognises our ability to afford debt as a nation. Looking at debt as a percentage of GDP adjusts for inflation and our ability to service that debt. It also paints a different picture from the nominal figures and shows that our debt level fluctuated between 20% and 50% from 1973, before significantly increasing at the time of the financial crisis. The fall in debt that we are now seeing as a percentage of GDP, rather than in cash terms, is an important distinction as it recognises that GDP is growing faster than debt. As my hon. Friend says, that is a movement in the right direction.

My hon. Friend also observed that, although we have significantly reduced the deficit since 2010, debt rose as a share of GDP over the same period before it peaked in 2016-17. That increase to debt in cash terms and as a percentage of GDP is principally due to the high levels of borrowing that we inherited from the last Administration—a post-war high of 9.9% of GDP, to be exact—which added to our overall debt burden. That could not be fixed overnight. As it was, there was significant resistance to the measures we took to reduce that deficit in the early years in government. We have now reached a crucial turning point, and the deficit has been reduced by four-fifths, from 9.9% when we came in to 1.9% of GDP at the end of the last financial year in April.

Thanks to the work of the British people to reduce the deficit, debt peaked at 85.2% of GDP in 2016-17 and has now begun its first sustained fall in a generation. It will reach—or, it is anticipated to, given the inherent difficulties of forecast—74.1% of GDP in 2023-24. That progress means that we are in a much stronger position with the public finances than we were in 2010.

While it is correct that debt rose after 2010, without the Government successfully reducing the deficit to the extent we have, debt would have been even higher and would still be rising. As my hon. Friend observed, there is a keen contrast between the Government’s balanced approach to paying down the deficit and paying down debt and the Opposition’s proposals to spend £1,000 billion if they assume office.

My hon. Friend also mentioned debt figures in cash terms for 2010, which his constituent Mr Stewkesbury rightly points out have changed. That change is due to a large number of reclassifications, the largest of which was adopting the European system of accounts 2010, which increased debt by around £100 billion due to the inclusion of Network Rail’s debt and the asset purchase facility and the treatment of public sector bank shares as illiquid. Reclassifications are necessary in the course of following international standards, which are themselves in constant evaluation.

The Government’s commitment to responsible management of the public finances was shown this summer, as we published our response to the OBR’s fiscal risks report, providing a detail account of the actions that the Government are taking to address risks to fiscal sustainability. That report provides a mechanism for Parliament and the public to assess the Government’s strategies for managing the risks, and to hold us to account for their implementation.

The report’s publication reaffirms the UK’s place at the international frontier of fiscal transparency and accountability, and supports the Government’s long-term fiscal strategy. The report set out a range of reforms that we are pursuing to reduce risks to the fiscal outlook, including actions to reduce our inflation exposure and tighter controls over the issuance of Government loans and guarantees. Such reforms will enhance the UK’s resilience to future economic shocks and aid in helping to keep debt falling.

It is right that actions taken by the Government today do not unjustly impact the next generation. In 2010, the Government inherited a very difficult position in the public finances, with debt having nearly doubled in two years and the budget deficit at its largest since the second world war. We have made significant progress. The deficit has been reduced by four-fifths and debt has begun its first sustained fall in a generation. However, the Government recognise that the job is not yet done, and share the concerns raised today.

We must continue to reduce debt to reduce the burden placed on the next generation. The OBR’s October forecast confirmed that the Government are on course to do that, and that we have met our near-term fiscal rules three years early. We will continue with our balanced approach, keeping debt falling while supporting public services, investing in the economy and keeping taxes low.

My hon. Friend raised a specific point about the sale of the Channel tunnel. The Government’s approach to such matters is that we sell public assets where there is no public policy reason for retaining them, but all asset sales must meet the value-for-money tests set out in the Green Book at the time.

It has been difficult to respond fully to today’s debate, given the range of speeches. My hon. Friend made essentially a macroeconomic critique of the Government, while the Opposition Front-Bench Members made a different set of observations, which are perhaps best left to another time. I sincerely acknowledge the need for the Government to come to terms with the fact that in 2019-20 we will still spend £43 billion on net debt interest, which is more than the amount spent on our armed forces. We need to be clear about the imperative to bear down on the challenge of getting our public finances into a position where we do not add to that debt burden, so that the next generation is in a better situation than when we came into Government.

17:59

[Richard Drax]

I am most grateful to the Minister, to the hon. Member for West Ham (Lyn Brown) and the hon. Member for Glasgow East (David Linden) for their contributions, and to you, Mr Hollobone, for listening to a debate that was full of figures. Such debates are perhaps not always the most gripping, but they are nevertheless important.

The hon. Member for West Ham made some very relevant points. The only point that I would like to make generally to the Minister is that it seems to me that one can look at it as Baroness Thatcher did—and gosh, how we miss her. She always used to say that it is like running a household: if the household spend more than it earns, it goes bust. If a shop—which is where, of course, she came from—makes more than it spends, that money can be reinvested in the business, and perhaps the staff can be paid a bonus, or whatever it may be. That is how she explained running an economy. I know that is very simple, and it is more complicated than that in real life, but the basics are true. Perhaps I can leave the Minister, and the Opposition, with that thought.

I did not agree with the representative of the Scottish National party, the hon. Member for Glasgow East, who said that by leaving the EU we would go to hell in a handcart economically. I would say that the opposite is true, because it will give our country the chance to generate more income. We need to earn more, so that those who earn more pay more tax and those taxes can pay for all the public services that the hon. Member for West Ham rightly pointed out are in urgent need of more money. I would totally concur with that, but we cannot just produce money from nowhere.

We cannot keep printing money; we have to earn it as a country. I hope and pray that when we leave the EU, and I hope that we do—fully—we will be free to generate such an economy, and to give our entrepreneurs, and the businessmen and women in this country, the chance to get out there and generate wealth for the services that we need to pay for.

I thank everyone who has taken part, and I thank you, Mr Hollobone, for chairing the debate.

Question put and agreed to.

Resolved,

That this House has considered the financial implications for the next generation.

18:04

Sitting adjourned.