Westminster Hall

Wednesday 26th June 2019 Westminster Hall

Wednesday 26 June 2019

[Mr James Gray in the Chair]

NHS Pensions

Wednesday 26th June 2019 Westminster Hall

00:00

[Sir Robert Syms (Poole) (Con)]

I beg to move,

That this House has considered NHS pensions, annual and lifetime allowances.

I begin by declaring an interest, because anybody who has been in the parliamentary pension scheme is affected by annual allowance and lifetime allowance. Therefore, some of the things I say may reflect on me and maybe other hon. Members, so I suggest they make a declaration as well—

[James Gray (in the Chair)]

Order. The hon. Gentleman may be right to say that all hon. Members may be affected by that matter, but for each individual to have to make that declaration would, I think, be otiose.

[Sir Robert Syms]

Thank you, Mr Gray. This is an important subject, and the more I learn about it, the more I realise its implications for the national health service. I had originally been told that the Treasury would respond to the debate, but I understand that the Department of Health and Social Care has manfully stepped up to the plate—the first example I have seen of a hospital pass to a Department.

The subject has devastating implications for the NHS, dental services and many other services in this country unless it is addressed by the Government. When the coalition Government came into office in 2010-11, they were quite right to reduce the amount of money that could be put into pension funds. At that time, someone could put £255,000 into a pension fund tax free; clearly, if they had such resources, it was unfair on the lower paid. The Government moved to reduce the tax leakage by reducing a number of the allowances.

The problem today is that the Government have drawn the allowances too tight, and in 2015-16 they also introduced a taper to the annual allowance. All that is having a pernicious effect on the NHS and creating what the British Medical Association has called a “perfect storm”. The lifetime allowance, which is just over £1,055,000, is such that most senior doctors and general practitioners get pulled into additional tax, paid at 55%. That raises the question whether they should continue working or retire early; there is a lot of evidence that members of the medical profession are deliberately retiring early because of the implications of working longer.

The annual allowance of £40,000 is creating problems of supplementary tax bills, which are falling at the doors of consultants, doctors and senior nurses. That £40,000 is made up of the increase in the fund and contributions, in a slightly convoluted formula, but the introduction of the taper and the way that it operates cause particular havoc. For higher earners, a strict regime applies to annual contributions, which is known as tapered annual allowance. It applies to people who have both adjusted income over £150,000 per year, which is total taxable income plus the real growth in value of pension rights over the year, and threshold income above £110,000 per year, which is essentially total taxable income, but net the value of any employee pension contributions.

Where an individual ticks both boxes, for every £2 of adjusted income that they receive above the £150,000 level, their annual allowance is reduced by £1. This means that those with an adjusted income of £210,000 have their annual allowance tapered down from £40,000 to £10,000, the lowest level to which tapering can reduce the annual allowance. That tapered allowance was introduced in 2016-17. The ability to carry forward unused allowances for years before the taper was enforced has so far helped to dampen down its impact, but in 2019-20, carry-forward will be from no earlier than 2016-17, when the taper came into force. That will reduce the number of people with significant amounts of underused annual allowance available, and as a result the taper will bite rather more than in earlier years.

If we look at the figures, we see the number of people who exceed annual allowance or hit the taper multiplying each year, pulling many more people into the system. Many senior doctors earn enough money from their core hours plus additional shifts to be potentially affected by the tapered annual allowance. In addition, because of the relative generosity of the NHS pension scheme, pension rights can be built up quite quickly, especially for those who have experienced a step-up in pension rights because of a promotion. Paradoxically, in most cases overtime shifts are not pensionable. That means that a doctor can find that, by working more, he or she has built up no extra pension but, because of the operation of the tapered annual allowance, has reduced the amount of pension that he or she can build up within the tax relief limits.

All that leads to more complexity within the system. It is extremely difficult for someone to work out whether they have an annual allowance issue; that is true for any high earner, but may be particularly true for those in the NHS, because they have rights under different sections of NHS pension schemes—for example, a final salary pension and a career average pension. Those rights are tested against annual allowance, but a negative accrual in one scheme cannot be set against a positive accrual in another scheme.

[Alex Chalk (Cheltenham) (Con)]

My hon. Friend is making an excellent speech on an area that is technical, but has enormous implications. I have been contacted by a consultant in emergency medicine at Gloucestershire Hospitals NHS Foundation Trust, who has indicated that because of the perverse incentives of this scheme, he will not be taking on an extra shift and out-of-hours work, which reduces that vital expertise. Does my hon. Friend agree that we must turn this around so that we have frontline medics doing what they should be doing—caring for our patients?

[Sir Robert Syms]

Almost anybody I talk to in any hospital anywhere has an example of the impact of this additional taxation biting, and its impact on working methods. I know my hon. Friend has tried to get a debate on a similar subject, because we are ultimately talking not about consultants, but about the patients and the impact this has on delivering services.

For defined benefit pension rights, the test against annual allowance is complex. The growth in rights over the year must be adjusted to strip out any increase that simply keeps pace with inflation, and is then multiplied by 16 added to any additional lump sum accrual before being tested. Whether the tapered annual allowance applies depends not just on whether someone’s adjusted income is over £150,000, but on whether their threshold income is over £110,000. These two measures are quite different, and adjusted income in particular is calculated in a very complicated way.

That creates unpredictability. A tapered allowance works by using income from the current year to determine the size of the annual allowance for the current year. Many NHS doctors work extra NHS shifts and many do private work; they may have little idea what their income for the year will be until very late in the year. Sometimes, NHS trusts get additional money released at the end of the year, leading to more operations. Sometimes, NHS trusts pay at a rather slow rate, and they may pay in a different year from that in which an operation was undertaken. As a result, doctors who take on a lot of extra work late in the year can suddenly find they have an annual allowance issue.

There is also a cliff edge issue. Although the tapered annual allowance result is a gradual reduction in annual allowance for each £1 of adjusted income over £150,000 per year, the fact that the whole system switches on abruptly for threshold income above £110,000 can create a violent cliff edge effect. For example, those with threshold income that is 1p below £110,000 can effectively ignore the tapered annual allowance, but those with income that is 1p above it can find themselves caught with a rather large tax bill. For the latter group, not only does each extra £1 attract income tax at 40p and a loss of personal allowance equivalent to another 20p in the pound, but they can suddenly face a big drop in their annual allowance.

Some people can be worse off overall by working an extra shift. I have heard testimony to that effect from many doctors who say they have done additional work and ended up worse off.

[Paul Masterton (East Renfrewshire) (Con)]

I congratulate my hon. Friend on securing this debate. I hope he will not mind my taking the opportunity to plug the event I am hosting with the BMA next Wednesday between 4 pm and 6 pm, which will be a great opportunity for MPs to meet many consultants with stories such as this, and to find out more information about the problem. Does he agree that, because this matter is so complex, it is important for MPs to come along and speak to the BMA, and speak to their local senior consultants, to really understand the impact this is having on the ground?

[Sir Robert Syms]

I thank my hon. Friend for his contribution. This is an area that people start to get interested in only when they start thinking about retirement. Then they realise how complicated the retirement rules are. This issue is upsetting many people who work in the NHS because of the impact it is having.

A survey of GPs to which 46% replied—354—found that their average tax bill owing to the tapered allowance was £18,500, so we really are talking about considerable sums of money being levied on doctors, many of whom do not expect it and suddenly get into arrears. Dr George McInnes, radiologist at Poole Hospital, said to me that most of his radiologists are contracted for 10 sessions, with most working 11 or 12 as a matter of norm to keep the throughput going. However, as is the case in most hospitals, he now finds it terribly difficult to get them to do more than 10, and when people come to review their contracts, they ask to do less work, rather than more, because of the impact of the pension arrangements.

The real problem is that most of the people affected have done years of training and have years of experience—they are the super strikers of the NHS; the team leaders—and despite tax bills have a loyalty to their hospitals and teams and continue working. However, year on year, they find themselves penalised for working. As rational people, they decide to play golf or to spend more time with their families or with Netflix. That is logical, and the Treasury is deterring many people from doing what they have trained for their whole lives to do. The letters, emails and phone calls I get from doctors do not say that they want to work less. They actually want to work more, but they do not really feel that they should work more and be worse off as a result.

The Government have put additional resources into the NHS, and we can argue about whether it is enough or not. However, the key point from the Treasury and the Department of Health and Social Care was the importance of productivity in the NHS, which we can get only if the people within the service are actually able to deal with patients and the issues before them. If, because of the tax issue, people work less, the only way around that—apart from locums, if they can be recruited —is to recruit more people to do fewer operations. That is not increased productivity; that is reduced productivity. If we want to use these people, we have to set a tax system that is proportionate and sensible.

It is not only the NHS. The British Dental Association says the same thing: people are retiring early and are more averse to taking on NHS patients. The consequence is the problem that we are now starting to see, which will get worse and worse. I know that the Department of Health and Social Care understands the issue; I have talked to the Secretary of State. I think the Treasury sort of understands that there is a problem, which is why I think it indicated that it might give additional resources to the NHS. However, the problem is that the only way out of this is to get rid of the taper, because its impact on the way people work is so detrimental to the NHS. Even if we take into account wider issues and other areas, I cannot see how any scheme can be brought in to ameliorate its impact.

We in this House want patients to get the best service, and sometimes we have to pay people to get the best service in the national health service. Most consultants or senior nurses have trained for years and are dedicated to their patients, and all they want to do is to turn up and work. The Government have put money into the NHS to allow operations to take place, but perversely our system of taxation on pensions, which was probably drawn up to stop city slickers avoiding tax, is impacting on a major, important public service and will lead to longer waiting lists, meaning people—who, if not in pain, will be very uncomfortable—waiting to be dealt with.

We all want people to be dealt with, doctors to be happy and the NHS to work properly. We need the Treasury to get out of the way on this one, because it is causing problems.

09:43

[Ruth Jones (Newport West) (Lab)]

I commend the hon. Member for Poole (Sir Robert Syms) for bringing this important debate to the Chamber. I did not intend to speak, but I feel obliged to do so now. I understand why this scheme was brought forward. It is not the scheme that I have problems with but its implementation and the unintended consequences, which have already been raised.

The situation in the NHS is complex. We have three NHS pension schemes, and it is really difficult to work out; I am part of two of them and I struggle to work out what I am supposed to be doing. We understand that it is difficult. The taper comes in at £110,000. The Chancellor told me in the Chamber that it is £150,000, but it is not. This is important, because although these wages seem a lot to some people, they are not that high compared with those of senior businesspeople. The taper will affect people such as consultants, GPs and medical academics. These are our leaders, and we need to ensure that there is succession planning. If these people leave abruptly because they realise the tax implications, there is no chance for succession planning.

[Alex Chalk]

The hon. Lady is making a good speech. It is true that senior consultants are often relatively well paid, but they cannot afford sometimes four, five or six-figure tax bills suddenly arriving on their doormats, which provide the most profound disincentive to their doing what they want to do: care for patients.

[Ruth Jones]

Absolutely. The hon. Gentleman makes an excellent point, and much more eloquently than I could. These things are coming in at the end of people’s working lives, and it is difficult for people to budget for them when they do not know what will land on the doormat. When we enter working life and take on board pensions, we know what we are signing up to. These changes are being made in the latter stages of people’s working lives, so it is really difficult to budget and plan for them.

Several constituents who work at the Aneurin Bevan University Health Board in my constituency have written to me to say that they will finish work early or cut down on the number of sessions because of these punitive tax bills. Although obviously the health service in Wales is devolved, pensions are not, so it is important that we look at this issue in the round and across the UK. We need to make sure that we retain these doctors across the board.

I commend the hon. Member for Poole for introducing the debate. I ask the Government to look again at this situation.

09:46

[Steve Brine (Winchester) (Con)]

I add my congratulations to my good friend, my hon. Friend the Member for Poole (Sir Robert Syms), on securing the debate, kicking things off and so clearly setting out the challenge that we face. In recent weeks, we have worked as a tag team between Winchester and Poole— earlier this month I raised the issue in the Chamber during an urgent question on the NHS people plan, which is a logical place for the subject to sit, and he, obviously, is leading the debate today—and that is entirely appropriate given that we are relatively near constituency neighbours and that many of our constituents work in Winchester, Bournemouth, Poole and Southampton NHS trusts and do shared work across those trusts.

I must say that the debate should be responded to by a Minister from Her Majesty’s Treasury. That is no criticism of the excellent hospitals and workforce Minister, who until very recently I was honoured to call a ministerial colleague in the Department of Health and Social Care. This is the first debate being responded to by a Minister from the Department of Health and Social Care that I have spoken in since I left office. However, seeing as we have a Health and Social Care Minister here, I will focus my remarks on patient care, which my hon. Friend the Member for Poole has discussed.

Over the past few weeks, I have spoken on a number of occasions to the chief executive of Hampshire Hospitals NHS Trust, Alex Whitfield, and I have spoken either through her or directly to numerous consultants and senior clinicians about this challenge. I am aware how serious it is, both for the individuals adversely affected—as we heard from my hon. Friend the Member for Cheltenham (Alex Chalk) and the hon. Member for Newport West (Ruth Jones)—and for patient care and wellbeing, because the NHS is about its people if it is anything.

When I first spoke to my local trust about this, the chief executive told me that

“the pension situation is having a significant impact on our people”

in Winchester and Basingstoke, and:

“The NHS scheme is particularly affected by changes to the pension tax system relating to the Annual Allowance and the Life Time Allowance.”

She is not wrong when she says:

“These changes are complicated and for individuals in the NHS defined benefit pension scheme the implications are not at all transparent.”

That point was well made by my hon. Friend the Member for Poole. She says:

“As a result, individuals are receiving unexpected tax bills of tens of thousands of pounds. It particularly impacts on consultant doctors, senior nurses and managers. Individuals are making different decisions as a result of these bills.”

I will pause on that point, about the senior NHS staff on whom this is having an impact.

I was privileged to be part of a Department that, under the previous Secretary of State, who is now the Foreign Secretary, and under the current Secretary of State, has delivered a record funding settlement for the NHS—£20.5 billion a year. I saw that play out in Winchester a few weeks ago, when I opened the new emergency department of the Royal Hampshire County Hospital in the heart of the city. That is excellent news. In my opinion, the challenge for the NHS will not be too little money, as a result of the settlement and the excellent long-term plan, but having the right people, who can spend that money in the right way to deliver the patient care outcomes that we want. If we are losing senior people, we have a senior problem.

As well as speaking to the leadership at my local trust, I wanted to find out more from the horse’s mouth, so I asked members of the local clinical community to come forward with their own stories and, if I may, I shall put a few of them on the record. One consultant set the scene very clearly. He told me that the issue is the annual allowance pension tax taper, which I will come back to, and the inflexibility of the NHS pension, which is landing consultants with huge tax bills for doing extra work on top of their contracted hours. The consultant was clear—and I agree, not least as a former Health Minister—that that extra work keeps the NHS running in the face of ever increasing demand.

I was told that, in certain circumstances, the marginal tax rate on earnings for the extra work is greater than 100%, which means that senior doctors working in my local hospital are in effect having to pay to do extra work. They are some of the most committed individuals in public service in our country, and I have had the privilege of working closely with many of them, but that is taking things a bit too far. It is clearly not a sustainable situation and, now that the huge tax bills are landing on doorsteps, it is causing a huge change in the behaviour of consultants at all levels in my local trust.

Another consultant told me that she has been an NHS doctor for 19 years and has worked as a consultant in my local trust for the last seven. She is employed on a full-time contract, with additional out-of-hours cover. Moreover, she regularly covers additional lists and shifts that require cover, sometimes at very short notice. She could not have been clearer with me that she is happy to provide that cover in the interest of safe patient care, which is of course what this is all about, as everyone has said. However, she has now been hit with a £30,000 tax bill, and she tells me that the only way she can avoid regular large tax charges, which may be for tens of thousands of pounds a year and which of course are in addition to her not insignificant income tax payments, is seriously to reduce the hours that she works for the NHS and not to take on any additional duties. As has been said, that goes to the heart of the issue. The consultant fears, as does her MP, that that is the conclusion that many of her colleagues will be forced to accept.

Let me again give some facts from trust level. Hampshire Hospitals NHS Foundation Trust recently ran a survey on the pension issue and received a healthy 2,500 responses. It is the case that 42% of all the respondents have reduced their work commitment; 20% have avoided promotion; and, critically, when the people were asked who might change working practices in the future, the figure goes up to 80%, including 33% considering early retirement and just over a quarter considering leaving the NHS altogether.

I have no doubt that the changes were introduced in good faith. They are aimed at top rate earners, as my hon. Friend the Member for Poole said, but in practice this has had a damaging effect on key people in the NHS, and if it is not sorted quickly, we will see that escalate further, and it will become harder and harder to retrieve the position. The suggestions put to me for fixing it include removing the annual allowance tapering. When I spoke during the urgent question earlier this month, a number of consultants from across my local trust and Poole and Southampton contacted me. They are pleased that the consultation, which I am sure my hon. Friend the Minister will say more about, is imminent, but what they fear from that is that the 50:50 fudge will just not work. We need wholesale reform, and the taper really does need to be scrapped.

In addition, I ask the Minister whether it is worth considering removal of the annual allowance taper for public sector workers. Of course, that is a decision not for him but for the Treasury and for whoever is inhabiting No. 10 in a few weeks’ time—I may be well placed to influence that, or I may be not at all placed. The point is this. If we want to make the NHS a great place to work, why not provide a tax benefit to working for the public sector—one of the biggest employers in the world? That is food for thought.

Let me finish in the same way as I have tried to make the whole of my contribution this morning—with a real-life example from Hampshire Hospitals NHS Foundation Trust of what we are seeing at trust level. In Winchester, like everywhere else and as I have set out, the Royal Hampshire County Hospital, one of the three hospitals in the trust, relies on many doctors and other senior staff doing additional sessions over and above their timetabled work in order to fill gaps in the medical workforce. Locally, we have seen that especially in radiology, where the additional sessions are used for radiologists to review scans and write the reports about what they see. The reporting of scans is clearly required so that patients can be told what the scan shows and clinical staff can work with patients on the most appropriate treatment.

My good friend from the Scottish National party, the hon. Member for Central Ayrshire (Dr Whitford), whom we will hear from shortly, and I spent many hours in this Chamber when I was the Minister with responsibility for cancer, and I was extremely proud to get the 75% stage 1 or 2 diagnosis ambition into the long-term plan, as announced by my right hon. Friend the Prime Minister. That is critical: early diagnosis is cancer’s magic key, as has been said by me and others many times in this Chamber. If we are to get anywhere near realising that ambition, we have to have a functioning, improved and expanded radiology service. Any reduction in radiology and the diagnosis stage will have an adverse impact and make that ambition unattainable, in my opinion. I am reliably told by my local trust that it has seen the backlog of scans waiting to be reported growing each week over the last few months. That concerns me greatly. It is of course just one department—it is an area that I know a little about—but it is a sobering example and one that we simply cannot ignore.

I shall finish by saying that we must act. I have so much respect for this Minister, but we need the Treasury to take this issue seriously and we need the next Prime Minister to act. If we do not, it will only get worse. We need to grip it, and we need to grip it fast.

[James Gray (in the Chair)]

Despite his late arrival to the debate, I call Mr Paul Sweeney.

09:57

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Thank you, Mr Gray, for your kindness in letting me participate in the debate. It is, as always, a pleasure to serve under your chairmanship. I apologise for my late arrival.

I congratulate the hon. Member for Poole (Sir Robert Syms) on securing the debate, and the hon. Member for East Renfrewshire (Paul Masterton) on also trying to press the Government on this matter. I have come to the debate because two consultants in my constituency came to me about this issue and I thought it important to communicate their views directly to the Minister. I hope that actions can be taken, because this is clearly a classic case of the law of unintended consequences.

One of those constituents, Dr Urquhart—the other was Dr Hepburn—wrote to me. Dr Urquhart has been a consultant in the NHS Greater Glasgow and Clyde area for nine years and is employed on a 48-hours-per-week, full-time contract, which includes being on call. He says that, following this change,

“I will have to drop the number of hours per week I work and also not take on any extra shifts which are paid…to cover rota gaps and waiting list initiatives which reduce the penalty to NHS GGC for waiting list breaches.”

In a sense, the change is penalising the efficiency of the NHS and introducing further costs to the health service that could be avoided. The consultant continues:

“Due to reduction in annual allowance for pension growth, the introduction of the tapering of the annual allowance coupled with the introduction of the 2015 NHS pension scheme, a growing number of doctors are facing four, five and six figure tax bills on top of their income tax and national insurance contributions. In my case this means that in the next year I expect a huge tax bill as in October 2018 I received a 10 year pay rise and will receive a large tax bill.”

He believes that it will impact on all consultants in NHS Greater Glasgow and Clyde and beyond.

It appears that the only way in which Dr Urquhart can avoid these large regular tax charges, which may amount to tens of thousands of pounds a year in addition to his income tax payments, is to reduce the hours that he works for the national health service. He fears that many of his colleagues will be forced to accept the same conclusion. He and his colleagues often go above and beyond to ensure that services can continue running safely and effectively, but there are limits to what can be reasonably expected of even the most dedicated doctors.

As a result of the current pension and tax regime, Dr Urquhart is effectively paying to provide additional services to the national health service. He hopes that these separate changes to tax and pension arrangements were an unintended consequence that was not appreciated when they were first introduced, that the resultant negative effects on the NHS workforce were unintended, and that the Treasury will undertake to correct them. Like many services, his department relies on consultants working regular overtime through additional programmed activities.

Unless the Government take action, many doctors like Dr Urquhart will be left with no option but to reduce their working hours significantly. Other consultants in the national health service in Glasgow are being advised to take early retirement to avoid these taxes. That will exacerbate an already acute workforce crisis in NHS Greater Glasgow and Clyde and seriously jeopardise the sustainability of the national health service. The impact on Glasgow’s Queen Elizabeth University Hospital —the largest medical facility in Europe—alone must not be understated. The topic is frequently discussed by his colleagues, many of whom feel the same.

I hope that the Minister will take cognisance of the issues raised by many consultants and the British Medical Association. Fundamental reform of the tax issue, particularly by scrapping the tapered annual allowance, is urgently required to prevent a workforce crisis. I hope that he will recognise the scale and immediacy of the risk to the national health service and that he will undertake to take our representations back to the Government and ensure that the problem is rectified as a matter of urgency.

10:01

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I declare an interest: I spent more than 30 years as a consultant in the NHS and am married to a GP, so naturally the issue affects us. However, it also affects many of our colleagues.

The first thing to hit was the lifetime tax allowance changes. In my husband’s practice, I saw GPs being driven out at the age of about 57 or 58. They had had no intention of retiring early, but they had been warned in their annual meeting with their accountant that, because of the taper, they would suddenly reach a high marginal tax rate of well over 50%, which naturally is not very attractive. The result, exactly as other hon. Members have laid out, is that we are losing the people with the most expertise—the people who train the new people.

It is important that we do not get carried away into thinking that the NHS is about machinery, buildings or gizmos and gadgets. Every one of those gizmos and gadgets is used by a person. It is people in the NHS who care for, treat and diagnose people. If we do not have the workforce, all the waiting times that we like to stand up and talk about will be completely shot. The workforce issues that all four UK nations face are being made worse by these problems.

Many people may think, “A £1 million pension pot allowance? What a great problem to have!” It is a great problem, but the difficulty is that in general practice, GPs reach a high salary quite early, unlike in a hospital where becoming a consultant takes 15 or 16 years, so people have taken out added years and bought extra service. Because we graduate late, it ends up being very difficult to work for 40 years and have a half-salary pension. We thought about buying added years—we looked at it twice, but we could never afford it.

It is the same issue that arose with the Women Against State Pension Inequality Campaign and with Hewlett Packard, Magnox and all the others: people are expected to commit to a pension in their early 20s, but when they get to the other end, the goalposts have moved. It hits them when they can do nothing about it but bail out—and that is what they are doing.

The lifetime tax allowance limit has already driven out consultants and GPs before the age of 60, but what makes the problem much more acute is the tapering annual tax allowance. As we have heard, it was introduced in 2010 at more than £250,000 to avert tax avoidance and gaming of the system. Senior medics in the NHS are probably the highest-paid people who do not run a business. They are on pay-as-you-earn, so they cannot play the game of writing off this, that and the other or paying themselves in weird ways; they just get their payslip, and the tax is taken. They are not in the tax avoidance game that was perhaps thought of when the taper was introduced. The commercial sector is defined contribution, not defined benefit; it is how the limits interact with the NHS, and probably other public service schemes, that causes the problem.

The annual allowance was reduced to £50,000 in 2011 and then to £40,000 in 2014. For those caught by the taper, the allowance can go right down to £10,000. The threshold is £110,000—not £150,000, which was the impression that the Chancellor gave at Treasury questions on 21 May. People hit a cliff edge, as hon. Members have highlighted: all of a sudden, they are caught in a system where they are taxed over and over on the same income. It particularly affects consultants, who are paid about £110,000 or more, and full-time GPs.

Those who have been caught out and hit by these bills are now talking to their colleagues. The result is that people are refusing promotion and refusing to take on the extra duties that are required in the NHS, such as becoming an education director, a manager of junior doctors or a clinical lead, because anything that could bring in extra income for extra work could suddenly push them over the threshold. Doctors cannot see in advance whether they will be hit, so they cannot manage things over the year.

Some of the bills that arrive have been absolutely horrendous. The average bill is £18,500, but many are getting towards £100,000. No one has that kind of amount lying around in their bank account, however much they are paid. Even trying to pay the bill has caused terrible problems. People are paying it either from already taxed income or by taking a loan on which they will have to pay interest—or they are using scheme pays, borrowing from their pension pot to pay off their bill and then having to pay the money back at non-commercial rates. That still reduces their final pension pot, because the money has technically not been in it for the same length of time.

[Sir Robert Syms]

A BMA consultant told me that an actuary has done some modelling and found that the penalties are so severe that somebody who works 48 hours a week and has to borrow money from their pot at the end will have a lower pension than someone who works 24 hours a week.

[Dr Whitford]

I thank the hon. Gentleman for securing the debate and for making that point. I have not seen that actuarial working, but it highlights how completely bonkers the scheme is. People are trying not to do anything extra; they are doing everything to stay below the threshold, because once they are over it, they get sucked into a Kafkaesque spiral that pulls them down to ridiculous levels.

Another problem for GPs in England is that they are not getting their pension statements because of issues with the system; I think Capita runs it at the moment, and we know how well it runs some of the other services that it has been asked to manage. Non-pensionable income is counted, which seems very weird for pension tax allowances. The notional growth in someone’s pension pot is also being counted as income. I am sorry, but income is income; it is what someone earns or receives, not what might be sitting in their pension pot for them to gain in 10 years. All these problems are catching doctors out, because they cannot see them. As they have begun to suffer, all they can do is ensure that they stay below the threshold.

The former junior Health Minister—the hon. Member for Winchester (Steve Brine), with whom I have spent many hours in this Chamber—highlighted the fact that 80% of people affected will change practice. That is leading people to refuse anything that will lift up their income—not only promotion and extra duties, but extra sessions. Many of those who are in their early to mid-50s are talking about retiring, which would be cataclysmic. The survey that he mentioned shows that some 30% are already considering doing so.

Between six and seven years ago, we were suddenly hit with a doubling of our pension contributions—from about 6% to about 14%—which meant that my take-home pay went down. Here we are, six or seven years later, being punished because our pension pots are too big. It is completely bizarre.

The problem is that we cannot afford for those who are affected to retire. Every time we discuss workforce, we talk about recruitment and retention. These people are the ones who will train the new recruits, and we need to hold on to them. As has been mentioned, the measure is not devolved but its impact is devolved in health. Only this place can sort out the pensions mess.

I am really disappointed that we do not have a Treasury Minister listening to this debate, and I hope that at some point we will have a debate to which a Treasury Minister responds. The Minister for Health, who is here today, will have to gather our comments and take them to the Treasury, and we would rather communicate directly with the Treasury. This issue has to be sorted, or there will be an absolute workforce meltdown within the next two years.

10:10

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I congratulate the hon. Member for Poole (Sir Robert Syms) on securing this important debate, and I underline the fact that I am a shadow Treasury Minister responding on behalf of the Opposition.

We are here today to discuss the impact of changes to allowances on tax relief on pensions specifically in regard to NHS pensions. As people in this Chamber will know, in 2016-17, an estimated £38.6 billion in tax relief was provided on contributions to approved pension schemes; obviously that is the overall figure and does not cover just those who work for the NHS. It is a very substantial amount of relief.

As I am sure Members will also know, the last Labour Government introduced the annual allowance and lifetime allowance back in 2006. The annual allowance was initially set at £215,000 and the lifetime allowance at £1.5 million. Since then, as other Members have discussed, we have seen gradual reductions. Under the coalition Government and the Conservative Government, the lifetime allowance was reduced from £1.8 million to £1.5 million in April 2012, then to £1.25 million in 2014, and to £1 million in April 2016. It has actually floated up a little bit with inflation up to 2019-20, when it will be—as has been mentioned—£1,055,000. There has been a similar trend with the annual allowance, which was reduced from £255,000 to £50,000 in April 2011 and it then went right down to £40,000 in 2014.

Of course, the particular changes that we have focused on today are around the interaction of all of these measures with the taper, which George Osborne introduced in the summer Budget of 2015. From April 2016, the annual allowance would be tapered at a rate of £1 for every £2 of taxable income, including pension benefits and not subtracting employee pension contributions, received over £150,000 in adjusted income, going right down to £10,000 for those with an income of more than £210,000. As has also been mentioned, that final change affects those people whose pay is more than £110,000 a year, excluding pension benefits and employee pension contributions, and who see an increase in their pension benefits of more than £40,000 in a given year.

As my hon. Friend the Member for Newport West (Ruth Jones) said, and the hon. Member for Central Ayrshire (Dr Whitford) underlined, all that obviously amounts to a considerable number of changes in a very short time. So we have seen the tax treatment of pensions for all high-paid workers changing very substantially, indeed in a way that they probably could not have envisaged when they first joined their pension scheme. The hon. Member for Central Ayrshire was right to indicate the parallels between this situation and what has happened to several other groups of taxpayers.

I see that the Minister is kindly scribbling things down at the moment. I hope that he will pass on to his Treasury colleagues that it is simply unacceptable if, at the very least, these taxpayers do not receive adequate information about what their liabilities will be. I was deeply concerned to hear from the hon. Member for Central Ayrshire that, for example, people are not receiving their pension statements. Surely that is the very minimum that is required.

On principle, it is surely necessary for the pension allowance to decline gradually for those people who earn very high incomes. It is fair, and consistent with other core principles of our tax system, that tax charge exemptions should be reduced for people who have very high incomes. However, there is of course the issue about the interaction of that system with other pension schemes, especially the NHS pension scheme, and given the fact that we have a very tight labour market for those in the NHS with substantial expertise. As has been mentioned, about 30% of doctors earn £110,000 or more, and nearly 10% earn more than £150,000. Clearly, this group of staff are the people who have the necessary expertise, as has also been mentioned a number of times.

I am aware of course that official representations have been made on this issue. We have heard what has been stated by the British Medical Association and the British Dental Association, and I think that the polling to which the hon. Member for Winchester (Steve Brine) referred was very interesting in that regard. It was also helpful to hear from my hon. Friend the Member for Glasgow North East (Mr Sweeney) about the impression that he received from his local NHS trust about what is going on.

When we consider this issue, it is very important that we do not just talk about tax treatment; we must also consider how it inter-relates with what is a very complex NHS pension scheme, one that, as I understand it, was not fully consulted on with representative organisations when it was introduced.

As has been mentioned, we now have three different schemes, and my hon. Friend the Member for Newport West indicated how working out how these schemes relate to each other and how that will impact on tax outcomes is very difficult for individuals. As the hon. Member for Poole rightly said, the impact of these changes—related to this combined test of both the threshold and the annual income, plus the taper—makes it very difficult for individuals to work out what their liability is without any kind of professional help. Of course, that professional help is also expensive.

We need to look at NHS pensions, and I hope that it will be possible for the Minister to take that issue away and discuss it with his Treasury colleagues. However, I will just say to those in this Chamber that, as well as talking about the problems for high-paid NHS staff, we of course also need to look at the issues for low-paid NHS staff. The pension situation is quite concerning for them. The annual report on retirement by Scottish Widows indicated that overall one in five young people are saving nothing for their later life, and many of those people who are working in our NHS on low pay have opted out of pension schemes, because they feel that they need the cash now to make sure that they can make ends meet.

A freedom of information inquiry in 2018 found that more than 245,000 workers from across the NHS in England had opted out of the NHS pension scheme in the previous three years. A lot of those were low-paid workers, so that is enormously concerning. Although I agreed with much of what the hon. Member for Winchester said, I do not agree with him that the levels of resource currently being considered by his Government will be adequate in the future.

Let us consider the current situation. We obviously have the cumulative impact of the pay cap over many years. The Government finally saw sense on that, but it took them a long time to do so. There are also groaning waiting lists, extended waits for accident and emergency, and the rationing of NHS services, with many procedures no longer being offered by the NHS. Until we see a change in that situation, it will be difficult for many of us to argue that the NHS is heading in the right direction resource-wise.

I know that the Government have made a commitment to improve funding in the future, but the Opposition continue to believe that that commitment is not sufficient.

[Steve Brine]

My point was that the NHS long-term plan has been significantly funded, with record funding, which, for the record—seeing as the hon. Lady has gone there—is significantly more than was promised by the Opposition. Yes, other resources will be required, around public health for instance, and around the people plan, but perhaps the hon. Lady can tell us what Labour’s fiscal promise is to the NHS, and how it will be paid for.

[Anneliese Dodds]

Absolutely. I am grateful to the—

[James Gray (in the Chair)]

Obviously, in the context of the debate.

[Anneliese Dodds]

Great. I will keep it within the context of the debate as much as possible, because in fact this debate is around taxation—

[James Gray (in the Chair)]

Order. The hon. Lady will not keep it within the context of the debate “as much as possible”; she will keep it within the context of the debate.

[Anneliese Dodds]

I certainly will, Mr Gray. Thank you.

As I was saying, this debate is broadly around the contours of the taxation system and how they affect high-paid workers in particular. I am sure that the hon. Member for Winchester is aware that Labour has a different approach from that of the current Government around progressive taxation. We set out our proposals at the last general education: we indicated how, by increasing the tax paid by the very best-paid workers, we would free up the resources that are necessary. I am sure that he has seen what Labour produced in that regard—in particular, we would not pay for the boost in spending that the NHS needs only through a short-term windfall, which in practice is what the Chancellor did, because all the commitments that the Government made to the NHS were as a result of lower than projected spending and higher than projected taxation receipts.

That is not a sustainable way to fund our NHS in the long run. Instead, we should look at the longer-term measures that are necessary, which is exactly what we have been doing.

We need to ensure that NHS workers on lower incomes can save properly for retirement, but we also need to look at the situation that has been the focus of today’s debate. We need to focus on the changes that were made in the 2015 pension scheme, and how they interact with the variety of alterations that have been made to tax release. It is especially important to do so in the context of staff retention, and I understand the comments that Members have made about that topic. We have a particular problem with NHS staff leaving their jobs early, which in my experience is not merely because of these issues, although of course they are important. When I talk to senior staff in the NHS, they also mention stress, a general lack of resource, having to deal with short-term changes such as operating theatres being closed because of a lack of staff, and so on. A whole variety of features is driving those retention problems.

[Dr Whitford]

I accept that there are many other issues, and obviously all four UK health systems are stretched because workforce is their No. 1 issue, but this problem comes on top of that. People who feel stretched—people who feel they have a terrible work-life balance, who are working late and so on—suddenly find that the extra sessions they do are costing them money. That is a final slap in the face.

[Anneliese Dodds]

I am aware of that; for many, this issue can be the straw that breaks the camel’s back, especially when it is not anticipated.

I hope that the Government will look carefully at the impact of threshold effects, particularly cliff edges that lead to radical changes in the amount of tax paid, which is a significant problem with the UK tax system generally. The situation for incurring VAT is analogous to this one: small businesses are deliberately staying below the threshold because as soon as they go over it, they have to start paying VAT—not necessarily at a very high rate, but with all the bureaucracy and so on that comes with it. This situation is very similar: there is that cliff edge, where tax treatment suddenly becomes very different from what it was before.

In the long run, Government should aspire to learn from the best of what happens in other countries that have a more granular approach; where income is more tightly tied— and sometimes entirely tied—to tax treatment, so that as one’s income goes up, tax liability goes up stepwise. That seems a very sensible approach, but of course, getting there is a long-term aspiration. In the short term, I hope that the Minister—who I know is an open-minded person—will ask his Treasury colleagues to sit down with the experts and representative organisations, and talk to them about how these problems arise because of the interaction of the complex pension system with the complex treatment of tax release, so that there can be some kind of short-term fix with a view to, in the long term, having a much more rational approach to tax release on pension contributions.

10:23

[The Minister for Health (Stephen Hammond)]

As ever, Mr Gray, it is a pleasure to see you in the Chair for this important debate, and I congratulate my hon. Friend the Member for Poole (Sir Robert Syms) on securing it. It is a topic that the House has previously considered, when my hon. Friend the Member for East Renfrewshire (Paul Masterton) introduced a debate on the matter.

Colleagues should be reassured that the Government have been listening carefully to senior doctors and their employers. We recognise the actions clinicians are taking in response to their concerns about, and experience of, the annual allowance tax charges and how they are affecting frontline services. My hon. Friend the Member for Poole is right: although we are talking about tax changes for consultants, clinicians and GPs, the reason why this is so serious is that ultimately, if we do not get it right, it impacts on the quality of patient care. We all share that ambition to get it right.

[Mr Sweeney]

The Minister says that the tax changes are likely to have an impact on patient care. They are already having an impact; my constituent has said that he is seeing anaesthetic cancellations on theatre lists at his hospital in Glasgow, which have never been seen before in the NHS. He has had to resign as a foundation programme director, supervising junior doctors, to reduce the number of paid hours he does.

[Stephen Hammond]

Let me make it clear that not only are the changes having an impact, they are likely to continue to have an impact. I recognise that; the hon. Gentleman will hear later in my remarks that we recognise that point.

My hon. Friend the Member for Poole was right to talk about the long-term plan and the cash settlement that goes with it. He was also right, though, to mention that any plan will work only if it works: if we make sure the people delivering it can do so with the numbers and experience required. The hon. Member for Newport West (Ruth Jones), although she said she was not expecting to speak this morning, made a thoughtful speech and raised a number of issues from her direct experience that informed the debate.

My hon. Friend the Member for Winchester (Steve Brine) represents the place where I was born and spent my childhood, so for that and other reasons, I always listen carefully to what he says. He was right to stress at the start of his speech that this is not about tax breaks for particular people, although that is the headline; the reality is that perverse disincentives are being created against providing the care that we need. I listened carefully to the hon. Member for Glasgow North East (Mr Sweeney), who has just intervened on me to reiterate the point he made in his speech about the experiences of some consultants, and I recognise that those experiences are not unique to Glasgow North East.

The hon. Member for Central Ayrshire (Dr Whitford) always makes many informed remarks, given her experience. She made a point that perhaps has not been picked up, but is important in informing the debate: this is not just about losing a number of potential outpatient appointments and clinicians to service them, but about the impact on training. In many of the places that I have had the honour to visit as Health Minister, it is clear that the mentoring and support provided by senior staff to more junior staff is an important contribution, not only to the wellbeing of those junior staff, but to their education and, therefore, to the benefit of patients. That is undoubtedly one of the consequences of what we are talking about today.

[Dr Whitford]

Obviously, senior clinicians are critical to clinical teaching, which is part of the work. However, as other Members have highlighted, consultants are refusing to take on the extra sessions involved in organising that teaching and running rotas for either junior doctors or medical students. Without that, it will just be chaos.

[Stephen Hammond]

The hon. Lady is right to make that point; as I said in my remarks about her speech, I recognise the impact on training. There is clearly concern that unless we address this matter, it will have a number of impacts, of which that is one.

The hon. Member for Oxford East (Anneliese Dodds), speaking for the Opposition, rightly opened her remarks by pointing out the scale of the cost of tax release for pensions to the Treasury. She made valid points about doctors’ knowledge about that liability, and about the interaction of core tax principles with particular schemes. I was rather hoping that she would also welcome the long-term plan and the cash settlement, but I suspect that element of unity was probably a step too far.

As my hon. Friend the Member for Poole may have mentioned at the beginning of his speech, we have fewer Members here and a lower number of contributions. However, those contributions, combined with some of the interventions, have meant that we have had a debate of high quality.

Needless to say, I have heard the representations from everyone in the Chamber. It will not surprise anyone that I have received, as has the Department, representations from NHS employers reporting exactly what we have been discussing—that consultants are increasingly no longer willing to work additional sessions. The lost capacity is clearly difficult to replace, especially in some clinical areas where there are already shortages, and it can be expensive, as employers can pay a premium for locums to fill the gap. It is obvious and right that where there is evidence of an impact on the delivery of services, the Government should be prepared to take action.

At the outset, I reiterate that the Secretary of State and I take seriously the concerns of doctors. That is why we have been involved in a number of discussions with the Treasury, which has resulted in the 50:50 flexibility and the consultation. I will come to that in a moment, but, as Members will hear as I develop my remarks, that will not be the end of our conversation with other Departments.

Looking at the case for pension flexibility, it is true that outside public service, employers in some cases have flexibility to adjust benefit packages to allow high-earning employees to target a lower level of pension saving and so reduce the potential for large regular annual allowance tax charges. That flexibility is not currently present in the NHS. The NHS pension scheme does not allow any flexibility over the level of pension growth. Staff who participate in the scheme must pension all regular earnings from their employment. The Government are right to take the view that it is important to ensure that staff have a good level of pension savings, but senior clinicians, particularly consultants and GPs, have a unique degree of flexibility over their workloads and obviously can reduce their commitments. Consultants can reduce the number of additional sessions undertaken, and many GPs are self-employed. That can create incentives for clinicians to seek to control their income and pension growth by limiting or reducing their NHS work to avoid breaching their annual allowance. As a number of Members have discussed, that clearly has an impact on the delivery of patient care.

It is clear that retaining and maximising the contribution of our highly-skilled clinical workforce is crucial to the NHS and the long-term plan for the NHS. While any pension tax regime should seek to achieve the fiscal ambition of distributing pension saving incentives fairly, it has to be recognised that, in combination with the fixed structure of the NHS pension scheme, that could produce—listening to the evidence today and the evidence I have directly received—unintended consequences for service capacity and the delivery of patient care. The Government are prepared to change the rules to give clinicians more flexibility.

Alongside the publication of the “Interim NHS People Plan” earlier this month, my right hon. Friend the Secretary of State announced our intention to consult on new flexibility for clinicians. The consultation will be published in the coming days—I hope very shortly—and will set out proposals for a 50:50-style option, offering 50% pension accrual and halved contributions. Earlier this year, as part of the new five-year GP contract, the BMA and NHS England asked the Government to consider introducing that option. While I recognise that the BMA has not been unequivocal in its support, it has welcomed the proposal as a step in the right direction.

The Government believe that a 50:50 option balances the benefit of flexibility with the fiscal impact to the Exchequer. The 50:50 option will allow clinicians to build up their pensions more slowly and at a lower cost. Clinicians will still need to make their own personal assessment as to whether their financial interests are best served by taking advantage of the 50:50 model or continuing with full-rate accrual, but I have heard—not necessarily in the debate today, but directly from a number of consultants—that the 50:50 option is not flexible enough and that other measures should be considered.

The new pension flexibility should be viewed as a positive development for clinicians. My hon. Friend the Member for Winchester mentioned that he has asked me about the consultation period on the Floor of the House and that he has spoken to consultants about it. The consultation will be an opportunity to listen to a range of views before any final proposition is agreed. I encourage all Members here today to encourage their local clinicians to take part in that consultation. Equally, I encourage anyone from the health system in its widest context to take note of the debate and take part in the consultation. We want not only to hear any suggestion that there is a generic case for tax changes, but to listen carefully to what clinicians say using their own personal examples to provide evidence for any change they seek.

[Steve Brine]

Is the consultation discussing the merits or otherwise of a 50:50 option, or is it genuinely open to discussion about whether that option in itself is a good idea? As I said in my speech, the initial responses I have seen have not broadly welcomed, to put it politely, the idea of 50:50.

[Stephen Hammond]

The consultation is both. I recognise, as I said a few moments ago, that the 50:50 option has not received unequivocal support from the BMA, but to its great credit, it has asked us to consider that. We have come forward with this proposal. The BMA has welcomed it, but has said that it would want to discuss further options for flexibility and other pension matters. We have said that the consultation will look at the merits of the 50:50 option—or question it—but we will rightly open up that consultation to other suggestions. My hon. Friend will have just heard me say that I hope Members will encourage their local clinicians to use the consultation as a way of expressing their concerns about the 50:50, if they have any, and to express their views on other measures they would like to see introduced in terms of pension contributions. I stress that point again in response to his intervention. He will probably be interested in my next set of remarks, which are on flexibility.

Although the 50:50 option provides a new flexibility, we recognise that it does not provide unlimited flexibility for clinicians to target their own personalised level of pension growth and contributions. The financing model for the scheme means that any flexibility that reduces contribution income has an immediate fiscal impact on the Exchequer. The 50:50 option does not set aside the annual and lifetime allowance tax policies, but will give clinicians a new flexibility to manage their pension growth.

Where 50% accrual reduces pension growth by more than they wish, clinicians can use the contribution savings from the 50:50 model to buy additional pension to customise their own pension growth incrementally. Additional pension can be purchased in units of £250. That clearly adds some flexibility to their ability to manage their own contributions. However, some clinicians may continue to experience annual allowance tax changes, even with accrual rates reduced to 50%. For that group, while 50:50 reduces the charge, it does not eliminate it. We recognise that a number of individuals may wish to target a lower level of pensions growth. We will listen carefully to that suggestion through the consultation.

[Dr Whitford]

Is the Minister suggesting that senior consultants in three pension schemes sit and manage whether they are going to use the 50:50 or add in top-ups? That creates a whole job for people who work often 50 to 60 hours a week doing the thing that they are actually meant to do; it would give them almost a side job to try to manage their pension. Could we not go back to something simpler, whereby they get their payslip with a fair amount of pension tax taken off, but not what is happening at the moment?

[Stephen Hammond]

I have listened carefully to what the hon. Lady has just said, and she will want to listen to my next remarks, but I think she will reflect on the fact that a system of annual and lifetime allowances has been in place for some time. They were first introduced by the previous Government, although there have been some changes. Whether or not she thinks it would be better to have an even simpler system, some people will have recognised over time that it is important to look at their own pension contributions. Although tax relief on pensions is one of the most expensive reliefs, and the NHS pension scheme is rightly one of the better schemes available, I absolutely recognise that annual allowances and negative tax rates have a huge impact on some clinicians and consequently on the services for patients.

Consultants have raised with me the issue of the tapered annual allowance that Members have spoken about. I have been asked why the taper threshold is currently set at £110,000, which cuts across, as many people have pointed out, the typical earnings of an NHS consultant, although some people might perceive £100,000 as a high level of income. Unsurprisingly, tax policy is not something that I can speak to, but I have asked the Treasury and it advises that the threshold income test is designed to ensure that only those on the highest incomes can be affected by the annual taper. In the Treasury’s opinion, the £110,000 threshold balances the desire to restrict the annual allowance taper to those on the highest incomes, while trying to minimise the reduction in the value of the individual’s annual allowance.

I have also been asked why the annual allowance taper calculation takes into account both pensionable and non-pensionable earnings. Again, with the obvious proviso that I cannot design tax policy, the Treasury advises that if non-pensionable pay is excluded from the annual allowance taper calculation, there is the possibility that an unscrupulous employer could reclassify some pay as non-pensionable. To ensure fairness, the Treasury includes all sources of income in the taper calculation. However, hon. Members will not be surprised to hear that I think the concern about unscrupulous employers is not one that applies to the NHS. I recognise the issues raised by hon. Members on behalf of their consultants with regard to the taper threshold, and I am grateful to the Treasury for the discussions we have had, which have resulted in the 50:50 flexibility, but I can assure hon. Members that that discussion has not concluded. We rightly recognise that other pension issues need to be resolved.

I am grateful that the Treasury continues to engage with concerns about the taper threshold and how it impacts upon the workforce. I am happy to assure hon. Members that the Department intends to continue having discussions so that the matter can have a resolution that we hope will sort the matter out in an equitable and fair way, and not only for tax principles. We want to ensure that the dedicated staff working in the NHS feel valued and understand that they will not be penalised through the creation of perverse incentives so that they do not do what we want them to do, which is to provide excellent patient care.

In closing, I again thank my hon. Friend the Member for Poole for raising this important issue. I hope that I have been able to do three things: first, show hon. Members that the Department and I as the Minister responsible for people in the health system recognise the concerns raised by hon. Members on behalf of their consultants. The issues have also been raised with me directly. Secondly, I hope people will recognise that the 50:50 option is an important first step in looking at issues associated with lifetime contributions. I urge hon. Members to encourage their consultants to use the consultation. Thirdly, I recognise there are still issues around the taper threshold and the annual allowance, and I give the Chamber a commitment that the Department will continue to discuss with the Treasury ways in which we might be able to resolve those matters. I conclude by reiterating how important the debate has been this morning.

10:46

[Sir Robert Syms]

The lifetime allowance and the annual allowance have not created the crisis. The reduction in the limits has not created the crisis. If all we had at the moment was an annual allowance of £40,000, or a lifetime allowance of just over £1 million, the NHS would be living with that. What has caused the problem is the taper, and the taper’s impact on the way in which people do their business. Initially, it is changing behaviour. If it is not fixed, it will do real damage to the NHS. I know the Department of Health understands that and I hope the Minister will make representations to the Treasury. If he gets moved and promoted soon, perhaps he will leave a note to his successor and send a note to the Treasury saying that unless they fix it soon, the cost of fixing it for taxpayers and for patients will be far higher. I thank everyone for contributing.

Question put and agreed to.

Resolved,

That this House has considered NHS pensions, annual and lifetime allowances .

10:47

Sitting suspended.

Heated Tobacco

Wednesday 26th June 2019 Westminster Hall

09:15

[Mr David Jones (Clwyd West) (Con)]

I beg to move,

That this House has considered Government policy on heated tobacco.

May I say how pleased I am to serve under your chairmanship, Mr Gray? I immediately declare my interest as an honorary life fellow of Cancer Research UK.

Smoking remains a terrible public health problem in the United Kingdom. The Government recently referred to it as the “continuing tobacco epidemic”. It is the country’s principal cause of cancer and single greatest cause of preventable illnesses and avoidable deaths. Some 7.4 million people in this country smoke, and smoking is the cause of around 100,000 deaths every year. There is a mistaken perception that the problem of smoking has largely been addressed, which might be because smoking, like many other societal ills, does not affect everyone equally. The smoking rate remains around 25% in many of the poorest areas of the country, whereas it is around 5% in more prosperous areas. In my constituency of Clwyd West, the rate is above the national average, at 17% to 18%.

The Government are to be commended for their achievements on smoking, and indeed for their ambitions for the future. Since 2010, Conservative-led Governments have brought the smoking rate down from 20.2% to 15.5%, which is a significant accomplishment. The Government are to be applauded for their ambition to lower smoking rates to 12% by 2020. Although they have not set yet a target date, the Government aim eventually to create a smoke-free generation, which they define as less than 5% of adults smoking. However, the challenge today is far greater than it was a decade ago, because smokers with a higher level of motivation to quit will have done so already. Those who remain have withstood years of public health campaigns and societal pressures, as well as the rise of e-cigarettes as an alternative to smoking.

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Gentleman on bringing this important matter to the House for consideration. Does he agree that advice must be provided first about smoking cessation, rather than about vaping or any other alternative method? Does he also agree that although there are no long-term indications of the effects of vaping, whether burned or heated, the chemicals that are used will not be neutral, and there will therefore always be an element of concern and a need for greater research?

[Mr Jones]

Clearly, the ideal is for people to give up smoking altogether, but there are ways of reducing it. I will go into that in my speech. The hon. Gentleman makes a point to which I shall also refer: there is a need for research on the effects of alternatives to combustible tobacco.

E-cigarettes have had a revolutionary effect on efforts to reduce smoking rates in this country, and credit must go to the Government for facilitating that. E-cigarettes have had a highly positive impact on helping smokers to quit. In 2010, a particularly enlightened member of the behavioural insights team, David Halpern, influenced the Government’s decision not only to resist banning e-cigarettes—other countries were poised to do so—but to seek deliberately to make them more widely available. David Halpern advanced the principle of harm reduction: it is more effective to give somebody a reduced risk product than to insist unrealistically on immediate total abstinence. An expert in harm reduction, Professor Gerry Stimson of Imperial College, has supported that argument, pointing out that it is easier to persuade people to do something if that thing is enjoyable rather than a painful chore. He said:

“For those trying to stop smoking, e-cigarettes have profoundly changed the experience. For the first time quitting cigarettes is no longer associated with being a ‘patient’ and personal struggle.”

[Mark Pritchard (The Wrekin) (Con)]

I am grateful to my right hon. Friend for securing this important debate. As a non-smoker, I think there is nothing worse than sitting outside a café in London or Shropshire and having my lungs full of somebody else’s smoke, or indeed trying to walk to Parliament and taking in a street full of smokers’ smoke. Having said that, I am a libertarian—if people want to smoke, they should be free to do so. His substantive point on public health education is absolutely right: the campaign against smoking is not over. In my constituency of The Wrekin, 19,000 people still smoke. Does he agree that public health is important?

[Mr Jones]

I do indeed. I will also comment on my hon. Friend’s point about other people having to endure smokers’ smoke. One point that the Government make in their response to the Science and Technology Committee’s report is that heated cigarettes are far less offensive to other people than combustible cigarettes.

Consumers’ principal reason for using e-cigarettes is to give up smoking. According to Action on Smoking and Health, 62% of ex-smokers use e-cigarettes for that purpose, and the majority of users have successfully quit smoking. However, it might well be that we have now passed the apogee of the e-cigarette effect. According to the Office for National Statistics, the number of new e-cigarette users peaked at 800,000 in 2013-14. Since then, the number has approximately halved every year, down to 100,000 in 2016-17. It is not the case that the remaining smokers do not want to quit; the ONS reports that nearly 60% do. For some, however, the experience of using e-cigarettes does not come sufficiently close to that of smoking to be an adequate substitute. In this context, I urge the Government to consider the alternatives.

In Japan, heated tobacco is proving very successful in helping smokers to quit. Evidence there shows that 70% of heated tobacco users give up smoking altogether. That is a better conversion rate than for any other alternative nicotine-containing product on the market.

[Mr Charles Walker (Broxbourne) (Con)]

I have been a smoke-free person for 15 years, but it took me 12 years to get there. I had various failed attempts to give up smoking because it was a choice between smoking and chewing gum, which really was not a successful pathway—it took me 12 years before I could finally give up. Any method that helps the process has to be a good idea.

[Mr Jones]

I am very pleased to hear that. Of course, it is debatable whether chewing gum is more or less antisocial than smoking—particularly in its effect on pavements.

The heated cigarette process uses an electronic device that heats tobacco, producing an aerosol that tastes like tobacco, and it delivers nicotine in a similar way to a cigarette. Importantly, however, it is not a product of combustion. Tests on heated tobacco carried out by the tobacco industry and scrutinised by the Committees on Toxicity, Mutagenicity and Carcinogenicity of Chemicals in Food, Consumer Products and the Environment found a reduction of up to 90% in the number of toxic chemicals emitted by heated tobacco compared with combustible cigarettes. That is not greatly dissimilar to Public Health England’s finding that e-cigarettes are up to 95% safer than combustible cigarettes.

Heated tobacco is currently sold in the UK, but there is no independent research to validate its use. Members of Parliament have said that research is needed, and the Government have agreed. As I mentioned a few moments ago, the Science and Technology Committee’s July 2018 report highlighted the need for independent research. It identified the opportunity for the Government to

“help fill remaining gaps in the evidence on the relative risks of e-cigarettes and heat-not-burn products”

and support a long-term research campaign that would be overseen by Public Health England and the Committee on Toxicity to ensure that health-related evidence is not dependent solely on the tobacco industry.

The Government’s December 2018 response to the report was favourable. They accepted the recommendation and undertook to

“review and consider where there are gaps in evidence for further independent research”.

They went on to say that they are

“committed to providing the outputs of research to the public on the risks of e-cigarettes and novel tobacco products.”

They also committed to including heated tobacco in their annual review of e-cigarettes. However, this year’s e-cigarette review contained no mention of heated tobacco.

We are falling behind our international peers on this front. The United States Food and Drug Administration recently produced research that concluded that heated tobacco is

“appropriate for the protection of the public health because, among several key considerations, the products contain fewer or lower levels of some toxins than combustible cigarettes.”

It reported up to 95% lower quantities of certain toxins.

My question to the Minister is this: will the Government commit to producing or supervising independent research into heated tobacco this year? We are talking about a matter of personal choice for smokers, but the Government have a duty to inform them about the available alternatives. We have seen the value of e-cigarettes in helping people to quit smoking, and if there is a prospect that heated tobacco could help to bring down smoking rates further, are we serving the interests of public health by not carrying out the promised research? Might not an approach akin to the innovation principle, as opposed to the precautionary principle, ultimately lead to fewer smokers? If it might, should we not, like David Halpern, seize the opportunity?

The research will not happen by itself. The responsibility to produce it lies with the Government, as they have acknowledged. From 1 July, we will be acknowledging heated tobacco in the tax system. Is not now an appropriate time for the Department of Health and Social Care to ensure that the new tax category goes hand in hand with independent research on the efficacy of heated tobacco in bringing down smoking rates and its impact on public health? It may be suggested that the lack of funding is an issue, but I urge the Government to consider requiring tobacco companies to pay for the research to be carried out, thereby circumventing the need to apportion departmental budgets to it.

The reduction of harm from smoking must remain a top priority for this and any other Government. I therefore hope that the Minister will respond positively to my suggestion.

11:12

[The Parliamentary Under-Secretary of State for Health and Social Care (Seema Kennedy)]

It is a pleasure to serve under your chairmanship, Mr Gray. I thank my right hon. Friend the Member for Clwyd West (Mr Jones) for raising the important issue of heated tobacco products and their contribution to reducing harm from smoking, and for his lifelong service as a fellow of Cancer Research UK. He put it very well: smoking is still prevalent in certain communities in our country, and still causes over 78,000 deaths a year in England. It is one of the leading causes of preventable illness and premature death. We have made great progress, particularly over the past 10 years. Adult smoking prevalence is now 14.9%—the lowest ever recorded level—but, as he pointed out, we have much further to go, particularly among certain groups and in certain parts of the country.

In the 2017 tobacco control plan, we set out our ambition to reduce smoking and ensure a smoke-free generation. Part of that strategy is about helping people to stop smoking by adopting the use of less harmful nicotine products. They may, for example, take up chewing gum. I have never seen my hon. Friend the Member for Broxbourne (Mr Walker) spit out his gum on the pavement.

[Mr Charles Walker]

I quit 15 years ago, but it took me 12 years because the only choice besides smoking was nicotine gum, and it was simply revolting. I would have quit a lot earlier if we had some of these modern products around 15 years ago.

[Seema Kennedy]

I hear what my hon. Friend is saying. For a lot of people, nicotine substitutes are a good transition to giving up smoking or other things completely. We have seen a dramatic rise in the use of e-cigarettes from 1.6 million users in 2014 to about 2.5 million in 2017. Encouragingly, about half of them in England have quit smoking completely. E-cigarettes are not risk-free, however. The evidence is increasingly clear that they are significantly less harmful to health than smoking tobacco. They can help smokers to quit, particularly when combined with stop smoking services. Recent studies have shown they can be twice as effective as nicotine replacement therapy in helping people quit smoking. As my right hon. Friend the Member for Clwyd West pointed out, the sales of e-cigarettes are plateauing, and we are coming to the stubborn 5% of people who are still smoking.

[Sir Kevin Barron (Rother Valley) (Lab)]

The Minister will know that expenditure on smoking cessation programmes has fallen rapidly in the past few years. I promoted a ten-minute rule Bill to put a levy on tobacco companies to fund smoking cessation programmes and research into less harmful products. The greatest problem we have had for many years—this is anecdotal at the moment—is that products such as patches and gums cannot get heavy smokers to quit. There is some evidence, although it is not firm, that heated products are a way of getting to people who have a real problem with addiction.

[Seema Kennedy]

The right hon. Gentleman makes an important point. Those of us who represent seats in the north and the devolved nations know that in some communities a very high proportion of people—particularly older men—are still smoking. Smoking cessation services are obviously part of the conversation about public health that the Department will be taking forward to the spending review.

My right hon. Friend the Member for Clwyd West has argued that it would be timely for the Government to commission independent research into heated tobacco products’ potential for harm reduction. Obviously, if the tobacco companies were paying for it, it would not be independent. The right hon. Member for Rother Valley (Sir Kevin Barron) has set me an interesting challenge on tobacco levies. The new levy is being introduced in a few days, and I will definitely keep that under review.

The primary focus of our research at the moment is e-cigarettes, because heated tobacco is still very new on the market in this country. We will keep it under review and we will monitor the evidence through Public Heath England’s reviews. I agree entirely that it is important to look carefully at the evidence of harm reduction. I assure the House that we are, and will continue to be, led by that evidence.

Heated tobacco products are regulated under the Tobacco and Related Products Regulations 2016 as novel tobacco, in accordance with the EU’s tobacco products directive. We know far more about e-cigarettes than we do about heated tobacco products. The research and evidence base is still in its infancy, and is mainly conducted by the tobacco industry. We asked the Committee on Toxicity to research the toxicological risks of heated tobacco products and compare them with those attributed to conventional cigarettes. It reported in December 2017, and the evidence suggests that heated tobacco products still pose a risk to users. There is likely to be a reduction in risk for cigarette smokers who switch to heated tobacco products, but quitting tobacco entirely is the most beneficial thing that anybody can do.

We have asked Public Health England to update the evidence base on e-cigarettes and other novel nicotine delivery systems annually. The PHE 2018 evidence review also had a comprehensive chapter on heated tobacco. It concluded the same as the Committee on Toxicity. As my right hon. Friend the Member for Clwyd West said, it stated that e-cigarettes are less harmful than heated tobacco. The latest PHE evidence review in February 2019 did not cover heated tobacco products, essentially because there was insufficient new evidence since the previous review in 2018.

My right hon. Friend pointed to the experience of other countries. I agree that we must look beyond our shores and learn lessons, but we must also acknowledge that there are different contexts in which heated tobacco products are used. For example, Japan has banned e-cigarettes, but it has introduced heated tobacco products, which have made an impact there. The Food and Drug Administration in the United States has permitted the sale of heated tobacco products, but is yet to pronounce on whether Philip Morris International may make claims of reduced risk for its IQOS product. I believe, therefore, that we need to be cautious about assuming that heated tobacco products are likely to find a large market in the UK.

I recognise that more independent research on heated tobacco products would be helpful for understanding their relative risks. The Department and its arms’ length bodies will consider research proposals in this field, but at present none has been forthcoming. I need to be clear that such proposals would need to demonstrate good use of public money. We will continue to monitor the international evidence and develop our policy as such evidence develops.

[Mr David Jones]

I have listened carefully to what the Minister has to say. It seems that the Government’s position now is identical to their position six months ago, when they published their response to the report of the Science and Technology Committee. Is that right? Has nothing moved?

[Seema Kennedy]

There is a definite need for more research to be done on heated tobacco products. Only through proper, independent research can we draw different conclusions. However, my right hon. Friend has raised a very important issue about these products, which are helping certain people in this country and other jurisdictions to quit smoking. He has set me a challenge and I will certainly ask my officials to look closely at the issue.

It is important to remember that heated tobacco products are tobacco products, and we must apply suitable caution. Although switching from traditional cigarettes is likely to reduce risk, the best approach is to quit entirely. The Government remain committed to helping people quit smoking and promoting reduced-risk products where it makes sense for smokers. We will continue to be driven by the evidence.

Question put and agreed to.

11:22

Sitting suspended.

EU Structural Funds: Least Developed Regions

Wednesday 26th June 2019 Westminster Hall

[Siobhain McDonagh in the Chair]

14:29

[Paul Blomfield (Sheffield Central) (Lab)]

I beg to move,

That this House has considered replacement of EU structural funds for least developed regions.

It is a pleasure to see you in the Chair, Ms McDonagh. I am grateful that this issue has been selected for debate. I thank colleagues across parties and regions for supporting the application, particularly the hon. Member for Truro and Falmouth (Sarah Newton), my right hon. Friend the Member for Cynon Valley (Ann Clwyd), who is not currently in her place, and my hon. Friend the Member for Redcar (Anna Turley).

The application for this debate followed a report by the Conference of Peripheral Maritime Regions that crystallised concern that our regions should not lose out as a result of the decision made in the 2016 referendum. I intend to speak relatively briefly because I want to give plenty of opportunity to colleagues from across the regions to make their points. I have only one question for the Minister, but I will come to it at the end.

The CPMR report estimated that if the UK had remained in the European Union, we would have been entitled to €13 billion, or £11 billion, of support from EU structural funds—primarily the European regional development fund and the European social fund—during the next period, from 2021 to 2027. However, five regions would be set to receive a bigger share of that funding based on our position as having some of the poorest areas in Europe. Those areas are defined as “least developed regions” because our GDP falls below 75% of the European average. Clearly, that is not something that we should be proud of and it needs to be addressed.

Cornwall and the Isles of Scilly, and west Wales and the valleys both already receive funding for that category.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

Does the hon. Gentleman accept that we have already contributed that money to the European Union and are getting it back?

[Paul Blomfield]

I agree. The European Union has demonstrated itself to be a very effective redistributive mechanism, taking from richer areas and redistributing to poorer ones. In my area of South Yorkshire, I imagine that we are a net beneficiary of that, although the UK as a whole is a net contributor.

Cornwall and the Isles of Scilly and west Wales and the valleys are already recipients of funding for that category, but have been joined by Tees Valley and Durham, Lincolnshire and my own region of South Yorkshire, because those three regions have now sunk below the 75% threshold, too.

In preparing for the debate, I consulted the House of Commons Library, which, as ever, provided excellent independent assessment and support—I commend those in the Library for the work that they always do for us—and confirmed the CPMR analysis. The Library said that, if anything, the CPMR report underestimated the position because it had not taken account of southern Scotland, which would have been eligible, and added that

“the ‘Outer London – East and North East’ region is also on the borderline”

for classification for support. The amount of funding for which UK regions could have been eligible may have been even higher than in the CPMR analysis.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

I will raise a point about the CPMR analysis that I was going to make during my speech, because it is hugely important to the hon. Gentleman’s argument. I saw a copy of the House of Commons Library briefing, which confirmed that the analysis said that some areas could see funding rise by 22%, but, as I am sure he knows, the European Union has said that it does not want funding to go up by more than 8% in relevant areas. I do not think that the Library covered that. That would be worth expanding on as the hon. Gentleman develops his argument.

[Paul Blomfield]

I will mention the 22% increase specifically as I proceed.

I am delighted that Members from across the regions that would have benefited are in the Chamber. Everybody will want to focus on the impact in their own areas but, as the Minister indicated, the projections indicate that the UK would be entitled to an increase of 22% in funding. I am sure that if we were a participating member, we would be arguing strongly to ensure that that assessment was matched in reality and that the funding came through.

The funding estimate is up from the €l0.6 billion that we received from 2014 to 2020 to approximately €13 billion. Part of the reason that the CPMR estimates that increase is that we would now have five less developed regions, compared with two during the current funding period. The analysis states:

“All five of these regions would stand to receive EU support in excess of 500 euros per capita for the seven-year period.”

On current figures, that would result in £605 million for South Yorkshire to support economic growth.

There is a sense of déjà vu, because South Yorkshire has been here before. When the Thatcher Government decimated our coal and steel industries, and our whole economic base with them, we became one of the poorest regions in Europe. The EU stepped in with funding that was critical to rebuilding our economy, funding projects decided by local politicians and delivered by local bodies.

We received £820 million of objective 1 funding—levering in matched funding—which was channelled into more than 250 organisations and 650 projects. That encouraged investment, stimulated the development of new growth and high-technology sectors, helped businesses to modernise and become more competitive, supported innovation, helped with the commercialisation of research, developed skills and provided infrastructure in the region. We saw real transformation in a variety of ways.

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

I congratulate the hon. Gentleman on securing the debate. In his calculations, has he taken into account any potential and likely changes towards the end of the seven-year period? With yet more additions to the EU of companies that would be net beneficiaries, the funding structure would change for the UK and other countries that happened to be part of the EU at the time.

[Paul Blomfield]

I thank the hon. Gentleman for his intervention, but that is not part of the CPMR analysis, nor has the House of Commons Library suggested that it is a factor that should be taken into account.

In South Yorkshire, we saw real transformation. The advanced manufacturing park at Waverley—a partnership led by University of Sheffield with Boeing and Rolls-Royce—was held up by the Government as a flagship of growth through innovation. It was dependent on that funding and would not have got off the ground without it. That is just one example of the work in developing clusters, alongside advanced manufacturing and metals, investment in bioscience, creative and digital industries and environmental and energy technologies.

The funding was involved in the remodelling of the primary gateway to Sheffield in my constituency, by developing the station and the main pedestrian route into the heart of the city, and played a key role in making the city a more attractive place in which to invest. There was improved access to finance for small and medium-sized enterprises, which supported start-ups, scale-ups and incubator units such as the Quadrant Business Centre. Community projects in my constituency, such as Matrec and Zest, were funded for programmes to build the skills needed in a changing work environment.

Across South Yorkshire, there was investment in new roads and transport infrastructure.

[Nick Smith (Blaenau Gwent) (Lab)]

In Blaenau Gwent, the structural funds have made a big difference, particularly for transport, with the dualling of the heads of the valleys road. However, there is still bags to do, such as improving the Ebbw Vale train line to get more services to Cardiff. Does my hon. Friend agree that the Minister needs to confirm how much funding will be available and by when, particularly in advance of the spending review, so that we can get not only better trains from Ebbw Vale to Cardiff, but a boost to the local economies of our regions?

[Paul Blomfield]

My hon. Friend is absolutely right, in particular about investment in transport infrastructure. Without that, the wider area of my hon. Friend the Member for Barnsley Central (Dan Jarvis) would have seen none of the road network in the Dearne valley that facilitated growth, with a whole series of new companies and the new jobs to go with them. My hon. Friend the Member for Blaenau Gwent (Nick Smith) is also right—he pre-empted my final question—to say that we need exactly that assurance from the Minister.

In South Yorkshire, the objective 1 funding worked: our economy grew by 8.5%. However, regional inequality has soared again since 2010. We are back in the same situation, qualifying as a least developed region and eligible for the highest level of EU funding had we been continuing as a member.

I know that the regional disparities concern both sides of the Chamber. Inner London is, unsurprisingly, our richest region, with GDP at 614% of the EU average—though I recognise that in London, too, there are pockets of deep poverty—but that figure falls to 69% for Cornwall and the Isles of Scilly. London is obviously represented overwhelmingly by colleagues from my party, but Cornwall and the Isles of Scilly by the Conservative party—this debate is about a fair deal for all our regions and about rebalancing our economy.

[Stephen Kinnock (Aberavon) (Lab)]

I congratulate my hon. Friend on securing this important debate. Given those regional imbalances and the question of how funding should be spent, is it not completely outrageous and unacceptable that we were promised a consultation on the shape of the shared prosperity fund, which should have started in late 2018, but have still not had one? My colleagues and I on the all-party parliamentary group for post-Brexit funding for nations, regions and local areas are sensing that there will not be a consultation before the comprehensive spending review. Does he share my view that that is completely unacceptable? Will he ask the Minister to confirm that he too thinks it is completely unacceptable?

[Paul Blomfield]

My hon. Friend is absolutely right. A feature of the wider debate on Brexit is that so many critical issues that will shape the outcome—structural funds, immigration and others—are just being kicked down the road. I hope that the Minister will respond directly to my hon. Friend’s point.

[Geraint Davies (Swansea West) (Lab/Co-op)]

In Wales, our wages are 70% of the UK average and we receive something like £440 per person in structural funding. Is my hon. Friend aware that with a new plan, we will lose some of that, and that in the case of a new deal, we will have no money at all? Only today, I was talking to representatives of the Swansea universities who said that they were shedding hundreds of jobs. The background to that is the doubling in size of Swansea University thanks to EU money. We are in a critical place in Wales, with closures at Bridgend, Tata and Airbus because of Brexit, so the structural funding is imperative.

[Paul Blomfield]

My hon. Friend is right to highlight the impact on all our areas if there is not adequate investment in economic development.

[Mr Clive Betts (Sheffield South East) (Lab)]

On the shared prosperity fund, a recent report by the Housing, Communities and Local Government Committee called for consultations to begin before the end of April. The Government response simply stated that

“the Government will consult widely on the Fund and final decisions are due to be made following the Spending Review”,

and that

“the Government continues to review our approach to consulting on the Fund accordingly.”

That is not very definite. At some point, we will also need to ask the Minister what, if there were no spending review—which there probably will not be, or at least not a four-year one—that would do to consultations on sorting out the shared prosperity fund.

[Paul Blomfield]

That intervention clearly comes with the great knowledge and experience that my hon. Friend brings as Chair of the Select Committee. I hope that the Minister will pay attention to his concerns in the closing remarks.

I do not necessarily have a lot of confidence in that. I wrote to the Secretary of State for Housing, Communities and Local Government back in February, bringing the CPMR report to his attention and reminding him of the Government’s commitment that regions should not lose out as a result of Brexit. I called on him to commit to providing the equivalent funding to what we would have received had we remained members of the EU. The Minister responded on the Secretary of State’s behalf, but did not make that commitment. I asked the Minister that same question again in May during the Westminster Hall debate on the shared prosperity fund led by my hon. Friend the Member for Barnsley Central. The Minister again did not make that commitment.

Our experience is that where the Government have the opportunity, they shift funding from areas in need to other parts of the country. We have seen that markedly with local government. I therefore simply do not have the confidence that the Government will do the right thing by areas such as ours. In conclusion, I will ask the Minister again, the simple and central question of the entire debate. We were told that there would be no losers as a result of leaving the European Union. Indeed, I pressed that with David Cameron at Prime Minister’s questions in the week after the referendum result. Had we remained a member, South Yorkshire would have received £605 million between 2021 and 2027; other regions would have received comparable amounts. Therefore, will the Government commit to providing, from whatever source, regional development funding at least equivalent to the money that we would have received from the European Union?

[Several hon. Members rose—]

[Siobhain McDonagh (in the Chair)]

Order. All Members can see that there is an awful lot of interest in the debate. I understand that it is important to lots of Members’ constituencies, so I ask you to work with me, and I apologise for imposing a limit of four minutes on each speech so that we ensure that everyone may speak on behalf of their constituents.

14:46

[Mr Clive Betts (Sheffield South East) (Lab)]

I will refer to the Select Committee report which looked at a number of issues to do with local government and Brexit. I have a particular constituency interest as well, as highlighted by my hon. Friend the Member for Sheffield Central (Paul Blomfield), with the advanced manufacturing park and research centre, which has done so much reinvigorate and stimulate high-tech engineering and steel in the Sheffield city region. Yes, that is down to the University of Sheffield, Professor Keith Ridgway and my former colleague Richard Caborn, but it would not have happened without EU funding. We need to be conscious of that.

The Select Committee report was clear. It said to the Government that we need to get on and to consult now about the shared prosperity fund, what it should look like and how the money might be distributed. I understand that the Chancellor may not want to commit to an absolute total of money until after the spending review, or what passes for it—I am sure that the Minister, when he responds, will update us on whether we are to have a spending review—but why can we not have a consultation on the fund details? What is holding the Government up?

The Government have known about this for a long time, and they promised a consultation before the end of last year. A simple matter of at least talking to local government about how the fund will be distributed and what the criteria will be would be a start. People might then have some understanding and a conviction that the fund would happen. Why can that not be done? Why do we have to wait until later? The Government response to the Committee’s report includes no real explanation but simply states that they “will consult widely” on the shared prosperity fund and that “final decisions” will be made “following the Spending Review”, as I quoted earlier.

Why can the consultation not begin now? It is not sufficient for the Government to say that they are reviewing their approach on consulting. Why have we only got that far? It is in no way sufficient. Ministers should tell us what is holding the consultation up. We know that the Department has a big tray of things to do—the social care Green Paper, the social housing Green Paper, fracking, and the devolution framework which we have not yet seen—so Ministers are obviously busy thinking about doing things in the future, but why can we not get on and at least start to do something? That consultation would be an extremely good start. That is an important point, which needed to be made.

Another important issue we need further clarity on sometimes gets overlooked: we will no longer be a member of the European Investment Bank, which has provided funding for many important infrastructure projects. Again, the Government say that they want to explore options for future relationships with the EIB and for the arrangements to be put in place for local authority funding of future infrastructure projects. Why can those discussions with local authorities not begin now? Why do we have to wait? That is a simple ask. It may seem a long way away, but local authorities that are looking to start long-term infrastructure projects in 2021 need to start planning now. That is why the Government need to start consulting about how those projects will be funded.

14:50

[Derek Thomas (St Ives) (Con)]

I am glad to have the opportunity to speak in this interesting and important debate. The six Cornish MPs went to the Treasury some time ago to set out why it was so important to address the issue properly. It is absolutely right that when we get the consultation, we use the expertise available to make sure it is done correctly.

I want to be clear that in Cornwall and on Scilly we are looking not for a handout, but for a hand up. The aim of European funding is to reduce inequalities between communities and reduce disparities in regional levels of development, with particular regard to those that have increased deprivation, rural and island areas, areas affected by industrial transition and regions that suffer from severe and permanent natural or demographic handicaps. Cornwall and the Isles of Scilly fit perfectly with those aims. There is no reason not to see ourselves as benefiting from funding.

The seven least developed areas have set some priorities. The most sensible one, I think, is for an ambitious regional policy for England and Wales that recognises the need for a specific mechanism for the regions that are furthest behind. We want a protected allocation of funds to such regions that will allow a genuine rebalancing of the UK economy. I have heard nothing from the Treasury or the Minister to suggest that is not their intention.

[Sarah Newton (Truro and Falmouth) (Con)]

My hon. Friend is making a powerful point. The modern industrial strategy clearly commits to making sure that regions can play their full part, so no region is left behind. The allocated funding would not only improve the lives of people in Cornwall and the Isles of Scilly, but enable the region to contribute to national well-being.

[Derek Thomas]

My hon. Friend is absolutely right. As I say, we have heard nothing yet to suggest that the economy in Cornwall and on Scilly could not thrive. It is really important to MPs in Cornwall that we are part of the solution, not the problem. In July last year I set up a group that works with local business, Cornwall Council and people who already work with the most deprived and left behind in our communities. The group looks at the skills that a shared prosperity fund should deliver to enable people to get the well-paid, skilled jobs they want. The Chief Secretary to the Treasury, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), attended the first meeting and set out a Government commitment and invitation for us to engage in the process and help them to understand what was needed.

Outside this building today there are thousands of people demanding that we take urgent action on climate change, clean up our air and make our society healthier and fairer. Through the shared prosperity fund we can achieve exactly that, particularly in places such as Cornwall. The Committee on Climate Change recommendations set out the need for massive upskilling to give people the skills needed for research and innovation, so that we can decarbonise our environment and our economy and ensure that people are healthier, live in healthier homes and have better opportunities. Now is the right time to have this debate and create a vibrant, low-carbon economy with better health, better skills and better pay.

In our jobs and growth group we have looked at skills. Even with European funding, the real problem in Cornwall is that many communities and young people never feel they have the opportunity or the learning that they need.

[Alex Cunningham (Stockton North) (Lab)]

The hon. Gentleman has talked about young people, and I am sure he will share my anxiety about the future of the youth employment initiative, which is EU-funded. It helps to provide opportunities to young people who are not in employment, education or training. The Tees valley is one area that benefits from it at the moment. Does he share my anxiety about the fact that there is no clarity from the Government about the future of that funding?

[Derek Thomas]

I welcome that intervention, but I will continue with my point about the real problem for us in west Cornwall. Quite often, there are two options in Cornwall. One is to go away to university, which is much easier now because we have a university in Cornwall, in the constituency of my hon. Friend the Member for Truro and Falmouth (Sarah Newton). However, the vast majority of our young people leave Cornwall, in what we describe as a brain drain. The opportunities for those who are left behind are very limited. There is a real need to look at apprenticeships and how further education can be properly funded for the skills and jobs that we need for the future. I believe that Cornwall has a real opportunity to share in that, exploit it and thrive, and I believe that shared prosperity is the solution.

Our group has looked at the role of high streets, and Cornwall Council is running an inquiry into how to make high streets work. They are no longer just about shops; they are about an experience, and where people live. They are places to get support and advice, and they even include workplaces other than shops. Lots of work is being done in communities in all our constituencies in Cornwall on understanding high streets. That is not just so that we can say, “Government, give us money so we can spend it,” but because we want support to make local economies low carbon. We have great talent; now, we need great opportunity.

14:56

[Anna Turley (Redcar) (Lab/Co-op)]

It is a pleasure, as always, to serve under your chairmanship, Ms McDonagh. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this important and timely debate on the future of regional development spending.

I speak on behalf of my region, the Tees valley, which has been a net beneficiary of Britain’s EU membership. In fact, it has often been the case that EU regional development funding has better supported my region than our own Governments have done. In the current spending period, 2014 to 2020, the Tees Valley has been allocated £198.1 million of EU regional funding. Those funds have provided vital investment, including in research and development and innovation, boosting small and medium-sized businesses, helping to retrain and upskill the local workforce, and supporting our area’s transition to a low-carbon economy.

There has been funding for the youth employment initiative to help to tackle our youth unemployment, which is two and a half times the national average. However, that investment has simply not been enough to offset the damage wrought by the UK Government’s austerity agenda. According to analysis by Institute for Public Policy Research, £6.3 billion of public spending has been taken from the north under austerity, while the south has gained £3.2 billion. That austerity has caused the public sector workforce in the north-east to fall by almost a quarter, with a huge knock-on effect to local economies.

We still have pacer trains running on yet-to-be electrified lines, despite the promise of better upgrades, while billions of pounds are poured into London’s Crossrail. Many communities are no longer served by bus routes, as subsidies have been slashed. Meanwhile, the crisis at British Steel threatens to put another great British industry, deeply rooted in the north, out of action because Whitehall has failed to create the level playing field that the steel industry so desperately needs.

Our region would now be classed as a lesser developed region. The Conference of Peripheral Maritime Regions estimates that the region of Tees valley and Durham would be classified as a less developed region by the EU post 2020, putting us among the poorest regions in Europe and therefore entitling us to more money. That is absolutely shocking and demonstrates how regional inequality has skyrocketed under this Government.

At this crucial time when we need a greater share of regional development funding to give our area a boost, we do not yet know how the Government intend to allocate regional funding when EU policy no longer applies. The UK Government’s proposed UK shared prosperity fund is very light on detail. If their record is anything to go by—allocating money to the areas with the highest economic return, which typically are the areas that are already the wealthiest—my area could massively lose out again. If we were to remain EU members, the CPMR estimates that, based on current population numbers, the Tees valley would be entitled to more than £270 million between 2021 and 2027. That is money that we desperately need. That share of the pot reflects the huge regional inequalities across our country, and it would make a massive difference to growth in my region.

[Alex Cunningham]

The SSI site in my hon. Friend’s constituency is yet to see any real progress in development. That is all the more reason why we need a commitment to greater funding if we are to create jobs for people there and in my constituency, which is just across the Tees valley.

[Anna Turley]

I thank my hon. Friend and neighbour for that important intervention. He is right; there has still not been a single new job created at the SSI site in my constituency, which lost 3,000 jobs overnight in 2015. We have a plan for 20,000 jobs, but we need every bit of support and encouragement we can get to achieve that. It is not going to happen without looking more widely afield. My concern is that it will be local people that end up paying the cost of cleaning up that site.

Our share of the pot reflects the huge regional inequalities across our country and would make a massive difference to growth in my region. Ministers have indicated that regions should not lose out from the decision to leave the EU but, if current policy is anything to go by, yet again the Tees valley will be deprived of vital support

Recently we saw the launch of the Power Up The North campaign, led by our regional media and supported by politicians, businesses and people across our communities. I congratulate them on this great campaign. It is extremely powerful and is pushing back against the old idea that success in London and the City will automatically lead to a wave of wealth, spreading out across the country, and lift up areas like Teesside on a rising tide. We know that is not the case.

We have just had the fifth anniversary of the northern powerhouse, which was launched to great fanfare. I hoped it might be a turning point in relations and inequality in this country, but five years on it is clear that the concept has been a damp squib, achieving more as a political campaign rather than delivering real power to our region.

On Teesside we have proved that when we are given power and control we can do great things, such as supporting our people to retrain after the SSI closure through our local taskforce, and developing a local industrial masterplan for the South Tees Development Corporation. We have big ambitions for carbon capture, hydrogen power, and other clean industries, but the reality is that too often we are reliant on going cap in hand to the Government for funding. Now we are at risk of being in an even worse situation. Without better investment in the EU, the northern powerhouse will only ever be a soundbite that failed to deliver.

15:01

[Sarah Newton (Truro and Falmouth) (Con)]

I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate, which builds on the excellent debate about the shared prosperity fund led by the hon. Member for Barnsley Central (Dan Jarvis).

All of us here would like to be evidence-based policy makers. There is inconclusive data about how successful the European funding programmes have been; the London School of Economics study and the excellent House of Commons studies all show that. It is important that we learn the lessons about how that money has been invested. From my own constituency, and Cornwall more widely, I can see that this money has been absolutely essential, but we need to draw the right conclusions from previous programmes so that the Government’s commitment to regional growth funding is done right and builds on the success we have seen.

[Stephen Kinnock]

How does the hon. Lady propose that the lessons be learned and things be improved if there is no consultation exercise?

[Sarah Newton]

I will come to that in a moment. At the last debate, the Minister invited us to put forward our suggestions. We do not need to wait for a formal consultation; my hon. Friend the Member for St Ives (Derek Thomas) has demonstrated that. There have been consultation meetings with local enterprise partnerships and with the business community all over the country. It is up to us; we are leaders in our own communities. We should be making the most of these opportunities—today is one opportunity—so I will make some suggestions to the Minister, as he has invited suggestions about how we should go about allocating the funding.

First, we want to have designated funding for our regions. The EU funding that has been used so successfully is seldom the only source of funding. As other Members mentioned, it is often an opportunity to leverage additional funding. I want to get across the message that the huge investment in rail and buses in my constituency, where we have two universities, was enabled by European funding, but it was brought about by leveraging and working in partnership.

The way that the Treasury allocates funding and looks at gross added value often disadvantages areas with populations that are dispersed over large geographical areas. In the last five years, investment in cities and city regions has been successful, but those of us without cities—or even towns that meet the Government’s criteria of a population of 135,000—are disadvantaged. That geographical designation is really important for us to meet the opportunities of our local economy to grow, through the regional industrial strategies that feed into the national industrial strategies.

[Jim Shannon (Strangford) (DUP)]

Because of the processes that the Government and the EU structural fund have followed, Northern Ireland has been able to access the fund. The simple reason is that we have lower wages and higher energy costs, and therefore a higher cost of living. It has proven to be the case that Northern Ireland needs the structural fund, and it has been a success. If the Government were able to ensure that something happens in the future along the same lines, it would be positive.

[Sarah Newton]

I agree that it is important that the Government honour their commitment to provide regions with the same sort of money as they would have got had we remained in the European Union. That was a clear commitment made by our party at the last general election. We will be working hard to make sure that whoever leads our party honours that commitment.

We should have opportunities to make decisions about how that money is spent, and I want those decisions to be made locally. The great city regions—I know the hon. Member for Barnsley Central is doing a good job as the Mayor of the Sheffield city region—must work in partnership. When I was a Minister at the Department for Work and Pensions, I saw the opportunity for central Government Departments to work in partnership with the metro mayors to innovate in their regions; that is something Government should be proud of and advancing.

It is not only regions or metropolitan areas with mayors that can work with Government in that way. Single-tier authorities, such as Cornwall Council and the Council of the Isles of Scilly, in partnership with our local enterprise partnership, can work on greater devolution and have far more say about how the money should be spent in our region.

In my remaining time, I want to touch on the European social fund. Debates are usually about roads, bricks and mortar rather than about the ESF’s work helping people who have been out of work, and far from the labour market, into work. There has been a huge amount of innovation under this Government, particularly led by the Department for Work and Pensions, working with metro mayors. The hon. Member for Barnsley Central has been pivotal to that work, and there has been a great deal of learning.

I would like the big, national work programmes contracted by the DWP to stop at the end of this round, and I would like that money to be spent by devolving it into partnerships in regions. We have an excellent local enterprise partnership in Cornwall, with a good skills committee, which is addressing the issues that my hon. Friend the Member for St Ives articulated so well: the need to develop skills and get people into work for the economy of the future. The best approach would be to enable regions to commission employment services that meet the needs of their communities.

Obviously, we have to be mindful of the market. We have to have a thriving market in people who provide those services, but that could be done at the same time as enabling greater local partnership. Then we would see the real progress in our economy that we want to see, in Cornwall and in every part of our community, and closing the unacceptable gaps in people’s life chances.

15:08

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

It is a pleasure to speak under your chairpersonship, Ms McDonagh. I thank my hon. Friend the Member for Sheffield Central (Paul Blomfield) for securing the debate.

It has been three years and three days since the EU referendum. During that time, the Government have failed to negotiate a decent Brexit deal, and that has resulted in uncertainty in our economy, for my constituents and throughout the country. My constituents voted to leave the European Union but they did not vote for their rights to be watered down, for their jobs to be at risk or for a less prosperous future for their children.

South Yorkshire has had its challenges and its triumphs. I am proud of our region’s strong manufacturing base, which has remained resilient despite the devastation of the 1980s under the Thatcher Government. European structural funds, particularly from the European regional development fund—the ERDF—for infrastructure and the European social fund for employment, have been important elements in rebuilding our regional economy since those days. I have seen how the funds have had huge impacts in my constituency of Sheffield, Brightside and Hillsborough. We have fantastic facilities such as SOAR Works, which is a managed workspace at Parson Cross funded through the ERDF, and Building Better Opportunities—a great scheme to get disabled people in Sheffield into employment that has received £2 million from the European social fund.

Sadly, the Government’s record on supporting the north has been a travesty and has held back the economy in our area. Everyone in Sheffield remembers that one of the very first actions of the coalition Government was to cancel a crucial £80 million loan to Sheffield Forgemasters—a clear sign that investing in the north was not a priority. The Government still talk of a northern powerhouse in slogans, but warm words will not cut it. The north needs investment to turbocharge our economy and to give communities the jobs, skills and opportunities that they deserve.

Under the EU system we would be entitled to a higher level of investment. As the report notes, South Yorkshire would be entitled to more than €500 a head in the next six-year period, which could amount to around £30 million for my constituency alone: a massive amount of money. We have seen food bank use rocket, particularly after the roll-out of universal credit. If the Government fail to invest in areas such as South Yorkshire, we will see more people struggle and rely on food banks to survive.

The 2017 Conservative manifesto stated:

“We will use the structural fund money that comes back to the UK following Brexit to create a United Kingdom Shared Prosperity Fund”.

The fund is to be targeted, flexible and devolved, and it is intended to promote inclusive growth. But although they constantly refer to it as the means by which they will

“tackle inequalities between communities...especially in those parts of our country whose economies are furthest behind”,

the Government have yet to offer any clarity on how it will work or the mechanisms by which it will be distributed.

As we know, the Government said they would consult on the proposals, but here we are in June 2019 and the consultation is still not forthcoming. Will the Minister take this opportunity to assure my constituents in Brightside and Hillsborough that the Government will cover any shortfall that results from leaving the EU? Furthermore, the Minister will be aware that the framework for distribution of the ERDF in the period from 2021 to 2027 has the funding of low-carbon schemes at its heart. Will the Minister commit to a similar focus in the shared prosperity fund in response to the climate emergency?

[Siobhain McDonagh (in the Chair)]

I am sorry, but Members must go down to three-minute speeches, so will everybody be circumspect about making interventions?

15:12

[Mrs Sheryll Murray (South East Cornwall) (Con)]

It is an absolute pleasure to serve under your chairmanship, Ms McDonagh. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate, which is important to my constituency of South East Cornwall as we prepare to leave the EU and seize the growth and trade opportunities that Brexit offers. I am grateful for the opportunity to make a brief contribution and am pleased to see that my hon. Friend the Minister will respond.

Cornwall may be a beautiful county of beaches, moorland and communities, but it lags behind the UK on many economic indicators. Its rurality is a blessing, but it puts a brake on growth and prosperity. We are closing the gap with other regions and nations, but we need to maintain that progress. European structural and investment funds have undoubtedly helped to boost the Cornish economy, creating jobs and boosting skills, higher education and inclusion. Better connectivity has also been a benefit. Just over 90% of my constituency now has access to superfast broadband, which is excellent news, but there is still work to be done for the remaining 10%. Local transport links, such as the A38, about which I had an Adjournment debate last week, need to be prioritised. Cornwall’s economic future is a positive one, from the development of the space sector to the growth of creative industries, tourism and high-quality food and drink production. I want to maintain the momentum after we leave the EU.

Brexit provides us with an opportunity to reassess how money is allocated and to make sure it is spent wisely and without the red tape of EU bureaucracy. Will my hon. Friend the Minister give an indication as to when we can expect the consultation on the shared prosperity fund? It has been promised and it would be good to know when it will happen. A refreshed approach to regional policy that is strategic and devolved will help to ensure that funding is targeted in the right areas, better reflecting the needs of my constituents. All hon. Members are fully aware that we contribute more to the EU budget than we get back each year. I ask the Minister to ensure that we receive a fair share of the Brexit dividend that reflects Cornwall’s unique economic and social challenges.

15:15

[Dan Jarvis (Barnsley Central) (Lab)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this important debate. I am pleased to see Members here from all parties and from every corner of the United Kingdom, especially from communities in our least developed regions, such as those in South Yorkshire, where I am proud to serve as Mayor and MP. Such communities are among the hardest hit by austerity, by stalled economic growth, and by the failure of successive Governments to address widening regional inequalities.

The stark truth is that, from 2020 onwards, funding allocated to regions by the EU will come to an end, and 2021 marks the end of the Government’s local growth fund programme. Taken together, those funds have been the glue holding together many of our communities. What replaces those funds must replace them on the basis of what would have been received had the referendum result been different. The creation of a shared prosperity fund provides a vital opportunity to do things differently. To heal the divisions in our country and to turn the dial in those least developed regions, we must think and do differently.

The UK has one of the most centralised political systems in the world, with the inevitable consequence that some of the decisions taken by Westminster and Whitehall, however well-intentioned, do not reflect the needs or opportunities of local areas. Those living in the UK’s least developed regions are feeling the impact of the equality gap, which grows ever wider. I am hugely positive about our collective ability in the north of England to make real progress, provided that we have the right powers underpinned by the right resources. My hon. Friend the Member for Redcar (Anna Turley) mentioned the Power Up The North campaign, and increasingly there seems to be a growing recognition that the answers to the many challenges that we face do not lie in Westminster or Whitehall.

In the final minute that I have available to me, I will rattle through the four principles that I have set out for the shared prosperity fund.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Will my hon. Friend give way?

[Dan Jarvis]

I will not; I have very little time.

First, the annual budget for the shared prosperity fund should be no less in real terms than both the EU and local growth funding streams that it replaces. Secondly, there should be no competitive bidding element. Thirdly, the fund must be fully devolved to the areas that have in place robust, democratically accountable governance models. Finally, the funding must be stretched over multiple years, beyond the vagaries of spending reviews and parliamentary cycles.

If we want to create a country that works for everybody, let us take the opportunity to be bold, and let us make sure that the shared prosperity fund does what it says on the tin and enables all of our communities to share and prosper in our country’s economic growth.

15:18

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

The lack of clarity and detail over the potential loss of funding three years after Brexit is a cause for general alarm. Those critical funds are extremely important in my constituency of North Ayrshire and Arran, where they fund employability initiatives and measures to tackle poverty and the promotion of social inclusion. Three years later, we still have no idea how much cash the replacement shared prosperity fund will have to distribute. We do not know what charities and voluntary organisations will be eligible for funding. We do not know how the funding will be administered and which programmes that currently benefit from the fund will be left staring a black hole in the face. I urge the Minister to give much-needed and much sought after clarification on this issue. Will we have equivalent like for like replacement funding post-Brexit, and can he guarantee it whether or not the UK leaves the EU with or without a deal? A yes or no would be interesting.

We need answers, we need honesty and of course we need an unequivocal commitment from the Government that the communities who need the fund and who benefit from it will not be sacrificed, abandoned and forgotten as the Government drag us off the Brexit cliff-edge. I remind the Minister that the Government must respect the devolution settlement, and that it is imperative that the UK Government work with all the devolved Administrations to reach agreement on future funding arrangements that make sense for all parts of the UK. I look forward to hearing what he has to say about that. My constituency and country must not be short-changed.

15:20

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is good to see you in the Chair, Ms McDonagh. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate. If we have learned anything from the past few years, it is that people feel ignored by politicians and powerless to influence decisions about the most important things in their lives, such as whether a local hospital is kept open, whether their child’s education is properly funded, whether bus services continue so that they can get to work, or even whether they can afford to buy or rent a decent home to live in. They are told that the economy is growing, but everywhere they look services are being cut. Nowhere is that more true than in the north of England. The north has a population of 15 million people, which is roughly twice that of London. It has five major cities, 265 towns—including mine—and more than 1,000 villages and small communities. Our economy is more than twice the size of Scotland’s, and if the north were a country it would be the ninth largest in the EU. We have eight major ports, 29 universities and four national parks. We produce a third of the UK’s renewable energy and are leaders in the manufacturing, scientific and high-tech sectors. That is a pretty impressive CV.

Despite that, however, and despite the introduction of the northern powerhouse five years ago, regional inequality has grown since 2010. The north has borne the brunt of the Government’s austerity drive with a £3.6 billion cut in public spending, whereas the south-east and the south-west had £4.7 billion extra in real terms. There are now 200,000 more children living in poverty in the north than there were five years ago. That is a scandal. The economy has been growing consistently throughout those five years. If such a huge number of additional children have been growing up in poverty during that period, it is ample evidence that the economy does not now work for everyone.

Why, in 2019, does London still hold all the power and the resources? The sooner we realise that business as usual is not going to cut it and that further Westminster handouts on Westminster terms will not be enough, the better. We do not need more crumbs from the table. It has been clear for a long time that people are fed up to their back teeth with the current approach. Is it any wonder, when the system clearly does not work for them, that they feel ignored, isolated and held back?

Our country will be undergoing massive changes in the next 10 or 20 years. People feel they need to see a change. The central aim of the shared prosperity fund is to reduce inequality and enable all our communities to share in the country’s economic growth. So let us really enable our communities to do that. Let us give them the responsibility, power and resources to shape their future, in line with local priorities and local need, using a bottom-up model in which decision making and accountability are at local government level, and which delivers real change whose benefits they can see.

I hope the Minister will be able to provide more detail about how the fund will be designed, and how it will work and be administered. I hope that he will also provide the guarantee that we all seek, that communities will be left no worse off. Finally, I urge him to get on and publish the consultation, so that we can address the systemic inequalities between our regions and ensure that all our communities share in the prosperity of one of the most prosperous nations in the world.

15:23

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

I thank my hon. Friend the Member for Sheffield Central (Paul Blomfield) for introducing the debate so well. Colleagues representing Cornwall constituencies have made a good case for the argument that the far south-west does not get its fair share, and they are right—we do not. We have not had our fair share under the Governments of the past nine years, and we risk getting an even worse deal if we do not get post-Brexit funding right. I worry that we are getting it wrong politically in Parliament at the moment, and that the Government are getting it wrong through their lack of planning for what would replace EU funding for the region after no deal.

Whatever our views on the European Union, and whether we voted remain or leave in the south-west, there is no doubt that the EU funded us fairly, and Westminster continues to fund us at below-average levels. That is despite the fact that Cornwall is one of the poorest counties in the entire country, and despite huge levels of deprivation in Plymouth, with below-average spend across the county. When we get lumped together as part of the south it annoys me, because some of the poorest communities in the country are in Plymouth and Cornwall. Our peripherality has made things harder, but that is not recognised by Westminster in the funding formulas, although the European Union has recognised it in the way it has distributed funding. One need only look at towns funding to see that in action. Out of a £1 billion fund there was only £30 million for the entire south-west region. It was supposed to be allocated on the basis of need, and that episode has not built confidence in the way any future Government will allocate funding after Brexit.

There is an important rationale for funding based on a clear distinction, so that wherever someone lives—in Plymouth, Devon, Cornwall, or anywhere else in the country—they should be funded fairly and given the same opportunities as people have anywhere else. That is what must happen. I worry because there is the risk of no deal on 31 October and the new system is not in place. People do not know what will happen to the funding streams that they currently enjoy. They do not know what forms they will have to fill in, what deadlines they will have to meet, or what happens to existing funded programmes. I worry that that is causing concern.

I remember the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), now a Tory leadership contender, starting the referendum campaign in Cornwall —in the constituency, I believe, of the hon. Member for Truro and Falmouth—and grasping a pasty. I think he called it the pasty of independence. We now know that the geographical indicators that protect Cornish pasties might not be there with a no-deal Brexit. In fact, it looks as if they probably will not. So we need to make sure in the far south-west that we protect not only our funding streams, but our fantastic products. That is really at the heart of the issue. We need to make sure that whatever system replaces the European funding if Brexit does happen, distribution will be fair. I worry at the moment that the poor deal for the south-west will continue unless there is a consultation that clearly brings about change, to give such regions a better deal.

15:26

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to see you in the Chair, Ms McDonagh. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate and on the case that he outlined.

For the past 20 years or so, Wales has been a net beneficiary of the European regional development fund and that funding has allowed the transformation of towns and villages across south Wales. There has been hugely significant investment in Merthyr Tydfil town centre, which has helped to regenerate the whole town centre—a new college development, and the creation of a new square that has become the focal point for a calendar of cultural events. The A465, which my hon. Friend the Member for Blaenau Gwent (Nick Smith) mentioned, and which has had a history of collisions over many years, has vastly improved because of a continuing project to create a dual carriageway. There is one more phase to complete, linking my constituency to west Wales and, to the east, through to the M50, M5 and midlands. That has all been possible with the support of regional development funding from the EU.

In communities across my constituency, such as New Tredegar, Treharris, Bedlinog and Rhymney, there have been transport schemes, flood alleviation works and town and village centre regeneration, all supported through regional development funding, which has proved essential in beginning the process of regenerating communities across the south Wales valleys.

As we heard from my hon. Friend the Member for Sheffield Central, the Thatcher Government ripped the heart out of our communities, threw countless people’s jobs on the scrapheap and decimated towns and villages across south Wales, without having any plan to replace the jobs that were lost. The economic decline of the ’80s and ’90s can still be felt today, despite the investment that the valleys have had, which stemmed from the work of the Labour Government. I have tried to outline the history of the communities that I represent, and to highlight why economic deprivation exists. We benefited from regional development funding quite simply because we needed it, which is why it is essential that we now have clarity from the Government about the future for the shared prosperity fund. The Government have not been clear about their proposal for the fund. We were promised, as we have heard, that consultation would take place before the end of 2018, and we are now halfway through 2019. There is no sign of the consultation. As my hon. Friend the Member for Aberavon (Stephen Kinnock) has said, that is completely unacceptable.

A few weeks ago in Welsh questions I asked the Secretary of State to provide clarity on the fund and how it would work, what areas of the country would benefit, and how much the fund would be—and there was no answer from the Secretary of State. I hope that today the Minister will provide some of the clarity that is needed. The people of Wales, and people across the UK, were told by the leave campaign that we would not lose a penny if we left the EU. As things stand, we are due to leave the EU later this year and we are still unclear about the many millions of pounds that Wales currently receives as part of the EU, and how that money will be replaced by the Government. There is a need for certainty, so I have two questions for the Minister. Will the new fund be based on need, and will the Government respect devolution in their allocation of the new funding?

15:33

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Ms McDonagh, and I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate on an issue that is close to my heart, given the effect of European funding on the highlands and islands over the years. He cited CPMR figures of €13 billion and £11 billion, and as he rightly said, those numbers have been backed up by the House of Commons Library, and may even be an underestimate of the funding available had we remained in the EU. Indeed, if the Government had decided to take a sensible approach, we would still be beneficiaries of that funding.

The hon. Gentleman spoke about the least developed regions, which get a bigger share of that money because they have greater need, and about the EU stepping in where Westminster had not. My constituency contains some big, iconic signals of that. Predating devolution, the Kessock bridge crosses from Inverness to Ross-shire, and it would not have been delivered without intervention from the EU. It has been transformational. Similarly, the University of the Highlands and Islands is now a physical entity, and it has helped hugely with some of the issues described by Members today. There is no town, village or community in the highlands and islands that does not show a wee EU sign to explain how it has benefited from that funding over the years. The hon. Gentleman went on to talk about a range of positive and social economic benefits of European funding, and we share that view.

The hon. Member for Sheffield South East (Mr Betts) asked a question that many of us have asked: why is there no consultation? What is holding up the Government? He raised the important point that we will no longer be a member of the European Investment Bank, and the deficit that that holds. The hon. Member for St Ives (Derek Thomas) said that people are looking not for a handout but for a hand up, and he listed the criteria. That is where the EU has stepped in in the past. He spoke about a protected allocation of funds, and said there is no reason to believe that that is not what is intended. Let us see the evidence for that; let us see the delivery. There is no detail and, as we have heard, not even a consultation.

The hon. Member for Redcar (Anna Turley) spoke about investment and innovation, business and work skills, youth employment in the Tees valley, and about how essential those things are given this UK Government, and the times of Tory austerity we have been living through. She said that people have no knowledge about what is coming, and with her customary niceness she said that plans are “very light on detail”—I would have used stronger terms, but she is absolutely right. The hon. Member for Truro and Falmouth (Sarah Newton) said that the way the Treasury looks at funding overlooks rural areas, and that she will be working hard to ensure her party honours that commitment. We need to hear the Minister say that the funding will be fully replaced, and whether it will be included in the spending review.

The hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) talked about the three years of uncertainty that the communities and recipients of that spending have lived through, and she wondered where we will go next. Importantly, she mentioned the positive impact of the funding on disabled people, because often the best of it goes to those who are left behind in the thoughts of Westminster. She spoke about there being slogans from the Tory Government rather than investment, and today the Minister has an opportunity to put some meat on the bones and give the guarantees that everybody is asking for.

The hon. Lady also mentioned the importance of such funding in the shadow of universal credit, and as an MP for a constituency that has seen UC over six years, from pilot to full roll-out, I know that money from the EU is vital to address some of the deficits caused by that programme. Indeed, we share a rise in food bank reliance as a result. She said that funding should be targeted, focused and devolved, but we are still waiting for a consultation.

The hon. Member for Ellesmere Port and Neston (Justin Madders) talked about how regional equality has dropped, and there are now extra children living in poverty. He asked why in 2019—I agree with this—Westminster still holds all the power. He said that people are fed up to the back teeth with Westminster’s approach, and that we need bottom-up decision making. The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) spoke about below-average spending from Westminster. He said that EU funds are fairer, and that there is a better recognition of the issues by the EU. He rightly spoke about the risks of a no-deal scenario.

In the short time that she took to make her speech, my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) spoke succinctly, and rightly, about the real living alarm over the lack of detail about what is coming. Who will be eligible? How will it work? What will it be worth? Will there be—this has been mooted but not explained in any detail—like-for-like funding? Will that guarantee be yes or no, regardless of a deal or the catastrophe of a no-deal hard Brexit? She pointed out, as have nearly all the contributors today, that the funding formula must respect the devolution settlement, and she said that neither she, her constituency, nor her country should be short-changed. We call on the Minister to give those guarantees.

I am grateful to the all-party group for post-Brexit funding for nations, regions and local areas for its reports. It backed up a lot of the comments made around this room. It had lots of submissions, including from the Welsh Government, the Convention of Scottish Local Authorities, EHRC, and many educational and voluntary bodies, which all said that budget funding should be

“no less in real terms than the EU and UK funding streams it replaces.”

It pointed out that shares for the devolved nations should not be reduced, and that as we have heard, it should be a devolved matter.

The hon. Member for South East Cornwall (Mrs Murray) rightly asked when we will see action, even just the consultation—that is a pro-Brexit Member asking for that guarantee. The hon. Member for Barnsley Central (Dan Jarvis) spoke about the failure of successive UK Governments to address regional disparity, and he mentioned the most centralised political system in the world here at Westminster. I think his four principles are absolutely right: the budget should be no less than it currently is, there should be no competitive bidding, it should be fully devolved, and it must be beyond spending reviews and political cycles.

We have had a promise from the Tory Government, but then delay after delay in getting any information. Evidence from the House of Commons Library shows that we are approaching nearly 300 parliamentary questions, without an answer on any detail of this funding.

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

The hon. Gentleman makes a point about European funding being replaced by UK funding. If funding does come from the UK rather than the EU in future, will he commit to all projects being branded as co-Scottish Government and UK Government?

[Drew Hendry]

It would be much easier to respond to that kind of comment if the UK Government had given any details about how this will go forward. While the hon. Gentleman worries about slogans and branding, I worry about getting the detail to explain what communities across our constituencies, including my own, will get from this programme in future. When will we know the detail about what will be spent, who will be eligible, and will it be fully devolved? Once the Minister has answered those questions, we can go back to talking about flags and slogans.

Communities and charities have waited years to find out what will be available post-Brexit. The devolution settlement must be respected. As we have said, since Brexit is distracting the UK Government from doing anything worthwhile at the moment, let us revoke article 50 and get on with doing things properly, which would clear things up right away. Brexit will cost Scottish communities millions, and this particular issue must not add to that burden.

15:33

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

What a pleasure it is to serve under your chairmanship again, Ms McDonagh, and I thank my hon. Friend the Member for Sheffield Central (Paul Blomfield) for securing this debate, and for all the work he has undertaken in Parliament to champion the issue of EU replacement funding and what to do about those regions in greatest need.

This debate has shown Parliament at its best. We have colleagues from Scotland, Wales, Northern Ireland, the north-east, and Cornwall, but I think the star must go to Yorkshire, which is out in force this afternoon. There has been near unanimity across the Chamber, and we heard a number of powerful, well-argued speeches on the need for more information about the prosperity fund, to find out when it will be sorted out and how it will be disbursed, and what the Government will do about the regions in greatest need. I hope the Minister takes on board that it is a cross-party argument and that he listens, rather than simply chuntering from a sedentary position.

This is a timely debate. I am not sure we could be in a more uncertain time on Brexit, and the whole issue of how the prosperity fund will operate and replace EU funding has not been resolved, which is creating uncertainty for many regions. Even at this late stage, we are not entirely sure what the prosperity fund will cover. Will the Minister confirm that it will include all the European structural investment funds—the regional development fund, the social fund, the cohesion fund, the maritime and fisheries fund and the agricultural fund for rural development—as well as funding for youth unemployment and European territorial co-operation? It would be helpful to know exactly what it will encompass and how much money will be attached to it.

The second issue, which is at the crux of the debate, is what the Government will do about the recent research from the Conference of Peripheral Maritime Regions that shows that regional allocations from the EU would increase in the period from 2021-27 and affect positively at least five regions—Tees Valley and Durham; South Yorkshire; Lincolnshire; west Wales and the valleys; and Cornwall and the Isles of Scilly—and indeed up to seven regions. Over that period, it is estimated they would receive an additional €13 billion in funding, up 22%. We need to hear whether the Minister accepts that research and what the Government will do about it.

We have heard from hon. Members that such an increase is necessary because of a worsening of the relative position of the UK regions, with many areas falling behind the EU average for regional prosperity. Research cited in the House of Commons Library document as well as Eurostat data show that regional inequalities in the UK are growing. That is a terrible indictment of the Government’s policies; we need to know what they will do about it.

The Minister will know that the UK’s less developed regions have called for an ambitious new UK regional policy to recognise and address that need. My own council in County Durham got together with leaders from the other affected regions to ask the Minister for a long-term, urgent approach to tackle widening regional inequalities. They argue that particular attention must be paid to the regions furthest behind in terms of economic activity, areas with increased deprivation, rural and island areas, areas affected by industrial transition, and regions that suffer from severe and permanent natural or demographic challenges.

The leaders wrote to the Minister asking the Government to make five commitments: an ambitious regional policy for the UK that recognises the need for a specific mechanism for those regions furthest behind; the UK shared prosperity fund should be adequately funded and at least match the €13 billion that UK regions would have received under the next EU programme, which is in addition to existing national local growth funding that under current EU programmes is often used as match funding; the UK SPF should be appropriately devolved; the UK SPF should reduce the administrative burden for applicants; and a guarantee that UK regions will not be worse off in funding available for regional development beyond 2020 because of our leaving the EU. In fact, they are asking the Government to make some of the commitments about Brexit we heard before, during and—not so often but sometimes—since the referendum.

I must say that the Minister’s response to the council leaders was very weak; he said what we already know. They were asking about those five points, wanting lots of commitment and detail from the Government, because they are anxious and want to know what will happen about future funding in their areas, which is so important. They got a letter back saying basically that we have an extension until 31 October before we leave the EU—this was in May, by the way—and that the Government are considering all options and will consult on how to carry forward the prosperity fund.

We are all saying to the Minister that that really is not good enough. We need, at this very late point, some detail from him about how the fund will operate and under what criteria. What sort of money are we talking about? Will it be disbursed in the same way as it has been under the EU? Will the Government take need into account and focus in particular on the regions with the greatest need?

Like all hon. Members in the Chamber, I feel strongly about this issue because our constituencies are in regions that need to be supported to reach their full potential. This is not just pleading and bleating. These are amazing regions with huge skills and talents among the population, and they all need development in digital and higher level skills. They need to use our universities and colleges to drive up skills development. There is need for investment in renewable energy in the north-east, and in pharmaceuticals. We also need to upgrade the transport system and ensure that everyone in those regions can reach their potential and contribute to the future prosperity we all want to see. I hope the Minister will tell us something about how we can ensure that prosperity can be achieved by everyone.

15:47

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on proposing and securing the debate. I put him on notice that I intend to finish early to give him the customary ability to say that he disagrees with most of what I say. I will let him think about that while I am talking—he may surprise himself.

Many hon. Members have spoken in the debate, and I was most encouraged by the heartfelt speeches by the Opposition spokespeople, the hon. Members for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and for City of Durham (Dr Blackman-Woods), about the importance of this issue. It really demonstrated to me the passion there is across England, Wales, Scotland and Northern Ireland to achieve and drive a local community. As a proud Unionist, I was reminded of the awesome foursome of our United Kingdom, which we should hold precious in our hearts. When the UK shared prosperity fund comes forward, I hope it will demonstrate our commitment to create growth in every single part of the UK, wherever it may be.

We have had a wide-ranging debate. As well as talking about the shared prosperity fund, the hon. Member for Sheffield Central, the proposer of the debate, took the opportunity to make his fundamental point that the Government have not supported the regions. I fundamentally disagree. This is the Government who created the northern powerhouse, and we are investing hundreds of millions—in fact, billions—of pounds directly into the northern economy. We did not see that under the last Labour Government. If the hon. Gentleman wants proof that the northern powerhouse is real, he has only to look to the hon. Member for Barnsley Central (Dan Jarvis), the proud Mayor of the Sheffield city region, who is sitting a few seats down from him, and to his four mayoral colleagues across the north of England.

We heard from many hon. Members about our being such a centralised country. For the first time in a generation in England, this Government have taken power, money and influence away from London and returned it to our regions. Surely that is a good thing. I am sure it is widely supported by Members across the Chamber. Those of us who want to see all areas of our country thrive should welcome that decentralisation and return of powers to mayors and regions.

[Mr Betts]

I am sure the Minister agrees that this is about not just Government actions but the impact of those actions. Will he confirm that, despite what the Government have done, or think they have done, since 2010, the difference in gross value added between the south-east and the north has not changed?

[Jake Berry]

The hon. Gentleman will have to send me the figures he refers to. Across the north of England, unemployment is lower than it has been for a generation. Picking up on the comments of the hon. Member for Redcar (Anna Turley), £450 million has been committed to a devolution deal for the Tees valley and £120 million has been invested in the SSI site.

Frankly, if the Labour local authorities in the Sheffield city region could get their act together and agree what powers they should hand to the Mayor of South Yorkshire—I know he is already doing an excellent job, but I want him to be given those powers so he can continue to drive the hopes and dreams of the people of South Yorkshire—the Sheffield city region could receive nearly £1 billion as part of its devolution deal. It is shameful that Labour councils are blocking this Government’s giving nearly £1 billion to the Sheffield city region. The councils should hang their heads in shame. We are debating European structural funds, but all this is connected; we cannot consider Europe on its own.

Let me set out some truths. There was reference to a report that mentioned growth of up to 22% in money for less developed areas. That report does not take into account the points made by the hon. Member for Strangford (Jim Shannon), who is no longer in his place, about European countries that may join the European Union during the spending period; it does not take into account the cap that the European Union itself has said it would like to see on spending increases; and it is an estimate. That estimate would go into the European Union and be negotiated.

[Paul Blomfield]

Will the Minister give way?

[Jake Berry]

I will in a moment. I will develop this point first.

Once the negotiation had taken place in Europe, the British Government would bring that figure into the comprehensive spending review and negotiate how it was distributed—which parts should go to European structural funds, to the Department for Work and Pensions and to the Department for Environment, Food and Rural Affairs. Only after that would any of the bodies have certainty about how much they were going to receive.

In fact, if we accept that the quantum of the UK shared prosperity fund should be negotiated through the comprehensive spending review, people will find themselves with exactly the same certainty under that fund as they would have had if we had continued with European structural funds. There is of course certainty until January 2021, when the current spending period ends, and the Government have been clear that the UK shared prosperity fund will start in 2021, so there will be no gap.

[Patricia Gibson]

Will the Minister give way?

[Jake Berry]

I have to give way first to the hon. Member for Sheffield Central, who opened the debate.

People talked about crashing out of the European Union with no deal. Frankly, I do not expect that to happen. Nor do I accept that, even if it did happen, it would look like a crash out of the European Union. However, even if we accepted that analysis—I do not—the Treasury has given a guarantee about the current spending period for European structural funds, which means people who are in receipt of them or want to apply for them should carry on as normal, regardless of Brexit.

[Paul Blomfield]

The Minister knows we are not talking about the current period of structural funds. We are talking about the next period of structural funds, and about what we would have expected to receive had we remained a member of the European Union. We should receive no less than that. I know the European Commission has said since the publication of the CPMR report that, in part because of the impact on the EU budget as a result of Brexit, it may be that regions can expect to receive not 22% but 8% more, but that is not the circumstance we are debating. We are debating what we would have got had we remained in the European Union. Even if I accepted the Minister’s premise, that would mean £536 million for South Yorkshire. Will he guarantee that?

[Jake Berry]

The hon. Gentleman needs to make a decision. It is all well and good debating what we would get if we remained in the European Union, but we will not remain in the European Union. He has to decide whose side he is on. There are 17.4 million people who voted for Brexit. Is he on their side, or is he on the side of the cabal of politicians in this House who have sought repeatedly to block Brexit? I know whose side I am on. I am on the side of the hundreds, thousands and millions of people across the north of England who voted for Brexit. They gave this Parliament a clear instruction. To debate what life would be like if we remained in the EU is, frankly, an irrelevance.

I hope I can now move on to address some of the other points—

[Patricia Gibson]

Will the Minister give way?

[Jake Berry]

I will, because I said I would, but it has to be brief.

[Patricia Gibson]

I came to this debate to ask for clarity. If I heard the Minister correctly, it appears we now have clarity. Although he has not told us what will happen to this money in a no-deal situation, he has, if I have understood him correctly, clarified that the Government are giving no guarantees to the projects that currently benefit from structural funds about the next funding period. Is that correct?

[Jake Berry]

I hope the hon. Lady goes back and reads the Hansard report of my opening statement. I have limited time, but she will find that I answered both those questions. Many people—including the SNP spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey, who is chuntering and chuckling to himself—have said that the problem is that places do not have certainty. I was simply pointing out that even if we remained in Europe—I sincerely hope we do not—they still would not have the certainty they seek in any event.

I want to mention briefly the comments of the Chair of the Housing, Communities and Local Government Committee, the hon. Member for Sheffield South East (Mr Betts), who said we should start some form of consultation. Although, clearly, the consultation has been delayed, I know he is aware, because it has been said in the House when he has been present, that more than 500 people have already been involved in a consultation with the Government—what we might call a pre-consultation consultation. I have consulted widely with the metro Mayors both about this subject and more widely about the impact of Brexit in places such as South Yorkshire, where the hon. Member for Barnsley Central is the Mayor. We are already involved in detailed discussions with officials in the devolved Administrations about the form and function of the UK shared prosperity fund, of which I am sure the SNP spokesman is aware.

I wish I had time to talk in more detail about the brilliant speeches that were made by many others, but I will move directly to address some of the points made by the Opposition spokesman, the hon. Member for City of Durham, and I am sure many others. The Government have been absolutely clear that we will respect the devolution settlement when it comes to the UK shared prosperity fund. That has not changed, and it will not change. We have been clear that we will consult widely in order to get right the UK shared prosperity fund, which is designed to tackle inequality.

I know that, in many cases, the people who spoke about the benefit of European funds know they are not perfect. The SNP spokesman said he sees a wee European flag on many projects. One of my jobs in Government is to take back the money from projects that forgot to put that wee European flag on them, because it is one of the requirements of the hugely complicated and bureaucratic EU structural funds that if someone does not put that wee European flag on their project, the money, in many cases, has to be recovered. We are consulting on a UK shared prosperity fund to ensure that funding is simplified. We will be consulting shortly, and the quantum of the fund will be set during the comprehensive spending review, in the same way that EU structural funds would have been.

15:59

[Paul Blomfield]

I am sorry that the Minister deliberately misrepresented my intervention. That was a comfortable way of dodging the question before us, which is: will our regions lose out as a result of our departing the European Union? As the hon. Member for Truro and Falmouth highlighted, the Government have given a commitment that they should not. As the hon. Member for St Ives (Derek Thomas) highlighted, we are asking not for a handout but for a hand up—strategic investment in our economies—to ensure that we do not lose out. At the third time of asking, in debates and correspondence, the Minister has not answered the question. We will keep pressing.

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

Adult Community Services

Wednesday 26th June 2019 Westminster Hall

[Mike Gapes in the Chair]

16:00

[Karin Smyth (Bristol South) (Lab)]

I beg to move,

That this House has considered re-procurement of adult community services by Bristol, North Somerset and South Gloucestershire Clinical Commissioning Group.

It is a pleasure to serve under your chairmanship, Mr Gapes. I am pleased that this important subject has been selected for debate. Although they cannot be present, my hon. Friends the Members for Bristol West (Thangam Debbonaire), for Bristol East (Kerry McCarthy) and for Bristol North West (Darren Jones) fully support my comments. This is an important issue for the people of Bristol South, and it is a local example of the debate on the legacy of the Health and Social Care Act 2012 and of the invidious position that local managers are being put in to understand the procurement rules.

Hon. Members know that I speak frequently about accountability and the opaque way in which many parts of the NHS operate. We seem to have lost sight of the fact that, however individual bodies are constituted, our health services are public services that are paid for by taxpayers—our constituents. I have also repeatedly said that if we keep asking people to pay more for our health services, they must have a greater say in the way that those services are run, particularly when they are being changed.

I have spoken before of my concern about the attitude of my local clinical commissioning group in Bristol, North Somerset and South Gloucestershire to the openness and transparency of its work, especially on the reprocurement of adult community services. The lengths to which the CCG, supported by NHS Improvement, has gone to hide, cover up and obfuscate are nothing short of a scandal. Most infuriatingly, the whole protracted cloak-and-dagger exercise has been entirely unnecessary, because a far less onerous and costly approach could have been used instead. The reprocurement is the wrong approach at the wrong time to developing community services, and runs counter to the direction of travel being set, in theory, by the new NHS 10-year plan.

Before I review the shortcomings of the reprocurement in greater detail, I will remind hon. Members why it matters. Away from the jargon, acronyms, terse letters and confidentiality agreements, thousands of people across Bristol, North Somerset and South Gloucestershire simply want to know what is happening to their local health services.

My constituent Clive got in touch just over a year ago to tell me about the great work being done at the Healthy Together leg clinic at the Withywood Centre, which provides intervention and treatment for the leg ulcers of patients in south Bristol. It is exactly the sort of joined-up, innovative and integrated community provision that Ministers tell us they want to see—a true partnership between Bristol Community Health, local GP practices and Age UK in Bristol, which come together across different sites to deliver gold-standard patient care that promotes faster and longer-lasting wound healing. The clinic also provides a social setting where patients feel more supported and are encouraged to feel more in control of their condition. There is time for people to care.

The service has transformed countless lives in my constituency and has been nominated for a national award. As I saw first hand when I visited the clinic earlier this month, it is an exemplar of the sort of collaborative provision that the new adult community services contract could and should expand on. Such collaboration takes years to yield results and very much responds to the local needs of the particular community.

The people who are providing the service, however, do not know for how long they will be able to continue, because the CCG will not tell them. The patients do not know for how long they will be able to access that life-changing service, because the CCG will not tell them. As the local MP, I cannot lobby, engage or reassure people, despite asking repeatedly for a peek behind the self-imposed reprocurement iron curtain, because—hon. Members will have guessed it—the CCG will not tell me.

Interestingly, another consequence of the process, which I do not have time to really go into, is the destabilising impact on the voluntary sector. Age UK will have to wait, cap in hand, to see which successful bidder secures the primary contract and how it then decides to sub-contract the provision. The same goes for all voluntary organisations involved in this sort of service provision. It would be bad enough if the Healthy Together clinic were a one-off —the only service caught up in a closed-shop procurement mess—but it is not. In truth, every adult community service is in the same position, which is simply not good enough.

Despite a year of making speeches in this place, asking questions of Ministers, doing time-consuming research and making countless phone calls to offices, neither the CCG locally nor NHS Improvement nationally will engage with me beyond continually asserting that they had no choice but to go down this route. That is a prime example of what the Health and Social Care Committee referred to in its recent report, which said that the

“problems stem not only from the procurement rules themselves, but also from people’s interpretation of these rules and their difficulty in understanding what is permissible within the rules.”

In place of answers, I am forced to restate the litany of my constituents’ questions and concerns that have essentially gone unanswered. First, there is a fundamental lack of clarity surrounding the reprocurement and an abject failure to link it to any broader NHS strategies. I am not the only one who is concerned about the process. I have been spoken to privately by many consultants, nurses, and other staff throughout the healthcare system; I am grateful to them for contacting me.

At no point has the CCG properly defined a needs assessment in the request for proposals. Moreover, at no point has it made the business case for change—the most basic starting point for any such process. Staggeringly, there is no service baseline, so we do not know what services exist. By extension, there are no defined outcomes, so bidders are being asked to make proposals. That is not what commissioning is meant to be about.

Although Ministers continue to trumpet the importance of the sustainability and transformation plans, there is no sense of alignment with those plans, the NHS long-term plan or the emerging integrated care systems. Similarly absent is any indication of integration with local councils on social care or public health, which we all acknowledge are the key issues facing our constituents.

Secondly, there are concerns about the chosen procurement process, because any number of much less onerous and costly approaches were possible. As ever, however, accurately assessing the process is near impossible because of the vice-like secrecy that the CCG has used throughout. What is certain is that we do not know how much it is costing the CCG or the bidders, which include the current not-for-profit community service providers. That means that we do not know how much it is costing us, the taxpayers.

I worked in the national health service for many years, and I have some experience of procurement in the organisation, but I have struggled to understand properly the process through which the procurement has been undertaken. To illustrate, the CCG’s description of the chosen process, in its own words from its own document—bear with me, Mr Gapes, because I did not write it—says:

“The procurement is being undertaken using a process developed by the CCG which has similarities to a competitive process with negotiation. For the avoidance of doubt, the CCG is not running the process strictly in accordance with any specific procedure set out in the Regulations so reserves the right to depart from that form of procedure at any point. This Request for Proposals sets out the procurement process the CCG plans to use for this particular Contract. The inclusion of particular stages, the use of terminology and any other indication shall not be taken to mean that the CCG intends to hold itself bound by the full scope of the Regulations.”

What does that mean? I think it means that the process is as clear as mud, carried out behind a wall of secrecy, but with a disclaimer that enables the CCG to do what it wants without our knowledge. Although we cannot access the process details, what we know does not bode well.

There are myriad loose ends and errors throughout the process. Taken together, they form a significant body of concerning issues. Of course, I would never have known about them—most people do not—if I had not scoured 300 pages of detail and 100 clarification questions asked by bidders. In fairness, I doubt the CCG was expecting anybody outside the process, including the local MP, to do so, but I read them all because I like detail and I think it is important to know what is going on. A lot of the gaps and oversights concerned me.

There seem to have been incorrect working assessments about bed numbers at South Bristol Community Hospital; gaps relating to workforce numbers and staff who have been TUPE-ed; and a number of misunderstandings and examples of where the CCG lacked knowledge about current contracts, rental payments and void space. There is also missing information about assets, and the bidders were apparently expected to carry out the due diligence. That not only places a huge burden on providers, but runs the risk that the entire process will collapse if it is not carried out correctly, as has happened elsewhere. It is worth highlighting that the National Audit Office investigation into the collapse of the UnitingCare Partnership contract in Cambridgeshire and Peterborough found that bidders

“faced significant difficulties in pricing their bids accurately due to limitations in the available data”.

The evidence I have seen in the documentation suggests that that is now happening.

We should all be very worried about that, because failed procurements in Staffordshire for cancer services and end-of-life care, and in Cambridge and Peterborough, had similar procurement processes to the one chosen by Bristol, North Somerset and South Gloucestershire CCG. In each case, there was a secretive process, a complex procurement methodology and a failure to engage. Together, they cost taxpayers millions, and they all failed. Instead of learning lessons, NHS Improvement and the CCG seem intent on repeating the mistakes.

[Darren Jones (Bristol North West) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does she agree that the complexity of the procurement process and the difficulty that she—an expert in this area—is experiencing means that patients who rely on these services and workers in not-for-profit organisations, who deserve to know what the process means and what the outcomes will be for them, find it impossible to take part as important stakeholders?

[Karin Smyth]

Absolutely—I completely agree. That is why I will continue to speak up on behalf of my constituents; I know I have my hon. Friend’s support.

Predictably, I would like to finish where I began, on the issue of secrecy and a lack of transparency. As I have highlighted, this absurd behind-closed-doors approach has bedevilled the reprocurement from the off. If this is such a great change to community services, why are we not trumpeting it? Reprocurement was first referred to in governing body papers in May 2018, but other than that there has been virtually nothing. There was no official announcement, no media blitz, no news stories or television news clips, no leaflets in local GP surgeries or South Bristol Community Hospital to enable local people to have their say on the plans—nothing. Although there has been talk of consultation, it seems that only 20 people from south Bristol took part. In fairness, there were some nods to engagement, and surveys were completed by 196 people. There was an engagement planning workshop with patients, carers and the voluntary sector, but because it is a contracting process, they were asked to sign a confidentiality agreement.

There is no evidence that even that limited feedback has been listened to or acted on. The workshop was merely an illustration to bidders of what stakeholders might want to identify when community services are planned and delivered. Tellingly, in documents from January, the CCG stipulated:

“Formal public consultation is not required as part of the procurement as no ‘significant variation’ to services is planned at this stage”.

Why is it being done if there is no significant variation to services?

All the documentation—approximately 300 pages in total—is hidden behind a portal, including more confidentiality agreements. The whole process appears so desperate to avoid the merest hint of engagement that it screams, “We’ve got something to hide!” It is utterly self-defeating, and serves no one well—not patients, bidders, the CCG or the community at large.

The CCG says that it is seeking a consistent service across all three areas and both acute trusts. Two of the CCGs and one of the trusts have been in deficit for years, and at various times in the past few years they have been on NHS Improvement’s naughty step. The deficits are now being shared across the whole community. The jam is being spread more thinly and differently from how it was spread before. The process is being embarked on to help spread the already struggling and inadequate level of service more thinly. Those service providers are spending money that should be spent on services on a process that I believe will inevitably reduce community services in Bristol.

I have great respect for the Minister, but I have no confidence that the Government will be able to make any difference to the local position. I hope that she takes note of the variability in how the rules are interpreted locally, as the Health and Social Care Committee noted in its response to the legislative proposals for the NHS long-term plan. Other commentators are saying the same. I hope the Minister will reflect on this local example. Will she explain directly or through her officials why, when I wrote to the Secretary of State about this originally, I got a reply from NHS Improvement? NHS Improvement is the provider regulator; this is a commissioning issue.

I believe that the Government should rapidly respond to the proposals to remove the requirement for competition under the section 75 regulations. There is no reason to wait; they need to get on with it. This saga shows that the lack of investment in NHS services remains a problem. Why not just build capacity rather than go through these expensive tendering processes with providers outside the NHS? I actually support the place-based approach to service provision in the NHS plan, but I object to the fact that this reprocurement goes counter to that plan.

At the very least, on behalf of local people, I would like the Minister to support my calls to see the proposals before contracts are signed for the next 10 years. We need a local plan and collaboration with the local authority that meets our health and social needs. I want a guarantee that people in south Bristol will not be worse off. Currently, no one can give me that.

16:17

[The Minister for Care (Caroline Dinenage)]

It is a great pleasure to serve under your stewardship, Mr Gapes. I thank the hon. Member for Bristol South (Karin Smyth) for securing this debate. She spoke passionately on behalf of her constituents. It is right to bring such concerns to this forum. She asked the questions that any good MP should ask, and she has the right concerns. She spoke strongly about valued local services that no one wants to see lost, such as her Healthier Together service, and said that she fears for their future. I hope that some of the things I shall say will allay her fears, but if I do not cover anything she mentioned, we shall write to her to give her as comprehensive a response as possible.

Community services play a vital role, but we have perhaps not emphasised them as much as we should have done in recent years and decades, so we must put that right. Effective community services mean that patients are treated where they are most comfortable—often their own home—and supported to manage their conditions and live independently. More widely, they are key to improving the patient experience. They provide preventative care and prevent people’s illnesses and ailments from getting worse. Crucially, they prevent reliance on the big acute hospitals.

The NHS long-term plan sets out our vision for community services. It highlights the need to move away from small, narrowly defined and often poorly co-ordinated community services to those which are more joined-up and operate over a larger footprint. It also encourages much longer commissioning times, to enable us to build the relationships that we want to continue to establish. Importantly, it will make it easier for patients to navigate the system without having to repeat their story multiple times, and will ensure that their care is delivered in a smoother, more timely manner. To help to deliver on that vision, as part of the extra investment in the NHS long-term plan, an extra £4.5 billion per year will be spent on primary medical and community health services by 2023-24.

That is why ideas such as this, from local areas such as Bristol, North Somerset and South Gloucestershire, which embed community services as a central component of their plan in a way that mirrors the vision of the NHS long-term plan, appear very attractive. By awarding all its adult community services in a single contract, we can see that the CCG is aiming to promote a cohesive, integrated approach, which will improve consistency and efficiency across its entire geography.

The CCG’s 10-year funding approach also reflects the NHS long-term plan and will enable transformative change, through the kind of long-term relationships we need, based around strong, collaborative partnerships across not only the health and care system, but also the third sector, which the hon. Lady mentioned and which plays such a crucial part in the delivery of some of our most vital community services. We think that the length of the contract will allow the local area to design its services not only for the current need, but to address the future needs of its population, while also giving greater certainty to the workforce.

Additionally, the plans contain key commitments on community services set out in the NHS long-term plan. These include delivering care through multidisciplinary teams, the deployment of rapid response teams and providing services in central hubs located in people’s communities, where they can get the holistic support that will enable them to stay healthy and well.

We think that all those things will ensure that patients receive timely, integrated and holistic care in their community, with a greater focus on treating the whole person rather than merely their condition. This approach will join everything together, so that people no longer slip through the gaps or get pushed from pillar to post or from A to B, and it will provide a one-stop shop where people have a named contact and a real integration of community, mental health and adult social care services and the third sector.

The hon. Lady spoke with great passion and knowledge about the importance of transparency and engagement when deciding service provision, something that of course I entirely agree with. At the same time, it is right that these decisions are made by local areas, such as CCGs, local authorities, sustainability and transformation partnerships or integrated care systems, because those people decide how services should be configured to meet the needs of their local area. When they do so, we have clear expectations of them: they must involve patients, carers and the public in decisions about the services they commission, and be clear and transparent about their decisions.

That could be where we appear to have a difference of opinion between how the hon. Lady feels that her CCG has communicated and the way the CCG feels that it has. I have spoken at length to the director of commissioning and the chief executive, who say that in this particular case they have made considerable efforts to meet those expectations. They report that they engaged with 500 local people, including health and care professionals and representatives from the third sector, and that patients and carers have been supported to engage with the process through a public reference group, which I know she mentioned.

Additionally, the CCG says that it has engaged with a range of organisations and partners from across the local system, including hospital and mental health trusts as well as local authorities, to better inform the contract process. Those organisations have met bidders for the contract to discuss service provision. The CCG says that that collaborative process will help the contract holders to build relationships and allow patients to receive integrated services, which is what we all want.

The CCG also says that it has taken steps to ensure a transparent process, including press releases, letters to stakeholders, engagement events and making key information available online. Additionally, the CCG reports that the procurement is being overseen by a programme board that includes patient and carer representatives.

The hon. Lady made the point that it might be premature to go out for tender while the NHS long-term plan’s proposals for amending procurement requirements are being considered. That is a very good point, but unfortunately considerations around legislative changes do not change the CCG’s duty to comply with current procurement law, nor do they change its duty to use its resources as efficiently and effectively as it can.

The CCG has agreed that if the legislation changes during the procurement process it will review and evaluate that process, but more widely, by law it must ensure that there is no gap in access to services. Its contracts for adult community services will expire in the coming years, and by law cannot be extended. The CCG has informed me that if the procurement was halted, it would create the risk that when the current contracts expired, local people would be left without vital community services, which the hon. Lady knows they rely on. Of course, that simply cannot happen.

The hon. Lady also rightly noted that we must ensure that contracts are given the necessary external support and scrutiny. To that end, NHS England’s and NHS Improvement’s integrated support and assurance process—for which we use another of those attractive acronyms, ISAP—provides a co-ordinated, consistent approach to reviewing complex contracts, which is intended to ensure that complex contracts are cost-effective, robust and in the interests of patients.

On 17 October, NHS England and NHS Improvement held an early engagement meeting with the CCG, where they discussed this contract under ISAP. Following that meeting, NHS England and NHS Improvement were assured of the need to have a single contract that runs for 10 years. A full ISAP process is triggered when a procurement is found to be sufficiently novel and complex. NHS England and NHS Improvement found that in this case these requirements were not met, meaning that the full ISAP process was not required. Instead, NHS England and NHS Improvement regional teams will provide assurance that is informed by ISAP principles, which will include ensuring that the contract provides value for money, that it is centred around patient care and, crucially, that some of the key parts of patient care that the hon. Lady spoke about are not lost. The regional teams must also jointly ensure that the correct processes are followed, and that any chosen provider has the capacity and capability to deliver the services set out in the contract. Importantly, the regional teams must then give further formal, joint approval before the CCG can award a contract.

With that in mind, scrutiny of how we award contracts for delivery of health services is clearly vital. We must be assured that due care is taken so that patient outcomes are absolutely first and foremost, and that services are organised and delivered with prudent financial planning. To that end, NHS England and NHS Improvement will continue to closely monitor this contracting process. I welcome the close attention that the hon. Lady has paid to this contract; I know she has looked at it very thoroughly and I am grateful that she has raised her concerns. We believe that the CCG’s approach in this case is right, but we will continue to engage in every way possible with all parties to help ensure its successful delivery.

Question put and agreed to.

Puffin Habitats

Wednesday 26th June 2019 Westminster Hall

16:26

[Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)]

I beg to move,

That this House has considered puffin habitats.

It is a pleasure and an honour to be able to discuss the wonderful puffin here in Parliament. I have been trying to secure this debate for many months, as I have the great honour of being the MP who represents the largest proportion of the puffins who come to our shores every year along my exceptional, environmentally spectacular Northumbrian coast. Along those 64 miles of coast, within the boundaries of my constituency, can be found world-renowned habitats, which some of our planet’s rarest, funniest, cutest and most determined birdlife choose to make home for their families every year. From Lindisfarne to the 28 Farne islands and down to Coquet island, my constituency welcomes kittiwakes, shags, guillemots, black-headed gulls, arctic, little and roseate terns—in fact, 95% of the UK population of roseates are found on Coquet island—and the majestic and unique puffin.

The puffin is only a little bird, about the same height as a long ruler, with a wingspan of two rulers. That is the measurement used by schoolchildren at one of my schools in Amble, the fishing port that hosts the Amble Puffin Festival every spring bank holiday. The puffin seems to wear a black coat and has a bright white chest, with spectacularly orange feet to match its large bill. Puffins look somewhat ungainly on the ground; they are a little bit awkward and shy. However, when they take off for flight, we see just why the Atlantic puffin—Fratercula arctica, or the friar of the Arctic, so named because of its monkish black hood—is to be respected. The puffin flies like a fighter jet, setting its beak at the front of a streamlined body with powerful wings, enabling it to head out from its cliff-top base to plunge up to 60 metres into the sea to source sand eels or sprats to feed their young.

In Northumberland, we use the puffin’s arrival to the Farne islands and Coquet island as the harbinger of spring. The smallest of the world’s four puffin species, our Arctic puffins, arrive en masse to breed on our most remote, unpeopled and predator-free islands. They come to land only for breeding, and they arrive at our Northumbrian coastline from across the vast northern seas where they live a solitary, invisible life on the wing following the previous breeding season.

Spring is carnival time for puffins. They get to the safe cliff tops on Inner Farne and some of the other 27 islands and turn from solitary birds to wildly social courting birds intent on finding a mate and creating the next generation of puffins. If they can meet up with their mate from the previous year, they often do. Once they have found a mate, their outsized beak and big, webbed feet set to work digging a burrow in the soft earth. The female lays just one egg, and the couple take turns incubating it under their wings in the burrow, out of sight of other birds.

Predators might be rats or cats, so the management of islands where puffins choose to breed, and where human activity has brought threats onshore, is vital to puffins’ safety. The Farne islands are now managed by the National Trust and a team of rangers based on the islands all summer to monitor and protect this vital habitat. The islands sit within the Northumberland marine special protection area and are now included in the latest set of UK conservation zones. The trust has monitored numbers on a five-yearly basis for decades, and the 2018 census showed some 44,000 pairs of puffins, up from 40,000 in 2013, so Northumberland colonies are in great health at the moment. The National Trust has been doing this monitoring for more than 50 years, which has helped us to keep abreast of colony size and to work out, where there have been drops, what might be causing them. It is great news that the trust now plans to monitor numbers formally on an annual basis to help inform the climate change debate as fully as possible.

Puffin parents share feeding duties, as they do incubation roles, although the female seems to make most of the trips—might that sound familiar, gentlemen? She will fly out from the island and dive for sand eels, coming back—as so many photos of our wonderful bird show—with a beakful of fish. She has to dodge the gulls, skuas and terns that would like to help themselves to her supplies. That fighter jet skill can be seen by visitors to the Farne islands, coming by boat from Seahouses, as puffins whizz past other species and come in to land—those big orange feet acting as brakes right next to the puffins’ burrow—to deliver lunch to their baby puffling.

Beyond safe, predator-free habitats for burrows, the continued breeding health of the Arctic puffin is dependent on the state of the sea around the locations from which their food sources come. A plentiful supply of sand eels, sprats, baby herring or capelin is vital if the puffins are to breed. This critical factor was first demonstrated to me on the Farne islands, which my family and friends visit every spring to be amazed and awed by the influx of wildlife for the breeding season. Suddenly, one year, there just seemed to be fewer puffins. The breeding success rate was low. Locally, a sense of panic set in that it was all over for the puffin.

Thankfully, that was not the case. Rather, for reasons best known to the sea, there was a dearth of sand eels that year, and so the puffins simply did not breed, knowing that there was not enough food for their young. Nature’s wildlife has a way of regulating itself for its own survival. Reassuringly, the numbers grew again in the years that followed, back up to the colony size we see now, as food supplies have remained abundant since that weird year.

The other direct threat to our puffins each year is stormy seas. I have been updated just today by one of our National Trust rangers, Gwen Potter—who looks after the Farne islands puffins and other nesting birds, such as my dear friend the eider duck—that a recent high tide and stormy sea came over the normal high water mark and drowned some 300 of our puffins and their baby pufflings just a few days ago. Some might say that that is just nature, and sometimes she is brutal, but how we manage our environment on a global scale, as well as a local one, remains a challenge.

While our UK puffin population is in rude health and we invest in looking after their unique habitats, around the world the Arctic puffin is not doing so well. In 2015, it was announced that the puffin is now classified as “vulnerable to extinction”; Fratercula arctica is now on the red list. The Northumbrian monks of old, who communed with nature on Lindisfarne and the Farne islands—perhaps most famously St Cuthbert, who died on Inner Farne in 687 AD—would be horrified that we have failed to live in better harmony with nature in recent centuries.

Different breeding grounds, even around the UK, are in different states of health. Tagging and monitoring tells us that, from some breeding sites, puffins have to travel up to 400 km to find food for their young. Whether from overfishing, weather impacts altering water temperature and stormy sea levels, or food sources being much further away, we have trouble ahead. If the fish that puffins find are smaller because the temperature of the North sea shifts the sources of plankton that supply sand eels, more effort expended for less outcome can only have a detrimental impact.

I appreciate that the Minister cannot single-handedly restore our oceans and seas to balance and good health, and nor can he control the weather—I do not think—but we can, as a country and as a Government, ensure that we support those who manage puffin colonies with vermin control and good data monitoring, so that we can have an early and thorough understanding of causes of change or decline. I challenge the Minister to discuss the falling numbers of puffins in Norway and Iceland and whether it is acceptable anymore to eat puffins, since they are taken from breeding grounds.

While millions of birds sounds like a large number, it takes only a few years of poor breeding—there have now been nine years in Norway—for there to be a sudden and irreversible drop in numbers. The challenge of shipwrecks and oil spill impacts for food sources for many years is also a concern, and I ask the Minister to speak with his Department for Transport colleagues, who work globally to improve the safety of shipping activity.

As well as the opportunity to share the wonderfulness of another species centred in my beautiful constituency—hon. Members will recall our discussion on the eider duck, and I give many thanks to Ministers for including her in the list of protected birds in our new marine conservation zone—I hope this debate provides a good opportunity to highlight not only concerns that can be alleviated, at least in part, by local and national co-operation and forward planning, but some of the global risk factors, on which we must advocate, as a nation who lives by her word, as we move to a way of life that considers in the round the impacts we have on our wildlife.

16:37

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

It is a pleasure to serve under your chairmanship, Mr Gapes. I thank my hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) for securing the debate.

Puffins are perhaps the most remarkably odd-looking birds to call the UK home. They look to have been drawn by a 1930s cartoonist, with a black-and-white body resembling a gent’s evening attire that is augmented in the summer breeding season by a vibrantly coloured bill. Puffins are often referred to as sea parrots on account of those bright bills, and we in the UK benefit from more than 500,000 breeding pairs—roughly 10% of the world’s population—although, as has been said, they are at risk. It is sad to note that, according to the Royal Society for the Protection of Birds, puffins are on the red list, in need of urgent action to conserve them for future generations and to avoid the potential global extinction that has befallen other members of their extended family.

One of their habitats is off the beautiful Ayrshire coast in my constituency, on an island formed from a volcanic plug known as Ailsa Craig—a landmark famous for not only its birdlife but the blue granite used for the curling stones used throughout the world. These curling stones are manufactured in Mauchline in Ayrshire, albeit not in my constituency. When drivers head from Glasgow to Ayr on the A77, the island dramatically dominates the horizon for a moment and appears to travel with them on the coast road to Culzean castle.

On Ailsa Craig, puffins may nest either in sandy burrows vacated by rabbits or in crevices on the cliff-like ledges. Their ability to fly—rather clumsily at times—is outshone by their superb swimming and diving skills. Years ago, homeowners and tenants on the now uninhabited island had the right to take the island’s birds for food and feathers. However, according to author and photographer Charles Kirk, who spent some time on the island, it took approximately 1,152 puffin feathers to make a bed—I have no idea who counted said feathers. Thankfully, the puffins are now protected by the Wildlife and Countryside Act 1981.

Undoubtedly, the population has—excuse the pun—ebbed and flowed somewhat. Puffins start at a disadvantage, producing only one chick per breeding season, and although a puffin may live for 20 years or more, it does not breed for the first five years of its life. A lot of work was undertaken on Ailsa Craig to rid it of diseased rabbits and predatory rats, to encourage the puffin colony to multiply. Those animals, brought over on visiting boats and vessels, meant that, by the 1930s, puffin numbers had seriously declined. A concerted effort began, and I am pleased to note that, by 1991, the island was once again rat free, and puffins were returning in greater numbers to breed. We need to ensure that such predators do not again secure a foothold on the island and threaten its puffin colony.

Puffins are currently the subject of the RSPB’s—this is hard to say—Puffarazzi project, a request for the public to submit photographs of feeding puffins. There has been a very positive response from the public. It is clear that these little and sometimes comical birds captivate us and are a huge draw for tourists. Indeed, the last ocean-going paddle steamer, the Waverley, used to offer trips around Ailsa Craig and out to Staffa for the public to view the puffin colonies and colonies of other seabirds. In the absence, for the moment, of the Waverley, Mr McCrindle, with his small vessel the MFV Glorious, offers wonderful trips from Girvan to Ailsa Craig—a magical trip that I have experienced many times.

Only at the end of last week, puffins were again in the news. The item referred to water temperatures rising with climate change, threatening the puffins’ continued existence. Their mainstay diet of small fish such as herring and sand eels are themselves not exempt from environmental changes and human intervention, in addition to the ongoing problem of plastics polluting our seas.

I hope my right hon. Friend the Minister will be able to give us an assurance that when the Government address climate change and marine pollution, they will not forget not so much the flight of the puffin as the plight of the puffin.

16:41

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I commend and congratulate my hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) on securing this very interesting, useful and practical debate. On a day when so many of us, from across the House, have been meeting constituents and talking about the strategic challenge of climate change, we have an opportunity now to discuss one very small aspect of it that is nevertheless very important, because part of thinking about our responsibilities and responding to the challenge of climate change is thinking about what more we can do to protect our natural environment.

As my hon. Friends the Members for Berwick-upon-Tweed and for Ayr, Carrick and Cumnock (Bill Grant) have demonstrated powerfully, our constituencies, and particularly the coastal constituencies in this country, are home to myriad fascinating and curious creatures—all kinds of wonderful wildlife—and the puffin has a place in our affections that probably few other birds do. That is very important for us in Pembrokeshire, where my own constituency is located. We have the island of Skomer, just off the coast of Pembrokeshire. Skomer is world famous among birdwatchers for being home to not just the puffin, but so many other species of seabird: Manx shearwaters, guillemots, razorbills and so on. Actually, this time of year is a wonderful time to visit Skomer. I would encourage you, Mr Gapes, and any other colleagues here this afternoon to do so. If you have not visited Pembrokeshire, you absolutely should, and if you have not been across to Skomer island, it is well worth it. There are boat trips six days a week to take people on to the island; it is a short boat ride across the choppy water, and at this time of year, when there are so many puffins breeding and some of the other species there, it truly is a sight to behold.

I want to use this opportunity not to repeat any of the incredibly effective descriptions that my colleagues have already given of the curious characteristics and the attractiveness of puffins, but just to flag up a couple of things in relation to Skomer island. First, I place on the record my thanks for the work of the Wildlife Trust of South and West Wales. It manages the island of Skomer and does so extremely effectively. I have talked about the daily boatloads of visitors to the island; it caps them at 250 visitors a day. About 20,000 visitors a year go on to the island, and about 2,000 people will benefit from an overnight stay on the island. Many more people get to observe the island on boat trips where the boats do not land on the island itself. The puffin therefore plays an important economic role in my constituency by attracting tourists—not just from around the United Kingdom, but from all over the world—who want to come and see these very special seabirds in the wild.

With that comes a challenge. Yes, the wildlife trust’s cap of 250 visitors a day is very important, but a warning has been flagged up recently about photographers. There is nothing more wonderful than going on to Skomer island with one’s phone or a camera and trying to capture an image of one of these wonderful birds in the wild. They look stunning, they look curious and they are comical, as my hon. Friend the hon. Member for Ayr, Carrick and Cumnock—he is my good friend—mentioned a few moments ago. But that has meant that people have been striving harder and harder to capture a wonderful picture of the puffin, and unfortunately damage is being done to some of the burrows. It is unintentional. I do not think anybody would have a day trip out to Skomer with anything other than a desire to be a benign influence and not cause any harm, but incidental negative impacts do happen, so we have had a warning recently that photographers need to take care on the island. My hon. Friend mentioned the RSPB’s Puffarazzi campaign, whereby it is encouraging people to go out and take photographs of puffins, especially puffins that are feeding, because although this bird has been watched and observed for years and years by so many people, there is so much that we do not know about the species. The RSPB is trying to learn more about the puffin’s feeding habits and other behaviours, so it is encouraging members of the public to go and take pictures. But I would urge caution: photographers, both amateurs and professionals, need to take care.

We had a slight disruption to the overall growth in the puffin population locally in 2014, when we had a winter of very bad storms down in west Wales. Because of the weather patterns and the sea being churned up, puffins were literally starving. My hon. Friend the Member for Berwick-upon-Tweed said that nature has a wonderful way of self-regulating, and it is true. We have seen growth in the puffin numbers on Skomer island in Pembrokeshire. It is one of those places that is being observed more and more in order to understand why colonies can be so healthy and grow so much. In fact, the growth on Skomer has created challenges, because the puffins are now almost invading the space of the Manx shearwaters. Hon. Members may be able to imagine the tussle between those species, both of which we want to protect; we want them to flourish. All these things are being observed and watched, and where there is a need for human intervention, the wildlife trust does that very well.

I am grateful to my hon. Friend the Member for Berwick-upon-Tweed for securing the debate. It provides us with a useful opportunity to say some things that I hope will be constructive about this wonderful little species that enriches our lives and our nation in its own little way. I look forward to hearing the Minister’s thoughts and ideas on what more can be done to ensure this species continues to grow in our country.

16:47

[John Mc Nally (Falkirk) (SNP)]

It is always a pleasure to serve under your chairmanship, Mr Gapes. I thank the hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) for securing the debate. She represents an exceedingly beautiful constituency, and it is an absolute pleasure to pass through it by train on the way home. Many people admire the view of the area from the bridge; it always takes people aback.

The Atlantic puffin is widely distributed on islands around Scotland’s north and west coasts, and to anyone wishing to have a great day at the seaside, I recommend the Firth of Forth, just off the coast at North Berwick, as a particularly interesting viewing point, where anyone can watch—the boat trip out to the Bass Rock may be just a wee bit better than the one at Ailsa Craig—the puffins, gannets and peregrine falcons, among many other birds, and seals feeding and going about their business. It is not too far from my Falkirk constituency, so it is worth the day trip.

Elsewhere in the UK, puffins can be found in northern England, in south-west England and in Wales, as has been said. The UK population is estimated to be about 500,000 birds, or perhaps more, and although the population is not under threat globally, some populations have suffered marked declines in recent years. With half the UK population nesting at only a few sites, it is sadly, as others have stated, an amber or a red list species in the UK.

Puffins spend most of their lives at sea, coming ashore only to breed; in Scotland, that takes place from late April until mid-August. Although the breeding birds have been well studied, much less is known about the birds’ lives at sea in the winter. Population decline has been linked to changes in the numbers and distribution of their fish prey, probably caused by rising sea temperatures and the general mismanagement of the marine environment, and similar trends have been recorded in other UK seabirds.

Scotland’s vital position at the edge of the north-west European continental shelf has a huge influence on our coast and seas. The Scottish Government are, of course, committed to the protection of that environment. The Scottish Government have added some 42 marine protected areas to their network since 2012 and have developed a strategy for the next six years, to provide continuity of development to that MPA network.

It is striking that, as is nearly always the case, the greatest threats to puffins are man-made. As we are aware, our marine environment has been shaped by wind, water and ice over thousands of years, creating productive and abundant marine life. The meeting and mixing of nutrient-rich waters provides the perfect home for sea life to thrive. Scotland is of international importance for its marine biodiversity, providing the ideal environment for our spectacular birds, marine mammals and fish, as well as for the habitats that are hidden on the sea bed.

A staggering 45% of Europe’s breeding seabirds live in Scotland—around 5 million seabirds. Special protection areas are classified under the EU birds directive, which requires the member states of the European community to identify and classify the most suitable territories, in size and number, for certain rare or vulnerable species. SPAs are intended to safeguard the habitats of the species for which they are selected and to protect birds from significant disturbance.

The Scottish MPA network has changed considerably in recent years and now reflects the variety of life found in our seas. There are 217 sites in the Scottish MPA network, which protects 22% of our seas. Published guidance on how best to manage the puffins’ habitat includes improved management of the marine environment for our fish, protecting their nest sites, controlling ground predators and reducing disturbance, as has been mentioned. Although puffin colonies are a big draw for tourists, visitor access needs to be controlled to minimise disturbance to parent puffins and prevent destruction of burrows by trampling. Scottish Environment Link asks Members of the Scottish Parliament to lend political support to the protection of Scotland’s threatened wildlife by becoming species champions; the champion for puffins is Claire Baker.

Over the next six years, the focus will be on finishing ongoing actions to complete our Scottish MPA network, deliver any necessary management measures and continue the monitoring programme. The aim is to be able to report more authoritatively on MPA status in 2024. In order to complete the Scottish MPA network, nature conservation proposals are being progressed for sea birds, including the very interesting development of a deep sea marine reserve to safeguard marine life that is under threat in deeper waters across the north-east Atlantic. In order to ensure that the MPA network is well managed, work is also ongoing to ensure that public authorities get clear advice to inform their decision making when an MPA may be affected.

When innovative approaches to MPA management planning are being trialled, it is extremely important to work with local communities and other stakeholders to develop them. The examples I have just given show excellent partnership and collaborative working practices. Marine Scotland is also leading a research programme that focuses on Scotland’s seas. It includes work that the Scottish Government are funding to better understand the potential environmental impacts of marine renewable energy.

Puffins are an indicator species. While they are at risk from birds of prey, the biggest threats to their population are man-made. Pollution, overfishing and, perhaps most significantly, climate change are all reducing the population. I was struck by the comment made on the excellent BBC “Landward” programme by an RSPB warden in the Northern Isles at the weekend. Commenting on the distance that puffins have to travel for their food, she likened it to having to travel for Glasgow for her tea and then back again. That is not sustainable, and numbers will suffer.

To protect puffin habitats, we should remember that the world is given to us to till and nurture, not to own and plunder. That is a stark reminder of the responsibility of Governments around the world to protect the marine environment for the benefit of the wildlife for which it is home.

16:54

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Gapes. I congratulate my friend, the hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan). We largely co-operate on defence matters, but we can now add puffins to our areas of co-operation. I suspect we will both be speaking in the combat air strategy debate tomorrow; I like her analogy of puffins as fighter jets and I look forward to hearing her mention puffins in the debate on the Tempest programme tomorrow.

It is true that every bird matters, but as we have heard, every puffin matters, too. Before I get into the detail, I would like to share my favourite puffin story. As we have heard, we all have our favourite. Mine relates to the puffins on the Skellig islands, off the west coast of Ireland. Sci-fi nerds may already know what I am about to talk about. The Skellig islands were used as a filming location for “Star Wars: The Last Jedi”. There were so many puffins as they were trying to film Luke Skywalker’s last hangout that they could not airbrush the puffins out of the movie, so they decided to turn them into their very own Star Wars species and the porgs were born. Watching “Star Wars: The Last Jedi”, Members will see plenty of porgs around Luke Skywalker’s coastal hut—and they are indeed puffins. That is a bit of bedtime watching for the hon. Lady.

It is true, as we have heard, that human activity is affecting the habitats of many of our planet’s valuable wildlife species. Through irreversible climate change, habitat destruction and biodiversity loss, we are making the survival of species that we love and appreciate increasingly difficult. In a debate last month, we heard about the cruel practice of the netting of bird nesting sites, preventing sea birds from nesting on some cliff faces. In that debate I made it clear that we must not keep squeezing nature into smaller and smaller spaces. Given what we have heard about puffin habitats, they are already in very small spaces geographically.

Britain is home to around 10% of the world’s puffin population, with nearly 600,000 breeding pairs, often found in clusters around the coastline of the British Isles. It is brilliant to hear of the experiences of various hon. Members with the puffin populations in their own part of the world. The right hon. Member for Preseli Pembrokeshire (Stephen Crabb) spoke about Skomer island. The hon. Member for Ayr, Carrick and Cumnock (Bill Grant) spoke about the west coast of Scotland. In the area that I represent, the south-west, we have puffin populations on Lundy island off the north coast and on the Isles of Scilly.

On Lundy we have had a similar experience to that mentioned by the hon. Member for Berwick-upon-Tweed in relation to tackling invasive species. On Lundy we are beginning to have a puffin comeback. After many years of puffins being on the brink of eradication, a programme to deal with the accidental introduction of rats from visiting boats has started showing good results. Thanks to the Lundy seabird recovery project, puffin numbers are now increasing. This is a great example of how targeted action can bring great results, correcting the damage that humans have done to these vital habitats.

Puffins are found in small clusters, which leaves them more susceptible to changes in local fish populations, as we heard from the SNP spokesperson, the hon. Member for Falkirk (John Mc Nally). Puffins are on the RSPB’s red list of conservation importance, which means that urgent action is needed to prevent their decline. In the Isles of Scilly, we have witnessed the success of the seabird recovery project—the hon. Member for St Ives (Derek Thomas) is not present today, but he asked me to mention that on his behalf. That EU-funded project has done some great work in removing items of rubbish and in eradicating invasive species on the islands, leading to the fast recovery of the populations of the Manx shearwater and the puffin. Will the Minister, in his remarks, set out what plans the Government have to replace specific EU-funded schemes, such as that one, which deal with rare bird habitat protection?

The RSPB describes the main threat to puffins as a change in the distribution and numbers of small fish. Drastic changes in the numbers of small fish in the local area around puffin habitats can occur if there is increased pollution, as we have heard in the debate, whether from plastic or other pollutants such as oil. Overfishing in those areas also poses a threat, with sustainable fishing paramount for the survival of seabird species.

The Minister will be aware that his Conservative colleague the hon. Member for Waveney (Peter Aldous) has tabled an amendment to the Fisheries Bill to ban sand eel fishing. As the hon. Member for Berwick-upon-Tweed noted, sand eels are a key part of a puffin’s diet, so I would be grateful if the Minister set out the Government’s position on sand eel fishing and on that amendment.

[Melanie Onn (Great Grimsby) (Lab)]

Does my hon. Friend have any thoughts about the additional assistance that inshore fishermen could provide in making the environment for puffins free from pollution, and in supporting their habitats?

[Luke Pollard]

Yes. Fishers have several important roles to play, one of which is dealing with ghost gear. Although puffins are small birds, they are susceptible to eating plastic. Dealing with ghost gear—discarded fishing gear—is an important part of addressing that problem; I know that fishers in my hon. Friend’s constituency and mine are taking steps to deal with it. Not only is it an expensive cost to the business, but it presents a real risk to wildlife and bird habitats. I urge my hon. Friend to keep encouraging fishers in her constituency to tackle plastic pollution, as I know she does already.

On the subject of plastic pollution, I must mention nurdles. Several hon. Members have noted incredibly worrying issues with puffins’ diet and their ability to survive in the long term. As well as eating sand eels and other fish, puffins also eat plastic. A variety of studies of dead puffins washed up on the beach have found that, when cut open, their stomachs prove to be full of nurdles. Nurdles are small pieces of plastic that can be melted together to make larger items, but they are also a consequence of macroplastics being broken down. Puffins’ stomachs, like those of other seabirds, are full of plastics, which prevent them from getting the necessary nutritional value from their food.

Just as we have a limited understanding of what puffins get up to at sea, we lack scientific knowledge about the effect of plastics on certain bird populations, of which puffins are a good example. I know that there has been much research in Scotland about seabirds and plastics, but I would be grateful if the Minister set out his vision for dealing with the scientific evidence base. If we had a true understanding of the effect of plastics on puffins and other seabirds, it would make it easier for the public to get behind action.

Seabirds are protected by a network of marine special protection areas, and I am pleased to hear that the Government have granted the application for such an area in the constituency of the hon. Member for Berwick-upon-Tweed. It is also good that the eider duck has been included among the protected bird species; I have heard the hon. Lady speak several times about its importance, and it should not be left out.

I would like a network of national marine parks to be created around the UK, which would provide an opportunity to put our complex system of protected marine areas into plain English. We already have a network of marine conservation zones, designated European marine sites and sites of special scientific interest—the list goes on. However, there are so many forms and designations of marine protection that it makes it harder for the public to access those sites. The Government’s review of national parks gives us a real opportunity for the development of national marine parks. The Minister will know that Plymouth City Council is leading work, which enjoys cross-party support at a local level, to establish the first national marine park in Plymouth Sound. Protecting more marine areas would contribute to greater understanding and public awareness—the right hon. Member for Preseli Pembrokeshire mentioned the Puffarazzi project—and would underline the importance of taking care when visiting puffin habitats.

I am very pleased that the House recently agreed to Labour’s motion to declare a climate emergency, after an important debate that showed that this place is taking climate change seriously. I know that hon. Members from all parties will have visited climate change protesters at the Time Is Now climate protest today. Although we need to decarbonise our economy, we must not think of climate change as being only about carbon; we need to think equally about how to protect and conserve coastal habitats, bird nesting sites and feed, as we have heard today.

I am grateful to the hon. Member for Berwick-upon-Tweed for giving us a chance to tell our favourite puffin stories; I hope that more people will be able to do so over the weeks and months ahead. I know that the Minister has a full to-do list at his Department, but I hope that he will take seriously the concerns that have been voiced about our wonderful, brilliant, comical puffins, and take note that their decline is a sign of humanity’s intervention regarding our wildlife. We need to do more to protect puffins, which will also save and protect other important habitats and seabird populations.

17:04

[The Minister for Agriculture, Fisheries and Food (Mr Robert Goodwill)]

I congratulate my hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) on finally securing this debate. I thank all hon. Members who have contributed.

The UK is particularly blessed with seabirds. Indeed, it hosts over half the seabirds in the European Union during the breeding season, with approximately 3.5 million pairs across 26 species. The debate has given us an opportunity to celebrate that rich diversity, from Ayrshire to Berwickshire to Pembrokeshire. I suggest that the best place to view puffins is probably at Bempton Cliffs, which hon. Members will not be surprised to hear is in Yorkshire.

The Atlantic puffin is one of the UK’s most instantly recognisable and well-known seabirds. As our puffin champion, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), will attest, it is a creature close to our hearts. Its endearing features have been used as the symbol of children’s books and to illustrate many stamps, and it was even one of the 10 shortlisted birds in the vote to find Britain’s national bird—a contest that was eventually won by the robin.

I am species champion for the sand eel, so I am always nervous around my hon. Friend, given the proclivity of puffins to consume sand eels in large quantities. The sand eel is a species close to my heart, not least because of the work I did and the knowledge I gained in the European Parliament, looking at issues on the Dogger Bank, marine dredging and other forms of exploitation of sand eels that can have an effect on the environment if they are not done sustainably.

Puffins typically nest underground in burrows dug in the soil of offshore islands. They often mate for life, and pairs return to the same burrow year after year, if possible. The typical lifespan of a puffin is 18 years, but some have been known to live to 35. Sadly, the puffin is now listed as vulnerable by the International Union for Conservation of Nature and its global population is in decline.

The puffin is doing well in the United Kingdom, however—particularly on Coquet island, which lies off the coast in the constituency of my hon. Friend the Member for Berwick-upon-Tweed in Northumberland. Populations there have been gradually increasing since counts began in the 1980s. Indeed, populations in the north-east are generally considered to be stable, and the UK experienced an increase of almost 19% from 1988 to 2002. Considering that approximately 10% of the global puffin population breeds around Britain and Ireland, that stability is an important contribution to global numbers.

In the 19th and early 20th centuries, Atlantic puffins were heavily exploited for eggs, feathers and meat, causing a drastic reduction in populations and the elimination of some colonies. In England, puffins were considered a delicious food and were sold at the rate of three a penny. Since then, I am pleased to say that we have dramatically increased their protection.

Concerns were raised about the population in Norway. I plan to visit Norway over the summer, and that is one of the issues that I am likely to raise—along with the fact that, like Norway, we will very soon become an independent coastal state and be able to negotiate a better deal for the fishermen in the fantastic ports around our country, including in the constituency of the hon. Member for Great Grimsby (Melanie Onn).

Our seabirds are protected principally by special protection areas set up under the wild birds directive, and by sites of special scientific interest set up under domestic legislation. SPAs protect areas identified as being of international importance for the breeding, feeding, wintering or migration of rare and vulnerable bird species found in Europe. There are currently 47 marine SPAs that protect seabirds in English waters.

England’s largest breeding colonies of Atlantic puffin are found on the Farne islands and Coquet island, where populations have been increasing. The islands have been protected by SPAs since 1985, and puffins’ foraging grounds were protected in 2017 as part of the Northumberland marine SPA. That is one of the most important sites in the UK for Atlantic puffin.

As well as using these protected waters for feeding during the breeding season, puffins and other species also use them for other important activities, such as preening, bathing and socialising. These activities are all part of the behavioural repertoire for which they need undisturbed waters. Protecting both their nesting sites and foraging grounds gives iconic species such as puffins the best possible chance of breeding.

Unfortunately, we know very little of the puffin’s behaviour outside the breeding season. They are very difficult to monitor as they spend up to two thirds of their lives at sea. Those from north-western Britain disperse widely outside the breeding season, as far as Newfoundland in the west and the Canary Islands in the south. In contrast, most puffins from colonies in parts of eastern Britain, like Northumberland, remain within the North sea.

Puffins are a key part of the marine ecosystem and good indicators of the overall state of the marine environment, including the damaging effects of climate change. That is because their diet consists mainly of small fish, particularly sand eels, whose spawning season is affected by variations in sea temperature impacting upon their own prey of plankton. The puffin breeding cycle is less adaptable. If the sand eels are not available at the time that puffins are breeding, it affects how many birds breed and how many chicks they raise.

In 2000, our friends in the Scottish Government implemented a sand eel fisheries closure in an area off the east coast of Scotland to preserve this important food source for our seabirds. Other pressures on puffins related to climate change include the increasing frequency and intensity of storms, which have had a considerable impact. Indeed, in the winter of 2013-14 a succession of severe storms resulted in 54,000 seabirds being washed ashore, over half of which were puffins. This mass mortality had a serious knock-on effect on the breeding population.

As we have heard, puffins also suffer from the effects of pollution, particularly plastic pollution, and from predation by ground mammals such as rats. On Lundy island in the Bristol channel, the total population of puffins fell to just 13, largely due to rat predation. However, 15 years later and following the successful eradication of rats, the island’s puffin population has come back to life, with numbers soaring to 375. Although that number may appear small when set against the UK’s total population of 580,000 breeding pairs of puffins, these important birds produce only one puffling, or baby puffin, per year, and they are limited to a small number of breeding colonies. So protecting these sites is imperative.

To make sure that our puffins are sufficiently protected, my Department commissioned a review of the UK’s terrestrial and coastal network of SPAs. I am pleased to note that the first phase of the review, published in October 2016, concluded that the SPA provision for puffin breeding is sufficient.

Puffins will indirectly benefit from this Government’s plans in several other ways. Our 25-year environment plan sets out how we will fulfil our ambition to leave the environment in a better state than we found it, building on existing strategies and identifying key areas of focus. We want even cleaner air and water, richer habitats for more wildlife, and an approach to fishing, agriculture and land use that puts the environment first.

Globally, less than 10 per cent of the world’s seas are currently designated as marine protected areas, which is one of the most important ways to protect precious sea life and habitats from damaging activity. However, at home in our waters, we are at the forefront of establishing marine protected areas. We are committed to delivering a well-managed blue belt of protection around our coasts, and 40% of English waters are within marine protected areas. Just a few weeks ago, we created 41 new marine conservation zones, marking the most significant expansion of England’s blue belt to date. Within these zones, we are protecting species and habitats, such as the rare stalked jellyfish, the short-snouted seahorse and blue mussel beds. Two species of seabird are also being protected in these marine conservation zones: razorbills, off the Cumbrian coast; and eider ducks, along the Northumbrian coast. We discussed this protection in the previous debate on seabirds, which my hon. Friend the Member for Berwick-upon-Tweed also secured.

Overall, the UK now has 355 marine protected areas of different types, including SPAs, spanning 220,000 sq km, which is an area nearly twice the size of England. However, we are not stopping there. We recently announced a review to examine whether and how highly protected marine areas could be introduced for English seas. These are the strongest form of marine protection, which would stop all human activity that has the potential to cause harm in vulnerable areas. This review is being led by my right hon. Friend the Member for Newbury (Richard Benyon) and a panel of independent experts. It aims to establish criteria for designation and it will potentially recommend up to five pilot sites.

Of course, our blue belt would be meaningless without appropriate management measures to protect the sites. For example, activities that are damaging, such as the use of bottom-towed mobile gear, would either not be allowed or—if possible—adapted to allow them to continue in a way that does not damage habitats and enables sites to meet their conservation objectives. Regulators, such as the Marine Management Organisation and the Inshore Fisheries and Conservation Authorities, are responsible for making sure that no damaging activities take place in marine conservation zones, using a combination of byelaws and voluntary measures. These regulators will monitor marine activities to make sure that these measures are being followed.

We are a global leader in protecting the marine environment. Our updated UK marine strategy will include targets to ensure that good environmental status is achieved for seabirds, and it will also set the indicators we use to assess seabirds’ status and identify the pressures affecting them. We will continue to protect marine birds, for example, by reducing the risks to island seabird colonies from invasive predatory mammals, such as rats, by delivering the UK plan of action on seabird bycatch, and by reducing marine litter. The UK has a well-respected bycatch monitoring programme in place, which is run by the Sea Mammal Research Unit. The data that is gathered is currently being used to conduct a preliminary assessment of the extent of seabird bycatch across the UK, which will inform the initial focus of our plan of action.

As we have heard, plastic in the seas is a hazard for seabirds. I was pleased to take part in a debate here in Westminster Hall on packaging on Monday, which was secured by the hon. Member for Cambridge (Daniel Zeichner). Evidence shows that marine birds, particularly diving birds, can be injured or even killed by abandoned, lost or discarded fishing gear. Diving birds may become entangled in such gear when chasing fish, becoming trapped underwater and drowning. Indeed, as we heard from the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), the scourge of micro-plastics and nurdles impacts upon a whole variety of species, including puffins and other seabirds.

In 2017, the UK signed up to the Global Ghost Gear Initiative, a pioneering scheme to tackle lost and abandoned fishing gear on a global scale. Through this initiative, we are committed to working with our partners to address the management of existing fishing gear, and the mitigation of the potential effects of abandoned, lost and discarded fishing gear. In addition, the UK continues to lead the way in tackling the scourge of plastic pollution entering our oceans.

We recognise the importance of protecting the marine environment and we see the health of the ocean as key to tackling climate change. We have already exceeded the current global sustainable development goal to protect 10% of our marine and coastal areas by 2020, with 25% of UK waters currently protected. At the UN General Assembly in New York in September 2018, the Secretary of State for Environment, Food and Rural Affairs called for 30% of the world’s oceans to be marine protected areas by 2030.

My hon. Friend the Member for Berwick-upon-Tweed will be pleased to hear that we are extremely committed to protecting the marine environment as we leave the EU. Through the EU (Withdrawal) Act, we will make sure that marine protected areas set up under European directives, including SPAs, will continue to be effectively protected post exit. The Office for Environmental Protection will monitor and report on our progress, holding the Government to account. After we have left the EU, we will be able to manage our marine environment in a more dynamic and flexible way than is possible under the common fisheries policy. Using powers that we are seeking through the Fisheries Bill, the Marine Management Organisation will be able to apply byelaws to manage the resources of sea fisheries for conservation purposes throughout English waters.

I now turn to one or two of the points made by the hon. Member for Plymouth, Sutton and Devonport. He talked about disturbance of seabirds. That brought to mind an experience I had when visiting Immingham, which is not far from the constituency of the hon. Member for Great Grimsby, where I visited an oil refinery. I was told that it was probably the best habitat for a number of seabirds, because there were lots of things to perch on, such as fences and pipes, but I was told that the most important aspect was that there were virtually no people and in particular no dogs whatsoever.

We need to be very thoughtful about how we allow access to some of these marine protected areas, in the same way that we are in some of our national parks and other areas on land. Yes, it is great to have more public access, but we must ensure that the people who gain that access understand the effect they can have. Indeed, we heard from my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) how well-meaning visitors can sometimes cause damage.

The hon. Member for Plymouth, Sutton and Devonport asked me in particular about the funding of environmental schemes. We are a net contributor to the European Union, so there will be scope for innovative and UK-centric schemes, and I can reassure him that there will be no changes to funding. In particular, he mentioned the scourge of plastics, an issue on which we need to take global action. I was recently talking to a friend in my constituency who had been on holiday to Vietnam, and sailing down the coast he saw three separate locations where whole truckloads of plastic and other rubbish were being tipped straight into the sea. We in this country take plastic pollution very seriously, and important moves have been made to address plastic straws and other types of pollution and litter. However, looking around the world, we see some egregious examples of how pollution can cause problems.

The hon. Gentleman also mentioned sand eels, which I would like to say a little bit about, because they are an important component of marine food webs that provide food for many species of marine predator, such as seabirds, mammals and fish. The sand eel life cycle is affected by climate change, as warmer seas have a direct effect on plankton. The puffin breeding cycle is less adaptable, so if the sand eels are not available at the time puffins are breeding, that affects how many birds breed and how many chicks they raise. We also know that that varies annually, and in different parts of the country.

The RSPB’s citizen science project, Puffarazzi, is currently collecting data on puffin diet to complement research being done by several academic groups, which will give us an insight into puffins’ current diet and changes over time. There is some evidence that the exploitation of sand eels affects the wider ecosystem, such as causing a decline in seabird populations. For example, a recent study has found a correlation between kittiwake breeding success and sand eel fishing mortality, although there are many other factors that could have an impact on small fish populations, such as climate change.

The UK does not have a strong commercial interest in sand eels, although we have some quota that is fished occasionally. Most of the fishing of sand eels in UK waters is by the Danish fleet, although Sweden has a commercial interest. Fishing is concentrated around Dogger Bank, which in most years accounts for over 90% of sand eels caught in the UK’s exclusive economic zone. Sand eels are a quota species; the International Council for the Exploration of the Sea provides annual recommendations on the total allowable catch for sand eel in management area 1r, Dogger Bank. In recent years, with the exception of 2016, the TAC has been set in line with ICES’ recommendations. However, catches have often exceeded that TAC.

Sand eels are not used for direct human consumption, but their fishery provides livestock and aquaculture feed and fertiliser. Arguably, alternative ways to produce those goods that should not interfere with marine ecosystems and food webs would be more sustainable; however, we do not currently have evidence on whether production of alternative feed stocks and fertilisers would actually have a lower overall environmental impact. A sand eel fishery closure has been in place off the east coast of Scotland since 2000. It is prohibited to land or retain sand eels on board within the closure area, although a limited scientific fishery is permitted to monitor the stock.

Again, I thank hon. Members for contributing to the debate. I emphasise that we are a world leader in protecting our precious coastline, and we continue to increase protection in the UK to safeguard our puffins’ future. The relatively new Northumberland marine SPA is a welcome addition to that suite. With rising populations in some colonies, the UK continues to play its part in improving the chances of one of our most vulnerable and iconic species.

17:22

[Anne-Marie Trevelyan]

I thank the Minister for his comprehensive and detailed response to today’s debate. I look forward to the challenge of long-term rebalancing, through which we will have the opportunity to manage our waters and think in a much more holistic way than perhaps the common fisheries policy has given us the opportunity to do. I very much hope that we will be able to work together as we go forward, so that we can genuinely be a world-leading country in understanding that balance of decision making and ensuring we support those who work in our seas alongside those who look after our natural wildlife.

In the long term, we often discover that plants and animals that we did not appreciate before have a greater value holistically to our natural habitat, of which we are a part, than we perhaps understood. I thank the Minister very much for his detailed responses, and look forward to working with him on this issue in the months and years ahead.

Question put and agreed to.

Resolved,

That this House has considered puffin habitats.

17:24

Sitting adjourned.