Westminster Hall

Tuesday 21st January 2020 Westminster Hall

Tuesday 21 January 2020

[Mr Philip Hollobone in the Chair]

Growth Strategy

Tuesday 21st January 2020 Westminster Hall

09:30

[John Redwood (Wokingham) (Con)]

I beg to move,

That this House has considered the growth strategy for the UK.

It is a pleasure to serve under your chairmanship, Mr Hollobone. A most welcome change has occurred in economic policy since the advent of the new Prime Minister. We are now told that the aim of economic policy is to promote the greater prosperity of the many in the United Kingdom by means of promoting faster economic growth. The Prime Minister often adds “opportunity” to his justified enthusiasm for growth and greater prosperity.

I welcome that fundamental change, because that is what I have wanted our policy to achieve in recent years, at a time when my party and the general economic establishment thought that priority had to be given to a single, central aim of economic policy—the reduction of state debt as a percentage of GDP. The change of aim in economic policy to the monitoring of state debt occurred first under the Labour Government in 2009, when state debt got out of control. Before the Labour Government left office, they accepted the need to get state debt down, particularly the running deficit, from very high levels, and made some cuts. The coalition Government changed some of those cuts, but went on with that strategy, because they rightly agreed with the outgoing Labour Government that the deficit was far too high and unsustainable.

I supported that policy in those days, but in 2015-16, when the deficit was under better control, I became more concerned about the tension between the central aim of getting the deficit down and the need to promote growth, which, in the longer term, is the best way of getting the deficit down, because it generates more activity and more tax revenue. Therefore, I started campaigning for an economic policy based on the promotion of prosperity. I am delighted that we now have a Government with that as their central aim.

Our economic policy under the previous guidance, from 2009 to 2015, stabilised our position and reduced the state deficit, necessarily, by a substantial amount, without preventing all growth. However, that policy ushered in a period of lower growth than we had experienced prior to the banking crash, primarily because of the way the deficit was tamed. At the time, it was said that the deficit was tamed by big cuts in public spending, but it was mainly tamed by a massive increase in the amount of tax revenue collected from the domestic economy.

It is true that there were individual cuts and individual departmental budgets took a hit, some of which were very contentious on both sides of the House, particularly among the Opposition. However, public spending went up overall in cash terms, and arguably went up slightly in real terms over that period. The main challenge of getting the deficit down was achieved through a series of tax-rate rises and collecting extra tax revenue out of the modest growth that the economy achieved, without any relief of that tax burden. Part of the reason that we had slower growth is that we became a relatively higher tax economy than we had been before.

We have seen an experiment conducted on both sides of the Atlantic since 2016, when the Americans opted for eye-catching and dramatic tax cuts, both cutting the rates companies must pay and putting money into the pocket of every person with a working wage, with a particular emphasis on getting people on the lower end of the income spectrum to have more money to spend. That has proved extremely successful: the American economy has been growing at more than 2% for most of the time since the tax cuts kicked in, whereas the European side, sticking with the Maastricht requirements, deficit reduction requirements and relatively high taxes, has been struggling to grow at 1%.

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

I congratulate the right hon. Gentleman on securing the debate. He is making a powerful argument for growth across the UK. On the issue of differential employment and income rates, does he agree that if this is to be successful, we must see economic growth and higher wage levels spread more evenly across the UK, so that regions with a much lower wage economy start to see more wealth and employment at the higher end?

[John Redwood]

Indeed, and I welcome the emphasis placed on that by the Prime Minister and Ministers. I hope that we can give them some more ideas on how that can become realistic policy. I am just setting the scene: there has been a big change in the aim of policy, which I warmly welcome. I suggest to the Minister and others that lower taxes might be an important way of trying to develop that aim. The experiment conducted on both sides of the Atlantic seems to suggest that countries with the ambition and desire to cut taxes on working incomes and businesses will experience more growth and success. We have seen a lot of money repatriated to the United States of America by big businesses, which now find the tax rates acceptable and therefore do not require the same legal structures—I am sure they were behaving legally—to keep the money offshore or not to pay taxes for the time being in the United States.

The United Kingdom Government have, even during difficult times, decided on lower corporation tax rates. I think we have a competitive corporation tax structure. Our lack of tax competitiveness rests in the treatment of individuals and income, and employment costs, rather than corporation tax, where we have done a good job relative to continental Europe. We are benefiting from that. It was good to hear it announced this week that the UK is now the third preferred destination for technology investment after only the United States and China—two economies much larger than our own—and that we are attracting more investment than the combined totals of France and Germany, so we must be getting something right in our approach to business investment and the taxation of business profits.

The Government have already set out a new fiscal framework, which I welcome, because they understand that it is not sufficient just to set a new aim for policy—they need a fiscal framework to deliver it. They have directly addressed the issue of state debt, saying that they will not spend money on revenue matters that is not covered by taxation—a prudent control on the situation—but they have also said that there is nothing wrong with the budget deficit expanding from just over 1% to 3%, if the purpose is for good investment, especially given the very low rates that the Government now have to pay to borrow money.

I think that is a sensible compromise that gives us a bit of scope in the public sector. I trust it will also leave us scope to lower tax rates, which is important for getting extra growth from the private sector, where much of the growth will come from. Today, the Government’s 10-year borrowing rate—if they needed to borrow more money from the market—is 0.63%. One would assume that the public sector can find investment projects and get a return considerably above 0.63%, so I fully endorse what they are trying to do.

I hope we can accept the new policy aims and the new fiscal framework, which give us flexibility, and think about what additional policies the Government might need to adopt to boost that growth rate. I have been predicting for some time that we would have a marked slowdown in the United Kingdom, as a result of the fiscal tightening that we have experienced until now and the monetary tightening that the Bank of England has implemented. It has been very curious that the Bank of England has detached itself from the world’s central banks over this recent very marked slowdown in world activity. The slowdown was led by an actual recession in manufacturing in most parts of the world; the centre of the storm has been in the motor industry, but it has also extended more widely into the consumer and service areas.

The rest of the world’s central banks are busily fighting that, and so we have seen a succession of interest rate cuts in countries with interest rates that could still be cut. We have also seen a resumption of quantitative easing programmes in the European Union, after it perhaps rather foolishly abandoned them at the end of the previous year; we have seen continuous large quantitative easing programmes in Japan; and in China, we have seen a big reduction in the required capital of banks, so that those banks can lend more to the private sector and expand China’s economy, which has also slowed quite markedly.

I suggest to the Treasury Front-Bench team that they look very carefully at the centre of the downturn that we have seen worldwide and mirrored here in the United Kingdom, and in particular at the motor industry. The motor industry was hit by higher taxes on consumers in China; it was hit by changed emission regulations on the continent of Europe; it was hit in the United Kingdom by increases in vehicle excise duty in the 2017 Budget; and it was also held back by Bank of England guidance warning banks against lending too much money for car purchases, in a market where practically everybody buys a car on credit, rather than their having the cash to pay the considerable sums that cars cost these days. So there was a very predictable slowing of the UK car market, in parallel with the slowing going on elsewhere.

That was compounded by the fact that the UK had been incredibly successful at building a very large diesel car industry, and in particular a diesel car engine-making industry in the United Kingdom, just in time for the EU and the UK to become very hostile to diesels and send out the message that people really should not buy diesels, and that in future diesels may even be taxed or regulated off the road. There could also be new controls on diesels, with the Government, in common with the EU and other Governments, wanting people to buy electric cars before they felt confident enough in electric cars, or before the prices of electric cars come down to a more realistic level for them to be a feasible opportunity for people. So we have seen in the UK, as in China and in Europe, a big decline in the sale of traditional diesels, and there has not been an off-set in sufficient numbers by the new vehicles that are being introduced.

So the Government need to look at the car industry and recognise that the issues affecting it are a combination of taxation, availability of credit, and messages about what kind of car people are allowed to buy and drive. The industry needs to be given some time to complete the transition that Governments want, and it is not yet in a state where it can sell enough electric cars to immediately replace the lost capacity that it is experiencing on diesels.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I thank my right hon. Friend for securing this very important and wide-ranging debate. He mentioned the car industry, which is largely based in the north-east of England, but it based itself there because clear incentives for it to do so were provided by the Government at the time. Does he agree that if we are going to rebalance this economy and level it up, we will need some incentives for businesses to start up in or relocate to some of these areas?

[John Redwood]

Yes, I am happy for there to be attractive reasons why people should go to the parts of the economy that have been less heavily invested in and that are less pressurised. However, with cars the issue is demand; there is not enough demand for the very good cars that the industry currently makes. The Government want to change the kind of cars that people buy, but it will take time for Britain, or anywhere else for that matter, to be able to produce the millions of electric cars that the Government want us to buy, at a price and to a specification that people like.

So, this is a top-down revolution and the public are not yet fully engaged in it in the way that the Government would like them to be. When polled, the public say that electric cars are a very good idea. However, when they are then asked, “Well, when are you buying your electric car?”, the answer is, “Well, not yet. Not me. I want a better subsidy on the car, I want a lower price, I want a higher range”—whatever it is.

There are still issues about engaging the public, which is why we are getting this industrial dislocation. China has experienced exactly the same thing and one would have thought that China would have continuous growth in cars, because it is coming from a much lower level of car ownership and individual income. However, even in China car volume is down, because of the regulatory changes and the dislocation involved in going from traditional product to electric product.

In addition, the Minister and his colleagues should look at the issue of property. Property is a very important part of the UK economy. It is often an asset base for people to borrow against in order to develop their business, and it is often the main way in which individuals hold their personal wealth. By buying a house on a mortgage and gradually paying the mortgage off, property often becomes people’s principal asset, which gives them some wealth and financial stability.

However, we have a property market in the UK that has been damaged by the very high stamp duties that were introduced under the previous Government, and the Government should look at that issue very carefully. I do not think that the Government are even maximising the revenues from stamp duties, and it might not be a bad idea for them to ask, “What are the rates that would maximise the revenues?” At the higher price levels in property, transactions have been very badly affected; indeed, they have been massively reduced by the very high rates at the top end of the market. So, the Treasury constantly has to revise down its forecasts of how much revenue it collects from stamp duty.

A more free-flowing property market would be a very good thing, because it would create all sorts of other work for people who are in the refurbishment and removals business, and above all it would allow people to fit their property needs more closely to the property that they have. A lot of potential switching in the market is being frustrated: some people have houses too big for them but they do not fancy paying the stamp duty on the trade-down property, and other people would like a bigger property, but the stamp duty would be just such a big addition to the higher price that they would have to pay for that property.

[Peter Grant (Glenrothes) (SNP)]

I congratulate the right hon. Gentleman on securing the first Westminster Hall debate of the new Session. Does he agree that there has been a major problem in the United Kingdom for many decades, which is that people—for one reason or another—have been encouraged to treat the house that they live in not as a place to live but as a speculative investment, on which they expect to make money? Also, does he accept that many people have been severely stung, because they thought that they would be able to stretch for a mortgage that they could not afford, in order to sell the house for more money in 10 years’ time? If the value of the house does not increase in 10 years’ time, they have a problem. That situation caused the crash in 2007-08 and it has caused a number of minor crashes since then. Does he also agree that more needs to be done to make sure that people who only have the money that they are investing in their house are protected against the possibility of losing their house and everything else when the market crashes?

[John Redwood]

Most people buy a house because they want somewhere to live that is theirs, and that they can then do up and change in the way they see fit, subject to planning. But yes, of course, it is also a way of holding wealth, and I repeat what I said: for many people it becomes their largest single asset. I do not think that is a bad thing. I do not think that people are treating their main property as a trading counter; it is where they wish to live, and they will only move when they want a different house, mainly for living purposes. People would only be able to buy property speculatively if the property was their second or third house, and not many people are in the fortunate position of having such wealth.

There is no absolute protection against house prices going down; they do from time to time, as the hon. Member for Glenrothes (Peter Grant) pointed out. However, if someone’s aim is to live in a house long term, and if they have taken out an affordable mortgage, temporary fluctuations in house prices are not life-threatening or wealth-threatening to any worrying extent, and they will just live through the period when house prices dip because there has been a recession, or whatever.

Fortunately, we do not seem to be looking at such a situation in the immediate future, and it is very important that we have a growth strategy, so that the slowdown in the economy that we have experienced in recent months is turned around quickly and does not become something worse, which could have negative consequences in the way that the hon. Gentleman talked about.

So my No.1 message to the Government is not to underestimate the damage that clumsy taxes can do, and they may even end up costing the Treasury, as stamp duty has done, because it is not collecting as much as it should. That is probably the case with vehicle excise duty as well, because of the volume impact on new cars, which relates to a whole series of factors; it does not just relate to the vehicle excise duty, but that was another complication in the situation.

As the Minister has this particular responsibility, I urge him to look again at IR35. We want a very flexible economy in which people can choose flexible employment, rather than have it forced on them. We have had a relatively flexible small business sector, but it is being damaged by the top-down imposition of the IR35 rules. I hear all sorts of stories from across the country of people having to stop their contracting business or losing contracts because the big companies that might employ them are worried they might get dragged into a retrospective tax increase in employer and employee national insurance. That is damaging the small contracting sector, and I urge the Government not to carry on doing that when we want to encourage more self-employment and allow self-employed people to go on to build bigger businesses.

One of the Office for National Statistics figures I saw recently, which I found fascinating, was that in London there are more than 1,500 businesses per 10,000 people, whereas in the lower income parts of the country there are half that number. There is a huge gap between the volume of enterprise in London, which is the richest part of the country in terms of average incomes, and much of the rest of the country, where incomes could be higher. It is not easy to break into why there are so many more businesses in London. In part, it is because people are better off and have more spending money—demand is important in setting up a business—but it is also to do with the general business environment and the concentration of people, talent, enterprise and spending power that we see in the capital. We need to do something similar in other parts of the country. Building more businesses is crucial, and IR35 is getting in the way of doing that.

Some 4.5 million people in the country who work for themselves do not have any employees, and they are afraid of taking on an extra employee because of the implications, whether for regulation, tax or otherwise, or because they think it will be too difficult to manage. We need to look at that step up in building a business, when someone goes from just working for themselves to having an employee or two. It is important that we make that step as easy as possible, because if another million self-employed people decided that they wanted a single employee, that would be transformational. That would obviously create a lot of extra demand in the labour market.

We need to look at taxes on employment and the complications of employment. Anything that the Government can do to reduce the tax on employment is a very good idea. We cannot collect tax revenue just by taxing things we do not like, but where we have a choice, it is better to tax things we do not like rather than things we do like. All parties in the House like the ideas of well-paid jobs and of more work, so we need to work away in Government to see how we can reduce the burden of taxes on work such as the apprentice levy, the national insurance levy on both the employee and the employer and other concealed taxes on work.

We also need to look at taxes on entrepreneurship. A larger population of people who have great ideas, who can change markets and who can persuade others that they have something people might want to buy is vital to the process of creating a more prosperous United Kingdom. We need to ensure that the offer on capital gains tax in particular is a fair one. People who have built a business over the years should not feel that they will be taxed again on it all, because they have been taxed on the activity in the business. Capital gains has to be a fair regime, and I urge the Government to keep the enterprise allowance arrangements so that entrepreneurs can keep a lot of the benefits from building their business.

It is said that our productivity performance in recent years has been disappointing and that that is a puzzle. I do not quite understand why it is a puzzle; it is exactly what we would expect. We have had a major reduction in North sea oil output. The way the figures are calculated means that it is one of the most productive sectors, because labour productivity is based on the amount of revenue or value-added generated by an individual, and an individual in the oil industry produces a huge amount of revenue due to the windfall element in the oil price. We had a very big squeeze on many of the activities in the City that were apparently profitable before 2008. Those activities flattered the productivity figures, but some of the profits turned out not to be genuine, and a lot of them have been squeezed out. Again, a high-earning, apparently highly productive part of the economy has gone through a big change, and we have lost that.

We have been a successful economy—this is a strength—in creating lots of new jobs, but a lot of them are relatively low paid so they do not score very well under productivity scoring. If we compare our productivity with that for continental countries with unemployment rates two or three times as high as ours, their productivity is higher, because people we are employing on low pay here would be unemployed there, and the unemployed do not count in the productivity figures—they are just ignored as if they do not exist.

[Kevin Hollinrake]

My right hon. Friend is making some very good points, but is productivity not principally a regional problem? The gross value added per capita in London is about £50,000 a year. In the north-east, the north-west and Yorkshire, it is about £20,000 a year. Is that not where we have to level up, because that would drive productivity right across the UK?

[John Redwood]

I agree, and one of the things I hope will happen as we pursue policies that spread prosperity more widely is that some of the higher value-added activities that people come to London for will be carried out in other cities around the country. If somebody established a manufacturing business in a great northern city, it would be good if they had their media advice, public relations, legal advice, accountancy advice, consultancy advice and all the rest of it from firms in northern cities that specialised in those things, rather than the current model, where many of them come to London to take advantage of the excellent business and professional services available there.

In attracting more industry to the northern and western cities and towns, we need also to be conscious of encouraging the cluster of service businesses around them that can add value in other ways. In modern manufacturing, a lot of the traditional work is now done by machines and robots, so the individual plant does not attract a large number of jobs; the jobs are in all the other things—marketing, PR, services, legal, accountancy, invoicing and so forth—and we want to make sure that enough of those jobs come with the factory to the local area. That is where we have to see what other policies we need to put in place to spread such jobs more widely around the country.

The productivity puzzle is also caused by the public sector not innovating enough and not raising its productivity. It has been noticeable under Labour and Conservative Governments and the coalition that public sector productivity has stalled. That is disappointing, and we have a large public sector, so we need to get the Government to direct their attention to that, because the one bit of the productivity puzzle they can actually manage is the public sector, and Ministers have various powers to encourage and promote innovation.

I was interested to hear the Secretary of State for Health and Social Care talking last night about the role of innovation, new ideas and smaller businesses in the health service. There is huge scope for better partnership between innovative smaller and medium-sized companies and the public sector. The current contracting rules do not work well for many small businesses. It is difficult, because often the public sector wants a large solution for an awful lot of locations, and the small business can only handle so much and cannot scale up quickly enough. I hope that the Government will have another look at how the best of the private sector can be harnessed for the productivity increase we need from better innovation and better technology in big areas of the public services.

We must make sure that we see the technological revolution as a potential friend and not a potential threat. I was quite surprised this morning when reading the background papers for Davos—a meeting that I was not invited to and did not want to go to—to see how negative they were about technology. It was seen as a threat to be tamed and slowed down; as something that was going to destroy jobs and be very disruptive. It talked about the endless dislocations, whereas the public see much of technology as their friend. Why does America have huge success with trillion-dollar companies? Some of them are, and some of them seem to be trillion-dollar companies. Where have Facebook, Apple, Amazon and Netflix got their strength from? They have got it because they have public support. It is all very well for a politician to say, “They are wrong about this and wrong about that, and we need to regulate them and stop them doing this”, but it is a bottom-up revolution that we should not ignore. Those are things that people want. They have completely changed how people lead their lives.

People now go out to restaurants together and sit there with their iPods or smartphones not talking to each other. I am not sure that that is a great development for human relationships, but it shows that the technology has been transformative for people’s lives. They have much more instant information and much more ability to communicate to set out their views. It is not just what the BBC tells us; it is what we push back through social media these days, which some of us welcome. So we have a new model, and there is a danger that the Davos elite see it as a threat to their control over everybody. They are getting out of touch with what the public want. We should broadly welcome the technological revolution. I understand that a lot of our constituents like its services and products. We need to learn to live with it and co-operate with it in a sensible way.

As we come out of the EU, there are huge opportunities for us. Contrary to the misleading comments that some people have made, I have always taken the view that we can be better off as we leave the EU, not worse off. I have never understood why people are so negative about it all. I will simply end with a few obvious points about how we can be better off in certain areas. We can have a much bigger fishing industry. I hope it will be a prime task this year to create the conditions for that. We certainly do not want to keep on sacrificing our fish to over-exploitation by continental trawlers. We want to land more of our own fish while having a good conservation policy for stocks as a total, and that should then lead to onshore activities for fish processing and food manufacturers based on the excellent fish stock that we have available.

There are huge opportunities in farming. A lot of people would like to buy more local produce for all sorts of reasons. We like to support local farms. We are conscious of wanting to cut down food miles. We often like the flavours and benefits of locally produced food. We can do more of that, and there are ways in which, as we come out of the common agricultural policy, we could aim to get back to the levels of self-sufficiency in food that we enjoyed before our period in the common agricultural policy lowered it quite considerably.

We should also concentrate on our defence industries. We are making a commitment to spend more each year on defence so that we are more secure, but we are not truly secure unless we can make all the weapons and defence goods that we need in time of war. We must not be dependent on other people’s technology that we cannot access independently, or on imports over perilous sea lanes in times of conflict. We need to be able to scale up, and I urge all those involved in defence to see a big opportunity for us to make more of our own defence equipment. We should certainly make sure that we have control so that if the need ever arose, which I hope it does not, we would be able to scale up quickly without major issues.

I have gone on for rather a long time and I know that colleagues wish to debate these matters, so I will leave my other ideas for another time, but my conclusions are that we should not underestimate the damage that high tax rates do; that we should not underestimate the ability to generate more revenue, if we are brave on tax rates, by getting them down; and that we should pay particular attention to the big ticket items—homes and cars—that have been damaged by a variety of negative forces in recent years. I say a big thank you for the change in fiscal strategy. I hope that the Bank of England will join the party in wanting to promote growth as well, because that would make a considerable difference. It has been going in the wrong direction for some time, unfortunately. Let us make sure that all the obvious opportunities from Brexit, particularly in sectors that have been under strong EU control, are grasped warmly because they would give us some early wins.

[Mr Philip Hollobone (in the Chair)]

The debate will last until 11 o’clock, and I am obliged to call the Front-Bench speakers at no later than 10.27. The guideline limits are 10 minutes for the Scottish National party, 10 minutes for Her Majesty’s Opposition and 10 minutes for the Minister. Sir John Redwood has two or three minutes to sum up the debate at the end, but until 10.27 we are in Back-Bench time. Three Members wish to speak. I will not impose a limit, but the guideline is about seven minutes each so that everyone gets to speak.

10:05

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Member for Wokingham (John Redwood) on securing the debate. It is always good to speak in Westminster Hall and it is good to be back at the start of a new season, so to speak.

We have all heard and been a part of predictions about the growth of this country in a post-Brexit world, and we are quickly approaching the date at which things stop being theory and become a reality. Back in November ’17, the Government announced their investment for growth strategy. To be fair, Government strategy on the economy has been strong and positive and has brought results, as we must acknowledge, but the press release stated:

“With the aim of making the UK the world’s most innovative nation by 2030, the government has committed to investing a further £725 million over the next 3 years in the Industrial Strategy Challenge Fund (ISCF) to respond to some of the greatest global challenges and the opportunities faced by the UK”—

the United Kingdom of Great Britain and Northern Ireland. It goes on:

“This will include £170 million to transform our construction sector and help create affordable places to live and work that are safer, healthier and use less energy, and up to £210 million to improve early diagnosis of illnesses and develop precision medicine for patients across the UK.”

In my constituency the construction sector is important to providing jobs and some of the money needed to boost the economy. We are now two years into the Government’s strategy, which is an interesting stage to look at growth over the past two years and to acknowledge it. In the interests of fairness, I must say that there were always impediments to high levels of growth—they stemmed from indecision and the near collapse of faith in our ability in this House over the past two years. The previous Parliament must collectively acknowledge that the to-ing and fro-ing and almost toxic atmosphere in this place was not conducive to presenting to the world that we were in an ideal place to be invested in and worked with. The House has been a hot place over the past two years, unlike this Hall today, where it is almost Baltic, Mr Hollobone. We might have our meetings outside—it might be warmer. I believe it was warmer when I walked here this morning at seven o’clock.

Conservative policy has been positive. It has reduced unemployment and created jobs—definitely in Northern Ireland. I am very pleased to know that we are back in business in the Northern Ireland Assembly and that the Department of Enterprise, Trade and Industry will have that task again. Our levels of employment are similar to those in the south-east of England, which is very positive.

Such a long period of stagnation is unprecedented for the working poor, whose average real weekly earnings are no higher than they were before 2008 and 2009. We saw a large rise in food bank use as well, which has been very apparent in my constituency, where unemployment is much lower than it was when I first came to this House. But the policy has worked. In 2019 wage growth picked up and inflation came down. As a result, real average wages are growing at a healthier rate again, and we must welcome and encourage that.

However, when people do not have the money to spend locally, the local businesses know it and feel it. This is not for debate now, but there is pressure on the high street and in rural country towns such as Newtownards, which is central to my constituency, where we have seen shop vacancies come up that were not there three or four years ago. I have spoken to the Minister, who came over last year, and we have some ideas about how to go forward.

Where do we go from here? I know that the Minister will agree with the five foundations of economic growth, and will endorse, support and encourage them. The first is ideas—research, development and innovation, which are critical to a manufacturing strategy and a strategy for growth across the United Kingdom. Partnerships that enable the growth of research and development include the medical innovations of Queen’s University, with new drugs that can address diseases such as diabetes, cancer and strokes.

The second foundation is people—that is, skills and education. We cannot innovate without training people to a sufficient level of skill. The third is infrastructure. Not one week goes by in this House in which do we not ask a question about broadband, which is almost the key to all other potential jobs. In my constituency, small and medium-sized businesses and people who work from home need access to broadband. Infrastructure also includes energy and transport.

The fourth foundation is the business environment, and support for specific sectors and SMEs. The fifth foundation is places, and local industrial strategies. In Northern Ireland, councils now have more responsibility for creating some jobs, and we want to ensure that they can continue to do that.

As the old adage goes, we have to spend money to make money. We need to regard the new Parliament as a time to invest in our industries, and to show the world that the turmoil is over and that the time to invest is now. Northern Ireland is known globally as a capital of cyber-security, with many international firms basing their teams there due to our competitive rates, good connectivity and, importantly, staffing pool of highly trained young people and admin staff. That is down to a specific strategy and policy. We have marketed ourselves well in that industry.

We have so much more to offer, as does the United Kingdom of Great Britain and Northern Ireland as a whole. Although the foundations are ideas, people, infrastructure, business environment and places, we must ensure that our cornerstone is the absolute assurance that this country is on the rise once more. I always say that we are better together, with all four regions working as one. Confidence will come across to the world only when we have it in ourselves and in our abilities. That must start here and now with investment, and sizeable investment at that.

10:12

[Amanda Solloway (Derby North) (Con)]

I congratulate my right hon. Friend the Member for Wokingham (John Redwood) on introducing this important debate. May I add that it is absolutely freezing in here, and I am very cold?

One of the most important duties of any caring Government is to grow the economy. The question of how a Government should tend to and nurture the economy has been tackled by politicians of all stripes and colours, and answered in many ways, arguably to varying degrees of success. Fundamentally, people’s lives—whether they can support their families, get on the housing ladder, or enjoy some of the nicer things in life—rest largely on the Government’s safe stewardship of the economy. Governments have a responsibility to protect and promote the livelihoods of their citizens.

We should all be really proud of the Government’s record on growth. Since the crash of 2008-09, when the economy collapsed by 4.2%, the Government have managed to grow the economy every single year. That said, we cannot rest on our laurels. There is a lot more that we need to do. Libraries could be filled with writings on the north-south divide. In 2012, The Economist said, rightly or wrongly, that the divide was so broad that the north and the south were starting to resemble different countries. Growth continues to be stronger in the south. London recorded a 1.1% annual rise in output per person to £54,700 in 2018, increasing the per capita gap with the poorest region, the north-east, where growth was only 0.4% to £23,600 per head, according to data from the Office for National Statistics.

Less well documented, however, is the increasing gap between the east and the west. Across the midlands and the north, the growth of the west has been twice as fast as that of the east since the 2008 financial crisis. Do not get me wrong: London and the south, as well as cities such as Manchester, are assets to the country and we should be really proud of them. However, regardless of where we live in these isles, we should all share the fruits of economic growth.

To address the problem, we must not bring those places down, but bring areas such as the east midlands up with them. The Government are not blind to the problem: the midlands engine for growth, which we must ensure happens, and the northern powerhouse show that the Government are listening, and are determined to address the issue. The 2020s offer a unique opportunity to rethink how we can foster growth in our regions.

I could list a range of issues that we could talk about, including investing in transport, investing in our high streets, which I know we are doing, and supporting leadership in SMEs, which I am incredibly passionate about. However, I am conscious of time, and I know that my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) would like to speak, so I will limit myself to one topic: free ports.

As I am sure we all know, free ports are areas that are exempt from normal customs and procedural rules that are enforced by the Government. They aim to encourage businesses to locate and grow there, bringing growth, jobs and investment to local communities. I am glad that the Prime Minister will introduce free ports as we start our new relationships with trading partners across the globe. I would love one to be introduced in the east midlands, which already has the key ingredients to justify one: a wealth of manufacturing, the means to store goods, and the access to reach international markets easily, building on East Midlands airport’s cargo capability.

Proposals are being explored for a free port that might incorporate both East Midlands airport and the neighbouring East Midlands Gateway, plus the site of the Ratcliffe-on-Soar power station, just down the road from where I live, which will be decommissioned by 2025. A free port would position the east midlands as a viable and exciting proposition for businesses that need to import components for assembly before exporting assembled goods to overseas markets, while not being subject to excessive tariffs.

[John Redwood]

My hon. Friend might like to think about adding an enterprise zone to the free port. Obviously the free port allows people to import and export, but the enterprise zone allows people to sell to the domestic market as well.

[Amanda Solloway]

I thank my right hon. Friend. That is an excellent idea, which I will certainly look into.

Of course, as the MP for Derby North, I would call for an east midlands free port. However, I believe that they have the potential to unlock and boost all corners of our country, and will go far to reduce some of the current imbalances. It is important that regardless of where people live they are able to go as far as their abilities can take them. I believe that the Government’s free port plans will go a long way to achieving that.

10:17

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to speak in the debate; I congratulate my right hon. Friend the Member for Wokingham (John Redwood) on introducing it.

I will start with a modern-day parable from a book called “The 7 Habits of Highly Effective People”. A man is walking through a wood and comes across a lumberjack who is trying to saw down a tree and not getting very far. He walks up to the lumberjack, taps him on the shoulder and says, “Excuse me. Your saw is blunt. You’d be better off stopping and sharpening it.” The lumberjack says, “No, no—don’t bother me. I’m sawing down the tree.” He tries again: “Excuse me. Just sharpen your saw and you’ll cut that tree down much more quickly.” The lumberjack says, “I haven’t got time to sharpen the saw.”

That parable has stood me in good stead in my business. I draw the House’s attention to my entry in the Register of Members’ Financial Interests, as I am still in business today. The most expensive and the most vital resource of any business is the people who work in it. It is important always to ensure that they are not working with worn-out tools, and that they are effective and as productive as possible.

The key to the UK growth strategy has to be productivity. I do not disagree with my right hon. Friend: it is a simple issue to solve. However, it will require significant investment, both from the public sector and, crucially, from the private sector. Public sector investment alone will simply not do it.

The reality is that across the north and the midlands we have been working with worn-out tools for too long. According to Andy Haldane, the chief economist at the Bank of England, of the six factors that drive prosperity and productivity the No. 1 factor is connectivity. Large swathes of the country, particularly the north and the midlands, but virtually all regions outside London and the south-east, are very poorly connected. That is because we have underspent in those areas for too long. I know that our excellent Minister will say that the Government are now investing equal amounts in the north as in other parts of the country. That is true to some extent, in terms of central investment. However, other regions, particularly London and the south-east, are very good at aggregating different forms of investment, including private sector and local authority spending. If we add all that up, for every £1 that is spent on infrastructure per capita in the north, about £3 is spent in London and the south-east. That is why those regions are phenomenally productive and therefore phenomenally prosperous. When I talk about more public sector investment, it is not about a grievance that we in the north or the midlands have not had our fair share; it is about sound economics.

I will quote a few leading economists, beginning with Lord O’Neill, a former cities Minister who was also the chief economist at Goldman Sachs at one point. He was an ardent remainer, but said that being in or out of the EU was

“not the most important thing”;

the most important thing was

“our productivity performance and our geographic inequality”.

Andy Haldane highlighted in a recent speech exactly the same figures as my hon. Friend the Member for Derby North (Amanda Solloway): the gap in average incomes between the richest and poorest regions is now larger than it has been at any time since the early 20th century. Amazingly, as my hon. Friend said, the prosperity gap in average incomes between the richest and poorest regions is about 2.5 times, and that figure is almost identical to the gross value added per person, which is the productivity measure. If we drive productivity, we drive prosperity around the country. That would not only help UK plc’s tax receipts, which pay for all our public services, but would level up throughout the UK. I love the phrase “level up”; it is what we should have been doing for decades. The fact that we have not been investing right across the country is not a failure of this Government, but a failure of Governments of all persuasions over decades.

However, the economist David Smith recently made a very interesting point in The Sunday Times regarding the Government’s grand plans to invest more across the country. In his words,

“public investment works only when it operates in harmony with private investment.”

That mirrors an article written by Mark Littlewood of the Institute of Economic Affairs. Members will be aware of some of his articles; he is not really a big spender, and when he was discussing the Government’s planned investment in infrastructure around the UK, he was quite scathing. He asked why, if this is such a wonderful idea and it is going to produce such a good return, MPs do not invest their pensions in it. One of the examples he gives of why this might not be the right thing to do, which I disagree with, is Doncaster. He writes that Doncaster is one of the best connected towns in the country, yet it is not very prosperous, so connectivity alone will not do the job. Public sector investment alone will not do the job.

However, I totally support what I think the Government are planning, which is to invest about £100 billion to £120 billion in the economy over the next few decades. I very much hope that they will support Transport for the North’s £120 billion 30-year plan to deliver projects such as Northern Powerhouse Rail, all the way from the east coast to the west coast, as well as lots of smaller projects such as the dualling of the A64 in my constituency, which are equally vital.

We need to incentivise private sector investment; this cannot just be about taxpayers’ money. If we look at what was done in eastern Germany during the reunification of that country, a huge amount of public sector money was put into East Germany, but the German Government also created incentives for businesses to relocate or start up in eastern Germany. It was a very simple measure, but over time, it was phenomenally successful. I absolutely agree with my hon. Friend the Member for Derby North about free ports and enterprise zones, and tax incentives for businesses to move to those regions.

My right hon. Friend the Member for Wokingham said rightly that the number of businesses set up per capita in London is way higher than in the north. I would like to see a SME revolution across the north; many more small businesses need to be set up, and the No. 1 factor in businesses setting up is access to finance. A troubling story in The Times today stated that the reduction in lending to SMEs in the north is five times greater than in London. That trend is going the wrong way at the moment, and we need to make sure that SMEs right across the country have access to finance.

As many hon. Members know, I am very concerned about the concentration of business lending among four big banks in the UK. That is completely the opposite of what has happened in places such as Germany, where there are 1,500 mutual banks across the SME sector. We should certainly consider encouraging regional mutual banks, in order to make sure that SMEs have access to capital, and should also consider whether public sector procurement should favour more local SMEs. Preston City Council has done an excellent exercise, spending more money with SMEs and less with some larger companies, because that council knows that SMEs spend much more of their money in the local community. It is a virtuous circle.

We should also decentralise agencies’ jobs and spread some of those public sector jobs around the country. I do not know whether the House of Lords will come to York—I think probably not—but decentralising jobs away from our wonderful capital and right across the country has to be the right thing to do. Finally, we should devolve powers and money so that we can get excellent local mayors, such as Ben Houchen in the Tees Valley. We want more people like him, including a York city region mayor and a Leeds city region mayor, so that we can devolve powers and money back to people who really understand the local communities and are willing to undertake a revolution in how we structure our economy, making sure that we get not only more public sector investment, but more private sector investment.

10:26

[Peter Grant (Glenrothes) (SNP)]

I am pleased to begin the summing up in this debate, Mr Hollobone. I do not think my voice will last longer than 10 minutes, so there should be no concerns on that account.

I congratulate the right hon. Member for Wokingham (John Redwood) on having secured this debate, and the three Members who have already spoken—the hon. Members for Strangford (Jim Shannon), for Derby North (Amanda Solloway), and for Thirsk and Malton (Kevin Hollinrake). Maybe unsurprisingly, given the constituencies those Members represent, a lot of the focus in this debate has been on the serious imbalance in the economy of the United Kingdom, and indeed the economy of England, between London and the rest. I am interested to hear what the Minister has to say about finally addressing that issue, because if we look at England in isolation—I am sorry to say that isolation is where England is headed right now—the disconnect between the biggest city and the tens of millions who live in other parts of the country is quite stark. It is something that we do not see in successful economies across the rest of Europe, and it will hold back the wider economic potential of this nation.

I particularly congratulate the hon. Member for Derby North on her return to the House of Commons. I always thought ping-pong was what happened between the House of Lords and the House of Commons, but apparently Derby North has a game of ping-pong between the Conservative party and the Labour party. I do not know how long she will be able to stay this time, but I know that she will relish the challenge of staying a bit longer. I cannot, in all honesty, say that I wish her well in that, but I hope she will not take that too personally.

Interestingly, although we have heard a lot of ideas about how to improve economic growth, we have not stopped to think about what economic growth is, what it is for, and particularly who it is for. One of the reasons why I do not get too obsessed with fractions of a percentage up or down in economic growth is that it can mean a lot of different things depending on how we measure it, and it is quite possible to look as if we have strong economic growth when an awful lot of people are being left behind. Some 20 million or 30 million people in the United States of America live in poverty, so looking at the apparent success of the American economy tells us that growth in itself is not enough. If people get left behind—if we do not have inclusive growth—then our economic growth is not really delivering.

I am very pleased that, with the limited powers they have just now, the Scottish Government have prioritised inclusive growth in a lot of ways that do not immediately look as if they are about economic growth. An example is their success in getting more young people from deprived areas into university. Some 16.5% of first-time entrants into universities in Scotland come from the 20% most-deprived areas, which means that we are close to a position where young people growing up in those areas have just as much chance of going to a top-class university as people from other parts of Scotland. That is massive, especially as education is one of the best ways to improve a person’s life chances.

More importantly, even though university might not be the best thing for a lot of young people, they are the first people in their families to believe that university is for them. The attitude, “A university education isn’t for the likes of me because I’m from the wrong background”, is beginning to be dismantled. It is impossible to estimate the difference that that could make through time.

The First Minister has also supported improving the educational achievement, and therefore the life chances, of young people who have been in the care of local authorities at some point or who have come from families with severe problems. When I was a council leader, I looked at the stark difference in the educational attainment of those young people compared with others of a similar age. Their life chances were being affected almost before their lives had started.

Nicola Sturgeon’s commitment means that those young people now believe that they have every bit as much right to get into university, get a good job, start their own business and prosper in the world as anybody else. That is a major contributor to economic growth. Even if it does not add any percentage points to GDP growth, surely it is right to make sure that if we live in a prosperous society, and we want to call that society civilised, we measure its success not by how many millionaires there are but by how well the people at the lower end of the income scale are faring. There is a marked divergence in that area between the priorities of the Government in this Parliament and those of my Government in my national Parliament in Scotland.

I mentioned a number of features of inclusive economic growth in my contribution to the Queen’s Speech debate last night, which I will not repeat. In particular, I spoke about the marked contrast between the Scottish Government’s investment into my part of Fife to regenerate the local economy, and the UK Government’s lack of attention. For as long as we remain part of the United Kingdom, I will continue to call on the UK Government to step up to the plate and honour their responsibility in that regard.

We talk a lot about the exceptional economic strength of London and the south-east of England, although, as I have said, the imbalance between that and the other English regions will become a major problem, if it is not already. In terms of fundamental economic performance, however, if Scotland were a region of England, it would be the second or third best performing region of England on every economic indicator. Whether in the growth of inward investment, the growth of our exports or the growth of our economy generally, Scotland has a fundamentally strong economy. There is absolutely no doubt about that.

The single biggest threat to our economy is Brexit. Every analysis shows that, after Brexit, our economy will grow less than if we had stayed in the European Union. The Government’s response to the fact that all their analyses showed that Brexit was an economically bad idea was not to stop Brexit but to stop publishing the results of the economic analyses, because they were too embarrassing.

Today’s debate has been very interesting, but the definition of economic success that I have heard, and the direction that the proposals from down here for economic success would take people in, are not what people from my country want to take, so that will result in a significant divergence. I say to hon. Members who represent constituencies in what they call the north of England—although I am not sure Derby and Yorkshire are particularly far north—that one of the best things that could happen for the economy there would be to have our very own northern powerhouse in Scotland. I can see that coming in the not-too-distant future.

10:34

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

It has been a pleasure to listen to this interesting debate. I was encouraged by some of the comments of the right hon. Member for Wokingham (John Redwood), whose position is perhaps more similar to that of the Labour party than he might be delighted to hear, but I disagreed with his conclusions in some areas.

When preparing for the debate, I anticipated that the right hon. Member’s take would follow his comments before Christmas, when he welcomed what he described as the “turning around” of the mood in relation to the economy by the Prime Minister, which will

“take some cash…and now is the time to spend a bit of that…That will show that the country has made wise decisions up to this point, and that Brexit will not be damaging to our economy”.—[Official Report, 19 December 2019; Vol. 669, c. 65.]

Of course, that is a bit of a change from some of the advice that we have heard he gave to investors not to continue to invest in the UK.

[John Redwood]

I wish that those completely untrue statements were not constantly repeated. I have never said anything negative about our prospects because of Brexit—never, never. I have always been positive about Brexit.

[Anneliese Dodds]

I am sure that anybody listening to the debate will be delighted to look back at the article in the Financial Times. I hope that they will agree with the right hon. Gentlemen’s statement; some commentators have disagreed.

[John Redwood]

It does not mention Brexit. Brexit is not in the article.

[Anneliese Dodds]

I believe it was about the factors of uncertainty, which is a point that I will come back to, because they very much bear on the debate.

I welcome, however, the recognition that it is necessary to return some public spending to its previous levels. It is not correct to state that public spending was maintained in real terms. When we compare it with the size of the economy, there was an increase, but that is because our economy was not recovering at the rate that we would have expected, particularly in relation to other similar-sized economies—another point that I will come back to. Surely, however, we should not view public spending only in relation to economic growth, or as a way to promote economic growth, although that is an interesting move towards a Keynesian approach, which I cheekily welcome.

The choke-off in spending in many areas has had a number of unintended consequences that have been economically damaging and financially expensive. Paul Johnson from the Institute for Fiscal Studies has described the cuts in the number of police officers as

“Boom, bust, boom…Not a terribly efficient way to manage things”.

It is obvious that it is pretty expensive to take more police officers on to the books again after a number of them have been relieved of their duties.

Similarly, in many other areas, austerity has led to a significant increase in the demand and need for other forms of public services. The cuts to Sure Start and other early intervention and support services have been linked to the steady rise in the number of looked-after children. It is incredibly expensive to look after those children, as well as the fact that that has a terrible impact on their future lives in many cases. The lack of access to primary and other forms of healthcare has been linked to an increased demand for A&E services. The lack of action on air pollution has been linked to increased demand for asthma-related healthcare. Austerity has been self-defeating on its own terms. It is good that we have seen the light now, but it is rather late.

We also need to acknowledge that the Government have removed themselves from some areas of activity. A case has been taken up by criminal justice campaigners, who state that in the UK, rape has “effectively been decriminalised” because only 1.4% of reports of rape are prosecuted in the UK. That has been linked to a lack of resources; it has been stated that the state has a different scope in our country since austerity.

Arguably, all those cuts to public spending have had a significant impact on growth. I enjoyed the comments of the hon. Member for Derby North (Amanda Solloway) about growth. She is right that the economy has been growing every year, but surely that is a rather low bar. Traditionally, since the 1950s, the UK economy has grown on average by about 2.45% a year, but we have been well below that in recent years. If we look across the time from 2008, we have had the slowest recovery from an economic depression since the 1930s. Very recently, we have had more rapid growth than some of those comparable economies, but across the time, particularly in the first few years after the financial crisis when there was that change in Government, we had slower growth than the trend in comparable nations.

[Kevin Hollinrake]

The hon. Lady makes a fair point, but she must understand the starting position. The great financial crash was much more severe in the UK in relative terms than in any other developed country.

[Anneliese Dodds]

It was more severe, for reasons that I will come back to later that relate to some of the hon. Member’s work on the balance of investment in our economy and the impact that the slowdown had particularly on our property industry, which is such a significant part of our economy and which led to that particularly severe impact. We should not forget about that.

The very slow recovery has also been in evidence when it comes to living standards. Real wages are still not, on average, at the levels they were back in 2008. That is another significant difference between the UK and many comparable nations and one that we should not forget.

I welcome some of the discussion that we have had on productivity, which underlies some of the brakes on the growth rates that we would have liked to have seen in recent years. On the drivers of our productivity issues, other nations that are highly dependent on oil revenue, for example, have not necessarily seen the same kind of slowdown in productivity growth. Norway, for example, has much lower working hours than the UK and some people have linked issues of work-life balance to productivity as well—but that is just an aside.

It is critical that we look at the points about skills that the hon. Members for Strangford (Jim Shannon) and for Glenrothes (Peter Grant) rightly made. We have seen significant change to further education in recent years; major cuts have been made to colleges and sixth forms. I welcome the fact that the Government seem to be changing tack in that regard; it is absolutely critical that they do so, because when I talk to firms, the biggest issue they tend to mention is the lack of a skilled workforce, so we really need to focus on that.

We also need to talk about investment, as the hon. Member for Thirsk and Malton (Kevin Hollinrake) rightly mentioned—both public and private investment. We have seen some negative developments in that regard, particularly in areas that are critical to future growth. Clean energy investments have plummeted since 2015. In 2018, annual clean energy investment was at its lowest level since 2008. There are a range of factors, but I would include the regulatory uncertainty in the sector. We have seen some big changes over time, and we need certainty.

We need to have an appropriate environment for small businesses and to encourage entrepreneurship; I agree with some of what the right hon. Member for Wokingham said about threshold effects. We need to learn from other countries. It is possible to calibrate the tax system far more closely to profits and to not have big cut-offs, such as those we have, for example, in relation to VAT. I would encourage Her Majesty’s Revenue and Customs to look at that as the tax collection authority—if it has the resource to do so, which is a significant issue.

On IR35, the elephant in the room is that our unemployment regulations are not calibrated with tax regulations; definitions are not the same in the two systems. I have not seen the kind of grasp of that issue that I had hoped for from the Government. IR35 and other measures are trying to plaster over some of the issues caused by the lack of consistency in definitions, but we need a longer term approach from Government.

The right hon. Member for Wokingham spoke in some detail about tax cuts. On corporation tax, some of the changes we have seen in the US have resulted from funds being moved out of tax havens—let us call a spade a spade here—but they have also resulted from much more aggressive pursuance of corporation tax equivalents by the US authorities. When it comes to the UK case—this seems to be a debate that we have just about every day in this House; I suspect that it is getting slightly boring for people reading Hansard—the evidence indicates, and commentators have said time and again, that the reduced rate of corporation tax has not led to increased growth in investment in the UK and that it has coincided with a reduction in the growth of investment and, above all, with a significant reduction in revenue, which has a knock-on impact on the possibility of boosting skills and so forth, and other drivers of productivity.

I think the UK population is very aware of that situation. The recent British Social Attitudes survey indicated that 60% of people want to see taxes boosted, if that could lead to more sustainable public finances and spending. Only 4% of people want to see them fall.

On the issue of free ports, which was mentioned by the hon. Member for Derby North, we need to tread with care and look at the research and the international evidence, much of which indicates that those kinds of structures can be very good at moving economic activity around but they are not always as good at promoting new economic activity—it tends to be the factor endowment in different areas that will promote development sustainably, the level of skills in the workforce and the level of investment in plant and so on. I very much enjoyed the hon. Member’s speech, particularly her focus on regional disparities; the hon. Member for Thirsk and Malton also concentrated on that. We need to go much further. It is a shame that we have not seen a commitment from the Government to shift economic activity that is under their control to other areas. Labour said during the election that we would like to see part of the Bank of England being moved up to Birmingham. I hope that we might see some more bold measures coming from the UK Government in that regard.

In relation to the claims that tax cuts will necessarily promote investment in economic activity, when it comes to the drivers of entrepreneurship among less well-off people, it is actually regulatory measures that can really make the difference—for example, minimum wages and rights at work.

Finally, on the comments by the right hon. Member for Wokingham about the drivers of risks in the world economy and the activities of the Bank, I was surprised that he did not make any mention of the impact of tariffs and so on in China and the US on the automotive industry. Most commentators would say that they played a significant part, and they would also talk about the fact that the wiggle room for policy activity by the Bank is of course reduced by the very low interest rates that we have. That is a significant issue for the UK, where we have that rather unbalanced situation with so much economic activity tied up in property.

10:47

[The Financial Secretary to the Treasury (Jesse Norman)]

It is a delight to be able to speak for the Government in this first Westminster Hall debate of the new decade, as well as of the new parliamentary term. I congratulate my right hon. Friend the Member for Wokingham (John Redwood) for initiating this debate and for his very wide-ranging and thoughtful speech. I am sure he will be as pleased as I am and as I know Members across the House will be that today’s economic news reinforces a picture of an economy that is growing. The International Monetary Fund predicts that the UK is about to grow faster over the next few years than its major rivals in the eurozone and many of the G7—Germany, France, Italy and also Japan. PwC’s chief executive survey now rates UK attractiveness highly once again—I think we are the fourth most attractive global destination for location for businesses. That is very far from the narrative of isolation that we are hearing from the SNP and indicates the continuing international connectivity and scope for investment in our economy.

As my hon. Friend the Member for Derby North (Amanda Solloway) pointed out—I rejoice to see her back in this House—we are in the extraordinary position of having had 10 years of continuous annual economic growth. That is a remarkable achievement, and I am sure she will be as pleased as I am to see that the latest information is that the jobs market is strengthening, even from its already very strong current position. That economic growth is an amazing fact. If someone had said in the lee of the 2008 financial crisis that, beginning with the Conservative Government of 2010, there would be a full decade of uninterrupted annual economic growth, I do not think there is a person in this country, let alone this Chamber, who would not have bitten their arm off. That is something that we should all delight in, but that we should acknowledge has limitations that we need to try to overcome.

One of the things that was most interesting about my right hon. Friend’s speech was the way in which he highlighted the change in economic policy. He focused on the fiscal change and on the transition from the Budget restraint of the last two Governments to the more expansionary fiscal policy that this Government have indicated in the spending round and that we may see in the Budget. I would suggest there is something slightly deeper going on. There is a change in the Government’s conception of economic policy. We are not thinking of economic policy in what might be called a more purely general equilibrium way, by which investment flows automatically to investable propositions and finds returns. We are determined as a Government to build more energy into that and to adopt a focus that is more specifically targeted on regional needs and identities, and it is that sense of economic policy that marks a distinct intellectual step forward. If anyone is interested, I tried to explain this in a piece in the Financial Times yesterday that highlights this transition.

I will say a bit about the interesting speeches that were made by my right hon. Friend and other Members. He is right to say that lower taxes can be part of a fiscally expansionary policy. He possibly ignores some of the differences between ourselves and the USA. Obviously, the US had a massive fiscal boost, which is something it could do partly because of the dollar’s extreme strength as the global reserve currency. Of course, that was accompanied by a significant—in this country, it would be politically contentious—deregulation in energy. There are important differences between the US economy and our own.

My right hon. Friend mentioned the constraints under which the motor industry operates, but he did not mention dieselgate, which was an absolutely disastrous blow to the credibility of the global diesel manufacturers. Nor did he mention the fact that current diesels are still very heavy emitters—even Euro 6, compared with current environmental standards. The Government have frozen fuel duty and grown VED only in real terms. It is about trying to strike a balance between a shift towards a greener economy, particularly a green transport economy—at a time when we have not quite got to the point in the S-curve where the supply of electric vehicles is coming through at enough scale to warrant people using them—while moderating and mitigating the impact on households.

My right hon. Friend and the hon. Member for Oxford East (Anneliese Dodds) touched on what he described as the top-down imposition of IR35 rules. As he knows, IR35 rules have not changed. All that has changed is the way IR35 is being assessed, and we have called for a review in order to ensure that its implementation can be as smooth as possible. He touched on the issue of public sector productivity—again, rightly—and there might well be scope for using things such as telemedicine to improve the productivity of the public sector, but an intrinsic difficulty is one of the economic laws that we bump up against: Baumol’s cost disease. The cost of services relative to manufacturing continues to escalate, and it is not possible in the public sector to have industrial-type improvements in productivity. We do not want teachers to have too many pupils in the class, and we do not want nurses to have too many people to examine and support, so productivity is intrinsically more limited. The Government must therefore be cleverer about how we use technology, which is the purpose of the new GovTech fund that we have announced.

I will pick up on some of the other themes of the debate before turning to another point. I agree with the comments made by the hon. Member for East Londonderry (Mr Campbell) about the importance of spreading wage growth across the UK, which was a point also made by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) in his very thoughtful speech. I also share the view of the hon. Member for Glenrothes (Peter Grant) that it is a mistake to see property as a speculative asset, and there is no doubt that the crash of 2008 was caused by a massive over-leveraging in the banking sector. As he will recall—Labour does not like it when I point this out—UK bank borrowing across the sector as a whole was 20 times equity for 40 years, encompassing 1960, 1970, 1980 and 1990. In 2000 it started to go up, and by 2017 it was 50 times equity. That was what fuelled the enormous speculative boom.

[Peter Grant]

Will the Minister give way?

[Jesse Norman]

I will not, because I am very short of time.

I share the concern expressed by the hon. Member for Strangford (Jim Shannon) about the toxic atmosphere in SW1.

I will mention another issue that is more specific and personal to me, and I hope colleagues will indulge me. In my constituency in Herefordshire, we have been trying to create a new model of higher education through what we call a new model institute in technology and engineering. It has attracted a great deal of attention across Government because it creates the possibility of significant regional economic growth that is closely tied to the creation of university campuses in cathedral cities such as Canterbury, York and Lincoln. I flag it now because, from a national perspective, it represents a portable model by which higher education of the most value-added kind, and that therefore has benefits for entrepreneurship and business formation, can be moved to all parts of the country, having been tested and developed in Herefordshire. One would think that this was something that Government at all levels would support. Her Majesty’s Government, in the form of the Department for Education, the Department for Business, Energy and Industrial Strategy, and the Ministry for Housing, Communities and Local Government, have been extremely supportive of it.

One might also think that the local enterprise partnership, the Marches LEP, would support it. I am sorry to tell colleagues that the Marches LEP—I say this having had at least a year of wrestling with it on this topic—has been absolutely diabolical in the way it has treated this very innovative project. It has received £23 million from Government and all the support one could imagine. It has received private sector investment, and investment from matched funds. The LEP, which by charter is supposed to support economic growth in the Marches, has done nothing but prevaricate and delay. Even now, it is seeking to impose a £5 million indemnity on Government investment, although the Government made it clear in letters from the Secretary of State and from senior civil servants as early as January 2019 that no such indemnity was required. The specific people involved—the then chairman of the LEP, Graham Wynn, and the chief executive, Gill Hamer—should be subjected to significant criticism in the House. I put it on record that this important opportunity for a portable model of regional growth in higher education, which was developed through a pioneering model of tech and engineering at university and which offers possibilities and creativity, has been ignored and is being actively undermined.

Having said that, let me congratulate my right hon. Friend the Member for Wokingham again on introducing this very wide-ranging and important debate, which has examined not merely specific policy change but the very basis of economics itself. I thank him for securing the debate.

10:57

[John Redwood]

It is a great pity that Labour Members have yet again chosen to completely misrepresent my article in the Financial Times. Had they read the article, they would have seen that it did not mention the word “Brexit”, because it was not about Brexit. At the time I was writing that article, as today, I said consistently that Brexit offers lots of opportunities that can make us better off, if my right hon. Friends in the Government do the right things, as I hope they will.

One thing they could do is take VAT off green products. We have taken green policy to extremes today by turning all the heating off in the building, and I wish they had warned us that we needed to bring our grey coats in order to be true greens. There are many green things we can do. Taking VAT off products such as draft insulation, boiler controls, wind farm parts and so forth would be a good idea, and we can do that as we leave the EU. I recommend that strongly to the Minister.

I recommend to my hon. Friend the Member for Derby North (Amanda Solloway) that an enterprise zone allied to a freeport would give it extra impetus, because there would be an easing of tax rules, business rates, planning regulations and so forth, which would stimulate far more enterprise at the same time as encouraging the import-export trade, free of having to pay the tariffs on those things that are re-exported.

The debate on productivity has been useful. I agree with the Minister that we do not want fewer doctors or teachers in relation to the number of patients or pupils. I am very pleased that the Government are recruiting extra, but there are many things that can be done by applying great modern technology to the public sector, particularly to all the administrative functions. We need to promote people into more rewarding jobs and give them much more computer power to do the things they have been doing. That is the way to get a higher-wage economy and to have more enriching and more worthwhile jobs. We want computers to take more of the strain throughout the public sector, as they are doing in many parts of the private sector. We need to make sure that we get an investment drive.

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

High Speed 1: Rolling Stock

Tuesday 21st January 2020 Westminster Hall

11:00

[Damian Green (Ashford) (Con)]

I beg to move,

That this House has considered rolling stock on High Speed One.

It is always a great pleasure to serve under your chairmanship, Mr Hollobone. I am pleased to see the Minister in his place. He may feel at times in his life that he spends a disproportionate amount of time dealing with the affairs of Kent, but we are always grateful for his attention. I am happy to assure him, at the start of this short debate, that this is a different kind of rail debate from those he is used to. I imagine—indeed, I know—that most debates in this Chamber about rail services are a cry of rage about unreliability, delays, strikes, and how colleagues’ constituents are at the end of their tether. By contrast, this debate is about a hugely successful service, but one that will be choked by that very success and popularity unless Ministers and the industry take decisive action very soon.

Let me start with the good news. These are facts from Southeastern, which operates the line. Since High Speed 1 started under Southeastern in 2009, it has carried more than 100 million passengers. The passenger satisfaction over that period has been higher than 90%, which, as the Minister will be painfully aware, is an extremely good figure compared with some other lines. It has been calculated that it has delivered a £1 billion boost to the Kent tourism economy, and that it indirectly supports up to 72,000 jobs. Clearly, one of the main reasons for that is the speed. It is a high-speed operation, and the journey from my constituency, Ashford, to London is now 38 minutes. It used to be routinely 81 minutes, so that is significant. Other colleagues from Kent in the Chamber will no doubt have similar stories.

The line also has a hugely positive environmental effect. It has been calculated that some 6,000 cars a year are taken off the road because of the high use of the service. If I may be parochial for a second, it has contributed hugely to economic growth. In Ashford, seven major development projects—offices, leisure, shopping and education facilities—either have been built or are being built around the station. There is a direct business benefit to that: because it is only 38 minutes, using the high-speed train, from Ashford to St Pancras International, whereas office rents are 73% lower than in London, many businesses clearly find Ashford an extremely attractive place to do business. Of course, I welcome all that.

My last bit of positivity, if I can keep the Minister cheerful for a few more minutes, is about a study of what has become an increasingly key industry for the whole of Kent—tourism. HS1 Ltd did a tourism impact study a couple of years ago, and the figures are stark and very encouraging. The value of tourism and the visitor economy to Kent grew by more than £1 billion over the past decade, from £2.4 billion to £3.6 billion, supporting the 72,000 jobs I mentioned. To put that in perspective, that is 10% of all the jobs in Kent. It is a really significant industry.

Sustained investment in not just the tourism industry but transport links, of which High Speed 1 is one of the most important, has led to that significant increase. The study determined the perceived impact that HS1 has had on the sector. More than half the respondents in the tourism industry in Kent believe that HS1 has had a positive impact on their business. The most obvious reason for that is the speed to reach the destination. Perhaps more subtly, there is also the ability to attract visitors from further afield—it increases Kent’s range of attraction.

[Gareth Johnson (Dartford) (Con)]

I congratulate my right hon. Friend on securing this debate. There is no doubt in my mind that HS1 has been good for the county, but does he agree that, before proceeding further with HS2, we need to tackle the challenges of HS1, which has, in many respects, become synonymous with costs and overcrowding?

[Damian Green]

I am about to come to the issue of overcrowding, as my hon. Friend would expect, as that was my principal reason for securing this debate. He says “before proceeding further with HS2”, but I should say that I am in favour of HS2, partly because I have observed the benefits of HS1 on Kent, and I would not want to deprive other parts of the country of the benefits that high-speed rail services can bring. To some extent, the two debates need to be separated. HS1 has been hugely good for Kent, and I wish that to continue, so I therefore urge the Government to address what will be a looming and imminent problem if they do not. The HS2 debate is rather a different one.

Some 71% of respondents in the tourism industry believe that leisure tourism in Kent has increased as a result of HS1. It has been a particular influencing factor in attracting couples and family groups—young families, those with older children and extended families—and that has contributed to a widening and deepening of the Kent tourism economy. I emphasise tourism because, although HS1 is by and large regarded, reasonably enough, as a commuter network—it clearly is of huge benefit to commuters, because it gives them many hours, days and weeks of their lives back through reduced journey times—it actually has a measurable and direct economic impact beyond that.

Overall, HS1 is one of the success stories of the rail network. It provides travel that is not only fast but more reliable than most lines, as reflected in passenger satisfaction surveys. But that, as I reach the halfway point, is the limit of the positive news that I wish to bring the Minister. Now for the bad news.

The bad news is that the service has become too popular for its own good. Overcrowding is a serious and growing problem throughout the line. The operator, Southeastern, has tried to compensate by changing the number of carriages on the most popular peak-hour services and improving the repairs and maintenance programme so that more of the rolling stock is available at any one time, but that is not enough. Essentially, we need more rolling stock on the line. Passenger numbers have grown by an average of 11.7% every year since 2010, and there is no evidence that that increase in demand will slow down in the future. Indeed, given that major housing developments are planned in not just Ashford but other towns in Kent along the line, we can expect the opposite.

[Tracey Crouch (Chatham and Aylesford) (Con)]

I, too, congratulate my right hon. Friend on securing this important debate. Although I agree with everything he says about the benefits of HS1 to Kent from an economic perspective, constituents from Snodland and Chatham who pay £5,500 for their annual ticket to use HS1 should at least expect a seat and working toilet on their train into London. Does he agree that, given the growth in house building across the area, communities such as Snodland are being built specifically around the services from HS1?

[Damian Green]

My hon. Friend is exactly right and she makes a good point about season ticket prices. Obviously, season tickets are slightly more expensive for my constituents and, the further towards the coast, the more expensive they get. As the inability to sit down spreads along the line, the difficulties she rightly pointed out will no doubt get worse for people. The need for extra train services and longer trains is clear.

[Adam Holloway (Gravesham) (Con)]

I entirely agree with my right hon. Friend. The service goes through Gravesend. Why on earth are the people who pay most for their tickets standing up for 23 minutes from Gravesend, or indeed for 38 minutes from Ashford? That is completely wrong, and something needs to be done about it.

[Damian Green]

My hon. Friend makes a good point.

On current projections, 31 high-speed services a day will be full to capacity by 2025, meaning that those passengers who have paid for expensive season tickets and rightly complain about having to stand every day might not even be able to get on the train. Things as they stand will get worse rather than better and, on top of the 31 inaccessible services, another 25 trains a day will be standing room only. The scale of the problem is becoming clear.

In preparing for this debate, I spoke to the rail industry. Hitachi made the interesting point that the trains on the HS1 line are specifically designed for it and for the Southeastern conventional network. The trains use two different power sources and have three different signalling systems on board, so standard UK network trains cannot be used. How to extend or replace the rolling stock on this particular line is a special issue. Hitachi itself advises planning for a lead time in the order of four years before new train sets could come into service on the line—consider the design time, procurement, testing and approvals for a specialist product. For that timescale to be achieved, clarity on the future of the franchise at the earliest opportunity is vital.

The Minister is of course aware of the history of the franchise, its difficulties and the succession of relatively short-term solutions brought into being to keep the franchise operating. I appreciate the problems that he, the operator and the industry more widely have faced with the franchise—this debate is not the time to discuss those—but I plead for some long-term thinking to be introduced now, instead of our continuing simply to apply short-term patches to franchising or to whatever succeeds it after the review is published. Now is the time, on this specific issue, to impose some long-term thinking and to say, “We need to start planning now”, if we are to avoid something that would be tragic for the rail industry, turning a success into a failure in the future.

[Sir Roger Gale (North Thanet) (Con)]

My right hon. Friend mentioned tourism in his opening remarks. He knows, because I have bored for England on the subject, that I am looking forward to the reopening of Manston as an airport, with the synergy between Manston, Ramsgate and the port of Dover, which is a highly successful cruise-liner port. If we are to attract tourism, it is vital that we have reliable train services with a swift connection to London. In terms of connectivity, does he agree that we must urge the Minister to recognise that we need those trains now and not in 10 years’ time?

[Damian Green]

I completely agree with my right hon. Friend in all but one particular: he never bores for Britain on any subject, so I disagree with him about that, but completely agree with him otherwise.

To conclude, this morning I have two requests of the Minister: first, to acknowledge not just that this is a problem but that it is one that needs to be addressed now—it cannot be kicked into the long grass any longer—and, secondly, to commit to devising a solution that will allow passengers to continue to enjoy the many benefits of high-speed rail. We need decisions very soon to prevent one of the great successes of the rail industry over the past 10 or 20 years from being tarnished by short-term decision making. I would urge the Minister to make those commitments this morning, and I am grateful to colleagues who contributed to the debate.

11:15

[The Minister of State, Department for Transport (Chris Heaton-Harris)]

It is a pleasure, as always, Mr Hollobone, to serve under the chairmanship of my near neighbour. I hope that you will look kindly on me if I make any errors and inform me later, rather than during the debate.

It is also a pleasure to respond to my right hon. Friend the Member for Ashford (Damian Green). I congratulate him on securing this debate on rolling stock on High Speed 1, and all Members who have contributed by intervening this morning: my hon. Friends the Members for Dartford (Gareth Johnson), for Chatham and Aylesford (Tracey Crouch) and for Gravesham (Adam Holloway), and my right hon. Friend the Member for North Thanet (Sir Roger Gale).

My right hon. Friend the Member for Ashford was right to say that in my time as a Minister I have been interested in the affairs of Kent—or, depending which side of the Medway we are on, Kentish affairs. I appreciate how he has phrased his words today, his tone, and how he has gone about the debate. It was kind of him to do that.

The Southeastern high-speed franchise has cut journey times dramatically for passengers travelling into London from all destinations in Kent. For example, Ashford to London has seen a reduction of 43 minutes, from the bad old days of 81 minutes to a regular journey time of 38 minutes. Over the past decade, more than 100 million passenger journeys have been made on Southeastern’s high-speed service. As my right hon. Friend highlighted, the popularity of Southeastern’s high-speed service has led to significant growth in passenger numbers, with a compound annual growth rate of more than 11%, more than double that on the rest of the Southeastern network. It is a very successful railway.

My right hon. Friend rightly stated that the national rail passenger survey results from spring 2019 showed that overall satisfaction with the journey for the Southeastern high-speed service was 92% satisfied or good, placing it in the top 10% of all UK train routes; and 82% of passengers were satisfied with the level of crowding on their service, placing it in the top 14% of all UK train routes. In addition, Southeastern’s customer satisfaction survey from the end of December 2019 indicated positive overall passenger satisfaction with the high-speed service, which received a score of 91%. If only the other franchises and train operating companies operated with such levels of satisfaction, my job as Rail Minister would be a lot easier.

There was also a 96% positive response to the question, “Did you get a seat on the train?” My right hon. Friend the Member for Ashford is talking not only about what is going on now but about the future, but that is a remarkably good statistic. However, we are not sitting on our laurels in any way.

Southeastern has quite a lot of capacity. In the morning peak, Southeastern provides 9,772 seats into London, with passenger demand that is higher than that, at 10,888. Already, as my hon. Friends the Members for Dartford and for Chatham and Aylesford indicated, people are standing on their journeys—the statistics prove that to us without any shadow of a doubt. In the evening peak, Southeastern provides 9,423 seats out of London, with a passenger demand of 10,354. Overall, capacity of about 13,000 is provided on HS1 services during peak hours.

My right hon. Friend the Member for Ashford talked about rolling stock. Southeastern regularly reviews whether reallocating stock to different trains would be appropriate to ensure that capacity is catered for. For example, last December Southeastern transferred an Ebbsfleet stop from an overcrowded six-car service to a 12-car service with spare capacity to continue to make the best effect of the assets. However, as my right hon. Friend indicated, only the class 395 and Eurostar trains can run on that route, because High Speed 1 trains need to run at 140 mph, with the technical issues and excitements that he detailed, so it is not possible to use trains from other routes on this one.

Regrettably but inevitably on a rail network, delays occur. However, performance on the Southeastern network on the whole has been positive. This year, around 90% of Southeastern services have arrived at their final destination within five minutes of the published timetable. More specifically, about 87% of peak and off-peak HS1 services have arrived within five minutes of their destination time. Those are relatively good statistics for the rail industry.

Eurostar carries about 11 million passengers a year on services between London and Paris, Lille, Brussels, Rotterdam and Amsterdam, with seasonable services to the Alps in the south of France. Some services call at Ebbsfleet International and Ashford International on the HS1 line. At peak times of year, the number of daily Eurostar services operating in and out of London St Pancras via the HS1 line can exceed 55. We know that it is becoming quite a busy railway.

On 13 June last year, a direct award was signed with Southeastern to extend its franchise for five rail periods to 10 November, with an optional extension of another five periods, which has been exercised. The franchise is now due to expire on 1 April 2020, to ensure continuity of services for passengers following the cancellation of the Southeastern franchise competition.

My right hon. Friend alluded to uncertainty about the franchise’s future. My Department’s objectives for the franchise in the near term include enhancing capacity and continuing to build on the recent improvements in operational performance and reliability. My Department is focused on determining how that can be achieved now that the competition for the franchise has been cancelled. An important consideration for my officials is to align that work with the emerging recommendations of the Williams rail review, due for publication in the next couple of months.

I highlight that because it is quite an important factor to answer one of my right hon. Friend’s questions: what could be done to sort out the problem of overcrowding and to bring in new rolling stock? It is highly likely that the Williams review will decide that franchising is not the way forward for our rail industry, and another model will be introduced quite swiftly. Within the new contracts, an ask could be framed on what rolling stock needs to operate along those routes. I gently suggest to my right hon. Friend that this debate is extremely timely because the thought processes are already happening. The whirring heard in the background is the brains of officials and others in the Department for Transport ticking over how best to include in the ask for companies that might operate those lines in future what rolling stock might be required to improve that service. Now is the best point in which to intervene to get the answer he requires.

[Adam Holloway]

On the point about the future, vis-à-vis HS2, if we had different technology—not obsolete rail technology but new technology such hyperloop— we would be able to avoid some of the problems of HS1, because pods are far more scalable than great big trains.

[Chris Heaton-Harris]

I guess my hon. Friend is slightly unlucky to have the Rail Minister in front of him; had the Minister of State for the future of transport responded to this debate, my hon. Friend would get a good 15 minutes about the wonderful new technologies becoming available on our rail network. My job is to try to ensure that the existing rail network works for the people who use it. I understand his enthusiasm for what could come this way, but I want to improve things for passengers on our railways now and, in this debate, to talk about what we can do to improve the journeys of passengers who use HS1 in the next few years, as improvements will be required.

The Williams review, which will be published very soon, will not just be parked by Government as in the normal process of reviews—we have had a few rail reviews that have reported like that in the past—but will come out in the form of a White Paper. There will be proper consultation. The Select Committee on Transport and Members will obviously take their views, and we will have a Bill in this Session—as mentioned in the Queen’s Speech—that will take the review into legislation. There will be a relatively short-term pitch for my hon. Friend to get involved in.

[Damian Green]

I am heartened by the Minister’s words. He said that, traditionally, reports have often been shelved. Even more traditionally, they have been an excuse for delay because people say, “We have to look at the big picture; therefore, we cannot take individual decisions.” I gently emphasise again that the decision on rolling stock for HS1 needs to be taken in the coming months if we are to avoid the problems that we know will hit in the middle part of this decade. I urge him again that the early decision-making process will be vital post the White Paper publication.

[Chris Heaton-Harris]

The White Paper will come out shortly. It had a good mention in the Queen’s Speech—it will be legislation and it will be the framework by which the problem he outlined for the future can be solved, because it is intended to put the railway on a long-term, sustainable footing, where the passenger is put first. It is important that the next Southeastern franchise award reflects that and fits into whatever the Williams review might suggest. I am completely aware of my right hon. Friend’s point. Any options will fit directly into the Williams review’s conclusions.

Let me conclude by thanking everyone who took part in this debate, and my right hon. Friend for securing this debate on an important part of the railway in our country. We discussed a range of issues on High Speed 1. The popularity of Southeastern’s high-speed service has led to significant growth in passenger numbers, with a compound annual growth rate of over 11%. It is a very successful, normally very good and reliable railway. Options considered for the future of the Southeastern franchise will be developed and informed in a matter that puts passengers at the heart of the process. I guarantee to my right hon. Friend that we understand the time that it takes to get new rolling stock on our network. His words will have been taken to heart.

Question put and agreed to.

11:28

Sitting suspended.

Economy and Society: Contribution of Music

Tuesday 21st January 2020 Westminster Hall

[Sir Roger Gale in the Chair]

14:33

[Conor McGinn (St Helens North) (Lab)]

I beg to move,

That this House has considered the contribution of music to the economy and society.

It is a pleasure to see you in your place, Sir Roger—an unexpected pleasure, but a pleasure none the less. I am delighted, as secretary of the all-party parliamentary group on music, to introduce this important debate. It is good to see so many colleagues from across the House and so many different parts of the country here to support it.

I think we all know that the music industry makes a huge contribution not just to our economy but to the lives of millions of people and our communities every day. It is thanks largely to UK Music that we in this House are so aware of the many issues facing the industry.

[Stephanie Peacock (Barnsley East) (Lab)]

May I take this opportunity to congratulate the outgoing chief executive of UK Music, my predecessor Michael Dugher, on putting a big focus on this issue? My constituency, which he represented before me, has the fantastic Grimethorpe Colliery band and a world-famous youth choir. Does my hon. Friend agree that it is important that we tap into the talent of kids from working-class areas across the country and get them involved in music?

[Conor McGinn]

Absolutely. I share my hon. Friend’s ambition to do that, as well as her warm words for her predecessor. Like him, she certainly was not backward in coming forward to intervene so early in my speech.

UK Music’s new report, “Music By Numbers”, represents the most comprehensive set of data and research ever gathered on the state of the music industry. It reveals that the music industry is worth a staggering £5 billion to the economy and employs almost 200,000 people. According to the report, sectors such as live music grew by 10% in 2018, and live music alone is now worth a record £1 billion.

[Julian Knight (Solihull) (Con)]

The hon. Gentleman is making a very good speech on this important topic. I am almost certain that he has read the report the Select Committee on Digital, Culture, Media and Sport published in the 2017-19 Parliament. Does he agree that although live music may seem healthy on the surface, there are still serious issues there, and does he agree with that report that we should look at business rates for live music venues and at concerns about rip-off secondary ticketing?

[Conor McGinn]

I agree entirely, and I think we will find agreement on that across the Chamber.

[Mark Tami (Alyn and Deeside) (Lab)]

Does my hon. Friend agree that it is important that we protect the music venues we still have? There are still far too many of them closing. Let me mention the Tivoli in Buckley, which is famous, particularly for a sad old punk like me who has seen bands such as Stiff Little Fingers and Public Image Ltd there. It is good that we can still go and see such bands, but venues of that type are sometimes threatened by planning law, particularly where housing is built directly behind them or beside them and there are complaints about opening hours and so on. Ultimately, that can kill those venues.

[Conor McGinn]

I agree entirely. I will come to the points made by both my right hon. Friend and the hon. Member for Solihull (Julian Knight) in more detail later in my speech.

There has been an incredible 10% increase in the number of overseas visitors coming to the UK for shows and festivals, with nearly 900,000 people visiting these shores just for live music events in 2018. Live music is at a record high and continues to draw millions of fans from both Britain and abroad to our arenas and smaller venues alike. “Music By Numbers” identified that music exports are another amazing success story, generating revenues of £2.7 billion, with the best of British creative talent being showcased across the globe.

There is something unique about Britain and its ability to create a globally successful music industry that is envied across the world. Ed Sheeran is the biggest selling touring artist in the world, with the “÷” tour now officially the highest grossing tour of all time. Billboard magazine recently revealed that the O2 Arena in London was the most successful music venue in the world over the past decade, with the Manchester Arena also in the top five. The Theatre Royal in St Helens is slightly further down the list but none the less a critical component of our local live music scene.

In nine of the last 15 years, the biggest selling album in the world has been from a UK artist. Lewis Capaldi recently reached No. 1 on the Billboard Hot 100 in the US. In 2019 we also saw fantastic debut albums from AJ Tracey, Dave, Mabel, Sam Fender and Tom Walker. We continue to be a world leader in all genres, from jazz and folk to grime. We are home to studios that record sensational box office film scores and soundtracks, as well as to many of the most accomplished orchestras in the world.

[Kate Green (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that in-depth classical music training underpins many of the more popular genres as well, including film music and musicals, which are huge earners for the UK economy?

[Conor McGinn]

I agree entirely. It is that diversity and depth that gives UK music its strength.

It is clear that music in the UK punches well above its weight economically, but that is only part of the picture. Music’s value is not purely financial; its social value must not be ignored. Music can have a profound effect on health and wellbeing. Charities such as Nordoff Robbins do fantastic work in bringing high quality music therapy to as many people as possible.

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

Will my hon. Friend give way?

[Conor McGinn]

I will, and I will then make some progress, because many people want to speak and I want to give them that opportunity.

[Alex Sobel]

I thank my hon. Friend for securing this debate and making an excellent speech. On mental health, does he not agree that small venues, such as Brudenell Social Club in my constituency, are a great outlet for people’s mental health, as well as being community resources right across the piece for acting and a whole range of arts? It is not just about music; small venues provide a gamut of benefits to society.

[Conor McGinn]

Absolutely, they are the very definition of holistic therapy. Nordoff Robbins has worked with over 10,000 vulnerable people, holding 37,000 music therapy sessions in 15 different places across the country, and 90% of those who had music therapy last year were clear that it improved their quality of life.

According to a report by the all-party parliamentary group on arts, health and wellbeing, music therapy reduced agitation and the need for medication for 67% of people with dementia. We can all think of many fantastic examples in our constituencies of groups who use music in working with people with dementia.

In Labour’s recent charter for the arts, my party noted the important role of the arts in mental health and wellbeing. I am sure that my hon. Friend the Member for Cardiff West (Kevin Brennan) will speak more about that from the Front Bench. All the evidence suggests that children who are engaged in education through music, or similarly through other subjects such as drama and sport, do better at core subjects such as maths and English. Music can help give young people confidence and creative release. It teaches teamwork and problem-solving skills, and it is often the reason why a child wants to go to school in the first place.

The contribution of the music industry is not just a fantastic national story. The data in UK Music’s report show the tremendous contribution it makes in every town and city across the UK. Merseyside is, of course, synonymous with world-leading British music, and I do not just mean Liverpool. In St Helens, we have a number of excellent local studios that encourage young musicians to nurture and develop their creative talents, such as Jamm, Elusive and Catalyst. Sadly, the Citadel, one of the first music halls in the country, recently closed its doors, but remarkably it has already reinvented itself as an excellent arts provider, using its strong brand to maintain contact and access for people who want to get involved in music and the arts. The Theatre Royal, as I mentioned, as well as other venues, host live music weekly.

St Helens is also the birthplace of: Sir Thomas Beecham, one of the country’s greatest conductors, known for his association with the London Philharmonic and Royal Philharmonic orchestras; the Beautiful South’s vocalist Jacqui Abbott; and Budgie, the drummer with Siouxsie and the Banshees. It is also importantly home to the Lancashire Hotpots. Of course, Rick Astley is from Newton-le-Willows, where I live. I commend him on playing a fantastic gig in his home town last year at Haydock Park racecourse and I commend the Jockey Club on its fantastic initiative, using its venues to promote music alongside horse-racing.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

May I put on record my appreciation of Ealing, which may be little known as a big centre for music, in a heritage way as well? The Who met in Ealing and the Rolling Stones first played there. More recently, we have had Naughty Boy. Does my hon. Friend share the concern of some current musicians that, with Brexit, live touring is in doubt? Any free trade agreement should prioritise that.

[Conor McGinn]

I do, and I will come to that in my closing remarks.

I could say much more about music in my constituency—I am keen to talk about it to anyone who wants to listen to me—but I want to let other colleagues in, so I will move on, but, before I do so, I want to mention our strong brass band tradition. I am proud to be the vice-president of Haydock Brass Band. We have Rainford Band and Valley Brass. We also have the fantastic St Helens Youth Band, which is nurturing the next generation of talent, and the amazing all-female Trinity Girls Brass Band. They are all national award winners. We also have a fantastic male voice choir in Haydock, which has recently won a national competition.

The St Helens music education hub, led by the local council and supported by the Arts Council, is supporting opportunities for schoolchildren to be introduced to music, but it needs more funding and support.

It is clear that music makes a huge contribution, both economically and socially, in our local communities. What do we need to do to ensure that it continues to flourish in the challenging years ahead? I will briefly highlight some areas that the Government need to focus on during this Parliament as part of an integrated strategy for music.

First, grassroots music venues remain vital to both artists and audiences, but they are still, as has been mentioned, closing at an alarming rate. We must continue to monitor that and respond accordingly. My right hon. Friend the Member for Warley (John Spellar), working in collaboration with the Government, did a tremendous job to ensure that planning laws were amended to integrate the agent of change principle to protect music venues from closure.

[Siobhain McDonagh in the Chair]

Challenges still exist on business rates. I welcome the commitment in the Queen’s Speech to ensuring that music venues benefit from rate relief, but when precisely will that come into effect? Will the Government commit to more frequent business rate revaluations to guarantee that huge hikes in rates do not occur again?

Secondly, copyright provides the framework of growth for music. New protections for creators are coming in the form of a copyright directive that will enable fairer payment to musicians from services such as Google’s YouTube, but our expected departure from the EU may mean we cannot implement the directive after all. Will the Government outline their plans to implement the spirit of the copyright directive and other legislation? The deputy chief executive of UK Music, Tom Kiehl, recently wrote to the Prime Minister. Will the Minister let us know when he can expect a reply?

Thirdly, despite music’s success, there remain significant challenges to our talent pipeline. It is fair to say that we face a crisis in music education, which underlines the threat to our ability to develop future talent. Arts funding in St Helens, which includes music, is down by a quarter since 2013. One of the most working-class areas in the country, which has a proud tradition of music, has seen its funding diminish. Over the past five years, the number of people studying A-level music has declined by 30%. We know that social divides are leading to inequality of opportunity, so will the Government work with schemes such as UK Music’s rehearsal spaces network to increase the provision of music in areas like St Helens? The Government’s commitment to an arts premium might present benefits, but when does the Minister expect to come to the House to provide more detail on what that will entail? Can we see progress on the new national plan for music education?

Fourthly, we know about the importance of music exports: the Government currently support the music export growth scheme, and the international showcase fund contributes to that. What plans are there to ensure that funding remains for those vital schemes?

Fifthly, the music industry relies on workforce that is heavily self-employed—about 72%. What plans do the Government have to make it easier for self-employed people to participate in shared parental leave, given their current disqualification and the benefits to overall diversity in allowing them to participate? I pay particular tribute to my friend Olga FitzRoy for her work on that.

Fiscal incentives such as tax credits have produced huge benefits for other creative sectors, but currently music does not benefit from the same mechanism as film, TV and video games. Will the Minister commit to working with the Treasury to see whether similar support can be made available?

Finally, Brexit and the loss of freedom of movement, in both people and goods, could have a profoundly negative impact on the live music touring experience. Will the Government work towards a passporting arrangement, so that there is a reciprocal system and musicians can continue to perform with minimum disruption post-Brexit? Will they work with EU member states to ensure that the imposition of a carnet system on music equipment does not cause delays to gigs?

In closing, I pay tribute to UK Music, the umbrella body for the commercial music industry. Its chief executive, Michael Dugher, formerly of this parish, will soon be moving on to new pastures. On behalf of everyone in this place who takes an interest in music, I pay great tribute to the tremendous work he has done and the way in which he has led his organisation to aid our understanding.

I applaud the work of UK Music’s chairman, Andy Heath. Andy has been at the helm of UK Music since its inception and has held together the interests of its members. When I look at the unity of purpose within UK Music, in a very diverse sector, and then look at other sectors that do not have that, I see how his formidable leadership has brought people together.

PRS for Music is led by the excellent, recently-appointed Andrea Martin, alongside long-standing chairman, Nigel Elderton. I have a special award for John Mottram who does a lot liaising with Members of this House to promote music.

PPL is led by the superb chief executive Peter Leathem, who, like me, is of good Armagh stock. I applaud the other UK Music members—the Association of Independent Music, the British Phonographic Industry, the Featured Artists Coalition, the Ivors Academy, the Music Managers Forum, the Music Publishers Association, the Music Producers Guild and the UK Live Music Group. They have worked together with great tact and diplomacy, and influenced this House. I especially thank Horace Trubridge and the Musicians’ Union. He is held in high esteem in the trade union movement and the music industry, delivers much for the union’s members and plays a hugely constructive role.

The day before the Prime Minister took office in July, the outgoing Administration produced a disappointing response to the Digital, Culture, Media and Sport Committee’s excellent report into live music. The response failed to grasp the true ambition and potential of our music industry, or to adopt some reasonable and sensible recommendations made by the Committee. This debate presents an opportunity for the new Government. I welcome the Minister, who is returning to his place; I know how much he is personally invested in the subject and pay tribute to him for it.

The new Government can start afresh and set out a new and exciting strategy for how they see the music industry contributing to our lives. I look forward to hearing the rest of the debate, and I welcome the support of other Members in this aim.

[Siobhain McDonagh (in the Chair)]

I apologise to all right hon. and hon. Members for my late arrival. In spite of that, the debate is well supported, meaning we will need contributions of four minutes; I apologise for that.

14:52

[David Warburton (Somerton and Frome) (Con)]

It is a pleasure to serve under your chairmanship, Ms McDonagh, and to have another opportunity to talk on a subject that is close to my heart.

I thank the hon. Member for St Helens North (Conor McGinn) for securing this debate and for his record of championing the interests of music and musicians in this place. I echo his tribute to the outgoing chief executive of UK Music, Michael Dugher, for all his fantastic work during his tenure. I know that wherever he goes in the future, he will continue to be a passionate and important advocate for music and the creative sector.

As we leave the European Union, and with the majority Government we have now, we find ourselves at a crossroads. The direction that we choose to take will have enormous ramifications across almost every aspect of Government policy. As UK Music pointed out in its post-election letter to the Prime Minister, that is particularly true in respect of the future of the music industry.

Before turning to policy specifics, it is worth talking about something more fundamental: music education. As chair of the all-party parliamentary group on music and vice chair of the all-party parliamentary group on music education, and as a former—not very good—music teacher, I have spoken on this topic on a number of occasions; I apologise to anyone who has been unfortunate enough to hear me before. During the election campaign, the Prime Minister spoke about smoothing out regional disparities and levelling up the parts of the UK that have felt neglected under successive Governments. In the case of music education there is a similar disparity that needs levelling up.

Around 50% of students in independent schools receive music tuition, compared to just 15% in state schools. According to last year’s “State of the nation” report, there has been a fall of 6.4% of curriculum time dedicated to music between 2010 and 2017. Last year’s Department for Education workforce data showed a drop in the music teacher workforce at key stage 3 of an enormous 26%. This is not the place for a debate about the school curriculum, but I restate my keenness for the Government to re-examine the possibility of adding a sixth pillar to the EBacc. As I have said before, a core curriculum that excludes the arts is an oxymoron.

[Damian Collins (Folkestone and Hythe) (Con)]

Does my hon. Friend agree that there have been some fantastic examples of regional success? Feversham Primary Academy in Bradford, which the Select Committee looked at, has transformed its curriculum and put music at the heart of everything it does, and has seen a dramatic improvement in the school’s results

[David Warburton]

Absolutely; my hon. Friend is entirely right. There is some superb work going on around the country, particularly with music hubs, although it can vary from one place to another. The music hubs alone have enabled more than 700,000 children from state-funded schools to learn a musical instrument.

Many challenges faced by the music industry are also a demonstration of its enormous success. As we have heard, the “Music By Numbers” report shows a record £5.2 billion contribution to the UK economy last year, and record employment within the industry, with nearly 200,000 people directly employed in the music sector. It is a further tribute to both the resilience and the success of our music industry that we saw a 10% increase in overseas visitors to UK shows and festivals last year. When Parliament was mired in the Brexit mud, many of us enjoyed the mud at Glastonbury, some of the car parks and the furthest, most distant and inaccessible fields of which are in my constituency.

As this Government give definition to Brexit, it is worth remembering how much we ought to keep from our membership of the European Union. In a previous life, my company used to provide the global mobile content for Napster, Kazaa and many others. The explosion of streaming means that music has become even more commoditised, with almost all recorded music instantly available, but with platforms, such as YouTube, coughing up almost homeopathic amounts to artists and composers.

With little time left, I will talk to the motion and emphasise why music is so valuable for society, not just in economic but in absolute terms. For several years I worked as a music teacher at a rather gritty comprehensive school in London. I have seen at first hand the transformational effect that music can have, particularly on the outlook of the most profoundly disadvantaged and disengaged students.

As hon. Members will know, Goethe memorably described architecture as “frozen music”. Without wanting to be grandiose, music can act as “liquid architecture”, providing the structure and creative discipline that is enhanced, rather than compromised, by the joys of aesthetic satisfaction.

14:57

[Kate Green (Stretford and Urmston) (Lab)]

I am proud of Manchester’s great musical tradition, which includes our world-class orchestras, the Hallé, the Manchester Camerata and the BBC Philharmonic—whose guests are seen at concerts on a number of occasions—and our superb music institutions, Chetham’s School of Music and the Royal Northern College of Music. As we have heard, they make a great social, economic and cultural contribution, not just to Greater Manchester and our region but nationally and around the world.

There is a massive payback on the investment that we make into the music sector, but funding is a real problem, especially for regional orchestras and musicians. What more can the Minister do to work with the Treasury to encourage and support regional philanthropy, including through possible fiscal measures? I also make the case for sustainable and secure public funding. That will soon be a particular issue for the BBC Philharmonic, as consideration is given to the future of the licence fee.

Our music institutions have all highlighted to me the importance of developing a pipeline of talent. Our great orchestras, college, music school and music services have adopted a partnership approach. I pay particular tribute to the Trafford music service, led by the amazing Ruth O’Keefe, which is part of the Greater Manchester music hub and gives many children in Trafford the opportunity to develop their musical potential.

As I have said, developing talent to its full potential through classical and intensive training is important, not just to the classical music sector; those musicians also provide the bedrock of all other genres, including film, pop and TV music. Musical education is very important to allowing young people to achieve their full potential through the highest quality classroom music activities, instrumental lessons and participation in choirs, bands and groups.

One issue that I have been asked to raise in particular, which the Minister could perhaps discuss with his counterparts in the Department for Education, is chaperone licensing. The music service is subject to stringent chaperone licensing, similar to commercial businesses and different from what would be required for schools more generally. That puts real cost and administrative burdens on the music service. Is the Minister prepared to pursue the concerns that the music services are raising with me with his colleagues in the DFE?

The work that is done by our music service and in our schools and classrooms is supplemented by our orchestras’ own fabulous activities. The Hallé Orchestra, for example, has welcomed literally tens of thousands to the Bridgewater Hall to perform and train with its own professional musicians. The BBC Philharmonic’s “Ten pieces” and “Bring the Noise” programmes have also been very well received.

My hon. Friend the Member for St Helens North (Conor McGinn) rightly pointed out the benefits of music in reaching some of our most disadvantaged and marginalised communities. We see some innovative approaches to this work, for example by the BBC Philharmonic again, partnering with the Royal Northern College of Music on the Pathfinder scheme. I also join him in commending the excellent work of the music therapy charity Nordoff Robbins. I have seen its work in my constituency with people with learning difficulties, with refugees and with people with dementia; it has the power to transform and light up those people’s lives.

Nordoff Robbins believes, and I agree, that everyone should have the right to participate in music in ways that meet their needs. There is a particular opportunity, therefore, to develop music therapy in the context of social prescribing. Again, I wonder whether that is something the Minister could discuss with his counterparts, this time in the Department of Health and Social Care.

15:01

[John Howell (Henley) (Con)]

It is a great pleasure to serve under your chairmanship, Ms McDonagh. It is also a great pleasure to participate in a debate with so many members of MP4 here on the Front Benches. I feel humbled in their presence and I hope they will give us a rendition later in the debate.

I am well aware of the economic benefits of the music industry; my son composes music for films, so I see the inside of that industry from a family point of view. However, I will concentrate here on the benefit to society. People may remember that Edward Elgar once said:

“My idea is that there is music in the air, music all around us! The world is full of it, and you simply take as much as you require.”

However, I think those days have long passed.

A good example of that is in the availability of organists. I happen to be an organist myself, so I speak from personal experience. The lack of organists is much more important than the lack of people going to church, and shows the inability of young people’s education to pick out the talent that exists and to encourage young people to go on to play the organ and to develop it. That must be tied in with what the Arts Council has asked for in terms of a diverse and appropriate potential workforce—a point that it is making very forcefully.

There are two other examples that I would give of how music affects society, both from my own constituency. The first is an organisation called Not a Choir. It is actually a choir, but it is for people who have never sung before, believe that they cannot sing or in some way feel embarrassed about trying to sing. It has given the people who sing with it a tremendous amount of solidarity with each other. It has taken away a lot of the loneliness they feel by allowing them to participate and perform together. They perform publicly together, and their performances are very much appreciated by the people who listen to them and in the villages around them.

The second example is a charity in my constituency called Music for Autism, which is run by the conductor of the Orchestra of St John’s. He gets members of the orchestra to work with young autistic people and provide them with a good music therapy experience. It is a delight to watch not just the young autistic people’s ability to latch on to the music and their being helped with it, but also how much the musicians who participate get out of it. We only have to see their faces when they are performing to realise that this is something worth doing.

I suggest to the Minister that more needs to be put into education for musicians and talent spotting of musicians, and also that more needs to be put into efforts to ensure that music is at the heart of our communities, both now and in the future.

15:05

[Jo Stevens (Cardiff Central) (Lab)]

I congratulate my hon. Friend the Member for St Helens North (Conor McGinn) on securing this debate and on making such a great speech.

I am very grateful for the opportunity today to speak about music, particularly live music venues, which I always take the opportunity to champion because they are very precious and, as we have heard today, constantly under threat. I represent a city centre constituency, in a city known not just across the UK but around the world for its songs, its singers and its musicians.

We have a very rich cultural history in Cardiff, and I am determined that we will have a rich cultural future too. To ensure that that happens, we need to ensure that our school music teachers have the resources and time to inspire pupils from the earliest age to participate in music and to understand the joy and wellbeing, which have been discussed today, and the opportunities that singing or playing an instrument can bring.

We know, though, that the past 10 years of Government austerity and the savage cuts to the Welsh budget have made the provision of music much more difficult. I think that is the pattern across the UK. I pay tribute to the music teachers up and down the country who do such a great job—actually, for them it is not a job but a vocation—in such difficult circumstances. But it is not only the teachers; it is the talented volunteers who conduct our orchestras, who transport children and their instruments to eisteddfods and who fight for venue space and practice venues every day of the week.

In the centre of my constituency we have independent live music venues of all types and sizes, catering for every possible taste. I promise hon. Members that if they come to Cardiff Central, on every night of the week they will be able to listen to great live music of some type or another, from the Royal Welsh College of Music and Drama, the incredible auditorium that we have at Saint David’s Hall and the noise bowl of the Principality Stadium, where I saw the Rolling Stones, to Fuel Rock Club, Clwb Ifor Bach and the Globe.

However, since I was elected in 2015, it feels as though colleagues and I have been continuously fighting to save live music venues across the constituency, from the Womanby Street campaign to saving Guildford Crescent and Gwdihŵ and, just this week, another live music venue, 10 Feet Tall, a small but long-standing venue under threat of closure. We have built a grassroots movement in Cardiff, with Daniel Minty from Minty’s Gig Guide, the Music Venue Trust, the Musicians Union and UK Music, to value and support venues and to try to save as many as possible.

Our Labour council in Cardiff has set up a music board to champion our music scene locally, nationally and internationally, and to protect and promote music at grassroots and all levels. I am proud that our Welsh Labour Government was the first Government in the UK to introduce the agent of change principle into planning guidance and to help to protect live music venues. Along with colleagues here, I co-sponsored the Bill by my right hon. Friend the Member for Warley (John Spellar) to do the same in England, and I worked with a Labour colleague to do that in Scotland too.

I will briefly mention our Digital, Culture, Media and Sport Committee report on our live music inquiry, which took detailed and comprehensive evidence from across the sector and made a series of recommendations to the Government to protect and enhance the contribution of live music to our economy and society. We know what the problems are, and we have heard about them today. They include business rates, planning development pressures, the need to extend creative industries tax reliefs and parity of funding for grassroots venues through bodies such as the Arts Council. Talking of arts councils, yes, we need to continue to support high arts and culture, but I also want those kids who are setting up their first band in their mum’s garage to have parity of support.

[Damian Collins]

On the subject of the Select Committee report on supporting community music venues, does the hon. Lady agree with me that it is also important that local towns have a robust plan for their own areas to support venues? Folkestone in my constituency has launched a music town initiative. It is important that local authorities work with venues to support them both in terms of business rates and how they sit with the local planning regulations as well.

[Jo Stevens]

I could not agree more with the hon. Gentleman, who, as Chair of the Select Committee in the previous Parliament, did such a fantastic job of leading our Committee on the inquiry. I want to see music boards in every town and every city so that every child has the opportunity to fulfil their talent.

Lots of questions have been asked of the Minister, but may I add two more to his list? The Government’s response to our report was very thin. I appreciate that it was right at the end of July, but will there be a statutory consultative body to promote the protection of music venues so that they can provide advice to local authorities on the implementation of the agent of change principle and see how it works in practice? We are still waiting—it was not responded to in the report—for a full post-legislative memorandum for the Live Music Act 2012. Will the Minister address that in his comments?

15:10

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to see you in the Chair, Ms McDonagh, and a pleasure to get the opportunity to big up my own constituency of Glasgow Central, which I am sure must be among the most musical constituencies in the country. We have not only been awarded a UNESCO City of Music status—the only city in the UK other than Liverpool to have that status—but we have a wealth of different venues and talent in the city.

We are at the moment in the midst of Celtic Connections, an event founded in 1994 to give light to cold winter nights in January and to bring people into the city, and it now has a programme of more than 300 events over 18 days, with 2,100 musicians from about 50 countries. In addition to having events within venues in the city, it also works in the community through an education programme to involve the next generation, and this year, for the first time, through Celtic Connections in the Community, it is working with BEMIS to extend it to people with ethnic minority backgrounds within the city as well, which is really important when we talk about traditional folk music and making sure that it reaches and involves as many people as possible.

We also have within the constituency iconic venues such as the Barrowland Ballroom, King Tut’s Wah Wah Hut, the Hydro and the SEC. The Hydro, which opened in September 2013, brought £131 million to the city in its first year. It has helped the regeneration of Finnieston, where it is now impossible to get a bad meal, and has brought new people and new growth into the area, providing the jobs that go with that as well.

We are incredibly lucky to have the Royal Conservatoire of Scotland in the constituency as well. When I went on a tour of the RCS, every door that was opened would bring some delight, with different types of music being played in different ways and people making music together who might not have found each other otherwise. It is a real boon to have that in the city.

We also have organisations such as the Royal Scottish National Orchestra, Scottish Ballet, the BBC Scottish Symphony Orchestra, the National Youth Orchestra, Scottish Opera, and younger bands such as SambaYaBamba— who played outside in Parliament Square on one occasion, which stopped the traffic in the city. It is great to see such joy being shared. For young people we have a Big Noise Sistema orchestra, based in Govanhill since 2013. In recognition of some of the work of Big Noise, Nicola Killean, the CEO, got an OBE in the new year’s honours. They work with children in Govanhill, from St Bride’s, Holy Cross, Annette Street and Cuthbertson primaries and nurseries, and with Holyrood Secondary. They work with 1,200 children a week, bringing together children who have very different backgrounds—many children in Govanhill do not have English as a first language—and all the outcomes from the project have been extraordinary. As I said, in an area where children might not have much English, they can communicate with music and enhance their abilities. All the outcomes from this project found by the Glasgow Centre for Population Health have noted how it increased confidence, academic skills, resilience and happiness. I am not quite sure how we measure happiness, but it is certainly very much worth investing in for the good of the community.

I also want to mention the risk, which is something for the Minister to take away to the Home Office. There are significant risks in the way the Home Office conducts itself, and risks with Brexit with regard to visas and with the ability of artists to move and transport equipment. Donald Shaw of Celtic Connections has flagged that in the press. He mentioned particularly the risks for American people looking to book to come here and the way in which African and Indian artists are treated. He says they are treated very badly in the application process and that it is all about suspicion rather than welcome from the UK. Last year, six artists from the Devasitham Charitable Foundation in Chennai were unable to come when two blind artists were not allowed a visa from the Home Office. I ask the Minister to reflect on that and on the success story of music in Glasgow and in Scotland and do all that he can to make sure that that continues in future.

[Siobhain McDonagh (in the Chair)]

I apologise for what I am about to say, but unfortunately contributions will now have to go down to three minutes.

15:15

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure to see you in the Chair, Ms McDonagh, and to follow some excellent contributions. I thank my hon. Friend the Member for St Helens North (Conor McGinn) for securing the debate. I want to draw attention to my declaration in the Register of Members’ Interests and also pay tribute to UK Music and the Musicians’ Union, who have done so much at different levels to promote the industry and the challenges that it faces.

Coming from a working-class background, I know the impact of music in my own life. Comments have been made about the importance of music education, and free and affordable music education made a difference to me. I had opportunities as a youngster, particularly with free music education in school, and also through things such as the South Glamorgan and Cardiff and Vale youth orchestras and choirs, which gave me the confidence to go on later in life to perform at venues such as the Royal Albert Hall and the Edinburgh Fringe, and for President Bill Clinton with the a cappella groups that I have taken part in. I would not have had those opportunities and the confidence to perform if I had not had those free and affordable opportunities when I was younger.

I second much of what my hon. Friend the Member for Cardiff Central (Jo Stevens) said about Cardiff’s reputation as a music location, but also about the challenges that we face in terms of live venues. I support the campaigns that she and others have led around Womanby Street, Guildford Crescent and elsewhere. I also pay tribute to the many venues.

I have an incredible creative sector in my constituency of Cardiff South and Penarth. We are host to the Wales Millennium Centre, the Welsh National Opera and the BBC National Orchestra of Wales, which is not only an incredible orchestra but provides many film and TV soundtracks, including recently for “His Dark Materials”, which has been syndicated around the world. The music is by a Scottish composer, Lorne Balfe, but the BBC National Orchestra of Wales recorded it. I also pay tribute to the many smaller creatives and others who are generating the next generation of talent: people such as Shelley Barrett, who runs Talent Shack, and, at the other end of the spectrum, Penarth Soul Club, enabling people to engage in all types of music locally. We have venues such as the Tram Shed and the Norwegian Church, which I want to see retained for community and cultural use, including music. We also have more classical venues such as St Augustine’s in Penarth.

I want to add my support to two crucial issues. One is around Brexit and the campaign by the Musicians’ Union on the crucial need for an EU-wide touring visa for musicians who are working, and we want to see that last a minimum of two years, be free or cheap, and cover all EU member states. We want to get rid of the need for carnets and other permits, and, of course, we want to cover road crew, technicians and all the other staff necessary for musicians to do their job.

I also want to highlight the incredible community impact of so many musicians. In my constituency and more broadly, 85% of orchestral musicians who joined the industry in the past 10 years are involved in community outreach, and 97% of all orchestras. Groups such as the Keith Little jazz trio in my constituency in Penarth do incredible work with organisations such as Music in Hospitals & Care. I was able to see the work they were doing, funded by the Waterloo Foundation, during the recent election campaign. Veterans’ choirs also provide opportunities in music to a whole new range of people.

15:18

[Jeff Smith (Manchester, Withington) (Lab)]

Thank you for calling me to speak, Ms McDonagh. I congratulate my hon. Friend the Member for St Helens North (Conor McGinn) on securing the debate and for giving me the opportunity to plug my former profession. There are not many former nightclub DJs in Parliament. In fact, I might be the only one. While people rightly talk about the importance of the live music scene, I note the importance of electronic dance music and nightclubs in making our cities destinations. Twenty years ago I used to visit Cream in Liverpool and Gatecrasher in Sheffield—for research purposes—and I remember they used to attract people from all over the country. The same applies now to the Warehouse Project in Manchester, which makes a big contribution to the music scene that Manchester is so proud of, and to our economy. It is a key part of our identity in Manchester, and it is certainly key to the economy.

I am grateful to UK Music for leading on the Greater Manchester music review last year. A couple of figures were produced. In 2017, live music events in Manchester had 1.7 million attendances. In 2017, Greater Manchester had 703,000 music tourists. That gives some indication of the importance to the economy of music in Manchester and Greater Manchester. There is an ecosystem that sustains the music scene, from very big venues such as Manchester Arena—one of the most successful large venues in the world—down to the smaller grassroots venues.

That brings me to two asks. First, we are pleased that business rates relief for grassroots music venues was in the Tory manifesto and the Queen’s Speech. I know the Minister is passionate about that and I am genuinely pleased to see him in his job. I hope that he will have a word with the Chancellor before the Budget in March to make that point. Secondly, I want to repeat the point about the importance of the EU-wide touring passport, ahead of Brexit.

The Greater Manchester music review is a very good report. It came up with a number of recommendations, and I will pick some of them. The first was for the establishment of a Greater Manchester music board. I am pleased that our excellent Mayor, Andy Burnham, has pledged to set that up. I look forward to progress on that when Andy is re-elected in May, as I am sure he will be. Secondly, there is a recommendation about the agent of change principles, which are important. It is great that city centres are now thriving as places to live—I remember that Manchester city centre was pretty much empty in the ’80s—but it should not be at the expense of our much loved music venues.

I shall have to leave my remarks there, but I recommend that people read the report on Greater Manchester as well as the report from UK Music, which makes some very important policy asks of the Government.

15:21

[Louise Haigh (Sheffield, Heeley) (Lab)]

I congratulate my hon. Friend the Member for St Helens North (Conor McGinn) on securing this important debate.

Growing up in Sheffield in the 1990s, I took access to live music venues for granted, and we had access to not just some of the best venues in the country, but some of the best music in the country. When I was a teenager the Arctic Monkeys were starting to gig at the Grapes, the Boardwalk, and the Harley, as were bands such as Reverend and the Makers, Milburn and Longpigs. Sadly, not one of those venues still hosts live music today, but all those bands would say that without them it would not have been possible for Sheffield to produce the groundbreaking music that it is now internationally renowned for. I am told that when Radiohead toured with their debut album, “Pablo Honey”, they played 400 music venues of around 500 capacity across the UK. Only three of those music venues are still open today.

Those venues are the incubator of talent and we are feeling their loss across the music industry in the UK today. What is more, arts and culture funding too often gravitates towards prestige and towards London, rather than flowing towards talent. Jon McClure, the “Reverend” of Reverend and the Makers, said to me ahead of today’s debate:

“It is certainly true that the arts have become the preserve of the rich kids, for boys and girls like me are now excluded in the main, through a lack of access to the networks of power, combined with a lack of resources.”

That is why today’s debate is so important, as is the incredible work of UK Music and other bodies, such as the Musicians’ Union. They have fought to save threatened venues, which they recognise as the heart of a revival that must come.

I am incredibly proud to sit on Sheffield city region’s music board, which was set up by UK Music and our Mayor, my hon. Friend the Member for Barnsley Central (Dan Jarvis). It is the first to be set up outside London and is an essential part of the revival. It promotes work such as that of Higher Rhythm, which delivers the breakthrough artist development programme to give intensive support to six Yorkshire artists annually, with a package of opportunities to help them to make tangible progress in their careers. However, we must do more. We have heard about the importance of music education, and I hope that the combined authority will look at UK Music’s proposal to create six music education hubs across the region. We must ensure that the agent of change principle is properly implemented in all our communities, and the Government should look at extending existing relief schemes to cover live music venues.

Finally, no Government can claim to be serious about global Britain while cutting off our greatest cultural export at the knee in the Brexit negotiations, so I hope that the Minister will look carefully at the musicians’ passport. I want the kids in my constituency to have the same opportunities that musicians had in past decades. I want them to be rewarded based on talent, and not on networks or how many followers they can buy on social media. I want them to be able to showcase their talent on stages in Sheffield so that they can then showcase it to the world. Those things are not “nice to haves”. They are fundamental to our economy and culture, and they tell the world everything about what it is to be British.

15:24

[Alex Davies-Jones (Pontypridd) (Lab)]

This is my first time speaking in a Westminster Hall debate, and I am grateful that it is on a subject so close to my heart. I congratulate my hon. Friend the Member for St Helens North (Conor McGinn) on the way he has led this important debate.

Last week I gave my maiden speech, in which I waxed lyrical about how my constituency gave the world the Welsh national anthem, Cwm Rhondda, and Sir Tom Jones. The south Wales valleys are built on industry and music: both go hand in hand. Were it not for the coal mines, we would not have our world-famous brass bands, which are synonymous with culture and heritage. My hon. Friend the Member for Barnsley East (Stephanie Peacock) mentioned the Grimethorpe Colliery Band, and my hon. Friend the Member for St Helens North referred to his constituency’s bands, and I pay tribute to them, but in Wales we have the world No. 1 brass band, the Cory Band—a fantastic symbol, spreading Welsh culture and heritage across the world and at home. Were it not for our chapels, we would not have our choirs, whose hymns and arias are synonymous with rugby.

Speaking of my other love, we all know that Wales is a mecca for sport tourism. The Principality stadium is the rugby venue envy of the world. I am sure that anyone here who has had the privilege of being in the stadium on match day, hearing the anthems belted out, will agree that it is nothing short of spine-tinglingly awesome. However, for all the sporting glory that Wales has to offer, Members may not know that in 2018 Wales welcomed more than 350,000 music tourists, who helped to contribute £124 million to the Welsh economy. That figure is growing.

We need to do more to protect grassroots venues, helping them to thrive in our communities. My hon. Friends have mentioned some of the work they have been doing to protect such venues in Wales. Just before Christmas it was announced in my constituency that Rhondda Cynon Taf County Borough Council will be working with the Awen Cultural Trust and the Arts Council of Wales to totally transform the much-loved Muni, in Pontypridd. Plans to improve the arts centre include investing £4.5 million to create a first-class arts and entertainment venue for residents in my constituency and beyond. That is wonderful news, and I cannot wait to attend the first concert, once the Muni reopens in the summer.

One of the things that I am most passionate about is nurturing future talent, including reversing the decline of music education, so that children from every background have access to music. I am extremely fortunate that I was able to learn not one or two but four different instruments at school. I do not profess to be a concerto-worthy soloist—I am more of a jack of all trades as a performer—but I would never been able to have those opportunities were it not for the vital funding of peripatetic music education in my comprehensive school. I welcome the strides that the Welsh Assembly’s Culture, Welsh Language and Communications Committee is making in that field, and support the Welsh Labour Government’s feasibility study on the options for delivery of music services and the creation of a national plan for music education.

Wales has a long tradition of inviting performers from Europe to play at festivals, venues and eisteddfods across Wales, and other hon. Members have mentioned the impact that Brexit could have on that. I know that the Welsh Labour Government will do all they can to ensure that Wales remains open to performers from across Europe after Brexit, and will look at all avenues to ensure that such cultural exchanges can still take place.

15:27

[Pete Wishart (Perth and North Perthshire) (SNP)]

I refer to my entry in the Register of Members’ Financial Interests, and I congratulate the hon. Member for St Helens North (Conor McGinn) on securing this vital debate, and on the concise and articulate way in which he marshalled the case for UK Music. I want to pay tribute to Michael Dugher, who has led UK Music so diligently and effectively in the past few years. Like everybody here, I wish him all the best in future—and Andy Heath who has been the chair of UK Music. We look forward to continuing to work effectively with whoever emerges in those roles.

I remember standing here almost 19 years ago, having secured what was probably at that point the first ever debate on the music industry in the House. Having come straight from the concert hall floor—having played with Runrig and Big Country, and as the only MP who had appeared on “Top of the Pops”—I was keen that some of the issues affecting the music industry should be taken up by Parliament and be addressed by MPs. The all-party parliamentary group on music was formed almost immediately following that debate, and the Minister was a notable chair of it a few years ago. Most importantly, it brought the sector and the industry together with parliamentarians. Over the course of the years, it has emerged as an effective conduit. What we do in this House becomes available to members of the music industry. When I think of all the things that we have achieved in the past 20 or so years, I think that was really important.

When I first came to this House it was the days of plenty in the music industry. I am sure most people will remember that. CD sales were at an all-time high, and live music was in incredibly good shape, with the start of some of the really important arena tours. However, out on the horizon a dark shadow was starting to emerge, which would hit all of our creative sector. That was digitisation, with the threats—and also the opportunities—that it presented. Music was the area affected by digitisation because it was the easiest to clone and replicate. That made it vulnerable to pirates, and those who wanted to make a quick buck on the backs of the creativity of artists. In those days, it was just Napster, which I heard somebody refer to earlier, and it was a big challenge to the music industry.

It was a tough time dealing with all that, and I pay tribute to the music industry for the way it responded to that challenge in the course of those 20 years. We are not on top of everything yet, but huge progress has been made in response to the many challenges put forward, by closing down opportunities for pirates, by responding positively to new technologies and by ensuring that new services were made available, so that we can make a positive choice about the sources of music coming our way. While we are not totally on top of it, huge progress has been made in that time; it has been quite remarkable how all that has been taken up. There are still huge issues with piracy, as hon. Members might expect. In fact, some pirates come in cruise liners now, in the form of giant tech companies such as YouTube and Google. Those issues must be properly addressed, and I have a couple of suggestions for how that might be done.

We still lead the world in music, just as we do across practically every single creative sector, whether it is fashion, design, film or television. However, it has been most notable in music in the last few years. I will not repeat what has been said about some of the amazing artists who have had the biggest selling albums in the world in the past few years, although I will mention Lewis Capaldi, because I have managed to see him a couple of times recently and he is a fellow Scot. His success in the course of last year is remarkable, mirroring almost exactly what Adele achieved just a few years ago with her amazing albums. That shows the reach of music from across these isles. Why is that? If we could bottle it or sum it up somehow, it would be remarkable. It is something about the way that we have culturally set up this country, where people are allowed to develop their talents and arrangements and have the opportunity to come forward with their fantastic works of imagination and talent.

However, it is also something to do with the industry, and I praise the industry for the way it ensures that artists are properly resourced, promoted effectively and able to be sold internationally. It is the way it is all packaged. Things do not happen by accident. We have a successful music industry because of the creativity of the people who make the music and the infrastructure that supports that, which is the music industry, which is why it is so important that we support it now.

Music is still the field of dreams where young people can secure a career on the strength of their imagination and talent. However, it is also a means for people to experience enjoyment. Music timetables and chronicles people’s lives and is an important feature of our everyday experience and all our memories. It is even great to get together with friends and bash out a few tunes, just to enjoy it.

However, what we as politicians do to support the music industry is really important. First, and most importantly, we have to ensure that our artists, musicians and the talent that we have are properly rewarded for the fantastic works that they produce. If we do one thing, it should be to ensure that our artists are properly rewarded for what they do. That is why I support the call to fully adopt into UK law the EU copyright directive. That simply has to happen. It would be the single biggest intervention that we could make to most assist the industry and our artists. In one stroke, we could effectively tackle the recalcitrance of the large tech companies and the pitiful amounts that YouTube pay our artists for the music that they produce. It is simply appalling to exploit our artists in such a way. They should be rewarded properly.

More than that, as part of their legislation around online harms, the Government should consider the economic harms caused by copyright infringement. It is in the gift of the Government to do something about that almost immediately. Real harm is caused online, and I hope that, as a real way forward, the Minister will look again at including those harms in the digital harms that the Government are looking at just now.

We have to do something to ensure that the appalling decision to leave the European Union does not make a terrible situation even worse for our musicians. The ending of freedom of movement is the single biggest Brexit threat to our musicians and artists, and we must do everything possible to address the inevitable fallout of this decision to stop musicians travelling freely across our continent.

As my hon. Friend the Member for Glasgow Central (Alison Thewliss) mentioned, in Glasgow just now, the last huge UK music festival while we are in the EU is taking place, the incredible Celtic Connections. As the name suggests, it is about connections, it is global, and it brings together artists from around the world. Even before we have left the European Union, there have been genuine concerns, as my hon. Friend referenced —visa anxiety. People are confused about their right to travel and what our leaving will mean for them as artists and musicians. That has to be addressed, and there are a number of solid suggestions for how that could be taken on.

Music touring is where artists make their money, and we have to make it easier for them to play internationally. It is one of the greatest thrills and experiences that musicians can have, and to close that down, as we are doing by ending freedom of movement, will impact on every musician and artist in this country. Ending freedom of movement will inevitably bring costs—visa arrangements, bureaucracy and the confusion about how all of this will happen—so I totally support the UK Music and Musicians’ Union call for a single, EU-wide live music touring passport to avoid those restrictions. I really hope that the Government take that seriously. I know the Minister has looked at this before, and I know it is within the gift of the Government to do something about it. If one initiative could solve this problem, it would be to do with that.

However, another issue has come up that has not been mentioned so far. I refer to a report by the former chief executive officer of the British Academy of Songwriters, Composers and Authors, Vick Bain, about the gender gap in the music industry, which has to be addressed and stopped. Her fantastic recent report outlined that less than 20% of acts signed by major labels are female. That simply cannot continue. It cannot go on. Gender equality and the gender gap in the music industry have to be properly addressed. It is almost bizarre that an industry inhabited by progressive young people has allowed a gender gap such as this to emerge. We have to ensure that we get on top of that.

There might be a number of reasons for that. The whole lad culture of male camaraderie in bands, which has gone back for decades, might have something to do with it. Whatever it is, this has to be addressed. We have to start to get serious about sexism in music; music is sexy, but it does not have to be sexist. We have to ensure that we start to tackle the real and significant issues in this area in the music industry, and we should all be up to that challenge as we move forward.

Music is for everybody. I had the fantastic opportunity of having a career in the music industry. I believe that everybody should have that right and that opportunity. I really hope that, as we go forward, the music industry continues to support our artists, and that the Government do more to ensure that they put legislation in place to help that.

15:37

[Kevin Brennan (Cardiff West) (Lab)]

I refer to my entry in the Register of Members’ Financial Interests, including my membership of, and support for, the Musicians’ Union and PRS for Music.

I open by sending a message to Michael, as the song says, and pay tribute to the outgoing chief executive of UK Music, Michael Dugher, for the tremendous job he has done during his tenure, not only because of the way in which he communicates with Parliament but because of his personal passion for music—not just for Paul McCartney, incidentally, but all kinds of music—which shines through in everything he does and in the representations he makes on behalf of the music industry. I wish him well. I also pay tribute to Andy Heath, the outgoing chair, who has done a fantastic job with that organisation.

I went out to lunch many years ago with the former chief executive, Feargal Sharkey, when he announced the setting up of UK Music in the first place. It seems to me that, over the course of that decade, the way that the music industry has got its act together and effectively communicated its message is due in no small part to the efforts of people such as Michael, Feargal and Jo Dipple, who have led the UK Music with such distinction over that period of time.

I also pay tribute to everyone who contributed to the debate, particularly my very good friend, my hon. Friend the Member for St Helens North (Conor McGinn), who quite rightly mentioned—as well as lots of other issues that are so important to the debate—the impact of organisations such as Nordoff Robbins and of music therapy. Having myself volunteered for Nordoff Robbins in a care home on one occasion when I was the Minister responsible for charities in the last Labour Government, I can testify to the tremendous work that it does and the impact that its work has. My hon. Friend rightly raised all the significant issues for the debate, and I shall rehearse them a little bit during my remarks and perhaps add one other issue as I go along.

We had a speech from the hon. Member for Somerton and Frome (David Warburton), who chairs with great distinction the all-party parliamentary group on music. I welcome very much what he said about music education. I hope that he presses the Ministers in his own party and Government very hard to deliver much more effectively on music education, after seeing personally the transformational effects of music, in his own life, as a music teacher and rightly highlighted during his speech.

I also pay tribute to my hon. Friend the Member for Stretford and Urmston (Kate Green), whose remarks featured the very important contribution made by our orchestras in particular. I praise the Association of British Orchestras for the work that it does to promote orchestras. My hon. Friend rightly emphasised the importance of formal training and the impact that that has beyond the classical repertoire, in our film and television industries and so on.

I have seen the son of the hon. Member for Henley (John Howell) perform, and he is a very fine jazz musician; and I congratulate the hon. Gentleman—it is obviously in the genes—on his own record as a church organist. He is right about the power of music therapy and the impact on people with, for example, autism.

I would also like to mention my hon. Friend the Member for Cardiff Central (Jo Stevens), my immediate constituency neighbour, and pay tribute to the incredible work that she did, along with other colleagues, on the live music and protecting live music in our city of Cardiff. That was done along with my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), who told us that he had once performed for President Clinton. I think that that is probably a unique distinction, as is the distinction that we heard about from my hon. Friend the Member for Manchester, Withington (Jeff Smith), who told us that he is the only former nightclub DJ who is a Member of Parliament—I have not heard anyone else try to claim that distinction in the course of the debate.

I thank the hon. Member for Glasgow Central (Alison Thewliss) for her contribution. As well as highlighting the incredible amount of music going on in her constituency in this sector, she rightly highlighted the problems for musicians with the Home Office. She was absolutely right to draw attention to that.

We have therefore had a great debate. It was also added to by my hon. Friend the Member for Sheffield, Heeley (Louise Haigh), who mentioned Longpigs. She will know that of course the chair of the Ivors Academy of Music Creators, Crispin Hunt, is a former member of Longpigs. With the Ivors Academy, he is doing great work in promoting the importance of songwriting and the interests of composers.

My new hon. Friend the Member for Pontypridd (Alex Davies-Jones) reminded us why Wales is so well renowned for its contribution to music. I thought that she sounded like the Rev. Eli Jenkins in “Under Milk Wood”, who said, “Thank God we are a musical nation.” My hon. Friend was almost musical in her contribution today.

The main issues that we need to address have been mentioned in the course of the debate. Grassroots music venues were mentioned quite frequently. I welcome what the Government have done about rate relief. Last year, I went with the outgoing chief executive of UK Music to meet the former Chancellor of the Exchequer to urge him to do the very thing that the Government are now pledged to do, so I hope that the Minister will give us a bit of an idea of the timetable for that and how it will be implemented.

Music venues are the R&D of the music industry, and when they are closing down, that is the canary in the mine—to mix metaphors a bit—for the industry. If music venues are closing down, there is trouble ahead for our music industry, so the Government do need to work with the sector, including UK Music, to develop a thorough strategy for the future of our music venues, and I hope that they will do that urgently.

We also heard about freelance employment and the nature of employment in the industry and the campaign of Olga FitzRoy and others in relation to shared parental leave for the self-employed and freelancers. That is a particular issue in the music industry.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Kevin Brennan]

I will not, because of the time, if the hon. Gentleman does not mind.

This issue is extremely important, and I hope that the Minister will press his ministerial colleagues in the Department for Business, Energy and Industrial Strategy to get on with the job that they are doing of reviewing the availability of shared parental leave for freelancers. We found out today from the Office for National Statistics that for the first time ever more than 5 million people in this country are self-employed. That is a huge part of the creative industries in general and the music sector in particular, so I hope that the Minister takes that job on and communicates with Ministers in other Departments to get the job done.

We have heard about the importance of Brexit. That is a massive issue for the music industry, including in relation to the copyright directive and the huge importance that that has for composers and musicians—for the industry. I should mention the work of PRS for Music in this regard and the tremendous work that it does. Some £618 million a year of export revenue is earned just by music publishing, which is an extraordinary statistic.

We have to deal with the issue of organisations, massive corporations, such as YouTube and Google. Google and YouTube will take $5.5 billion-worth of revenue from advertising alone in the US during 2020; and 70% of views on YouTube are of 10% of the content, and I would wager that a lot of that content is music content. Musicians and creators are just not being adequately rewarded in that regard.

The other issue is the musicians’ passport and the importance of freedom of movement. I know that the Minister was a Brexiteer, but it is vital that musicians are able to exercise freedom of movement on our departure from the EU and the end of the implementation period. This is not just about large orchestras or big touring bands, which may or may not have the resources and capacity to absorb that. It is also about the small gigging musician who may have a few fans and followers in Berlin, Italy or wherever, who is on an easyJet flight carrying their own instrument and for whom this is a highly marginal activity but one that could lead to a very major career in music. I hope that the Minister bears that in mind and ensures that the music passport proposal becomes reality and freedom of movement does also.

On music education, I will not labour the points made earlier, but it is extremely important.

I do want to introduce one final new and different issue—the BBC. If the Government are serious about the music industry, they need to think about the undermining of the BBC that seems to be the flavour of the day in Government at the moment. The BBC is hugely important to our music industry. It is hugely important to composers, musicians, orchestras, producers, technicians, mixers, engineers—to all of the music sector. Just look at the behaviour now of some of the big channels—for example, the Discovery Channel—which are trying to buy out music rights in relation to copyright. Undermining the BBC because of petty political issues will damage our music industry, and I urge the Minister to ensure that he makes representations in that regard within Government.

15:47

[The Minister for Sport, Media and Creative Industries (Nigel Adams)]

I congratulate all right hon. and hon. Members on their contributions and, in particular, the hon. Member for St Helens North (Conor McGinn) on bringing this incredibly important debate to Westminster Hall today. The interest shown in the debate is testament to the essential role played by music in our national life. I know that the hon. Gentleman is a keen music fan, he has a stunning voice—so I am led to believe—and he is a Classic FM fan. Ms McDonagh, you may be surprised to learn that the hon. Member for St Helens North is also a Rod Stewart aficionado. That took me by surprise, and no doubt at some point we may hear more about it.

I apologise because, given the time constraints, I might not be able to address all the issues and points raised today, but could I add my voice to those who have congratulated the outgoing chief executive of UK Music, Michael Dugher, who has done an incredible job for the sector in his time there? We wish him well in his new career, where I am sure he will also do an incredible job. We also congratulate Andy Heath, the outgoing chairman, who has a fantastic reputation within the industry and has also done a fantastic job stewarding the excellent organisation that is UK Music.

I will also quickly mention and congratulate Billy Ocean, who is 70 today—would you believe it? And of course we cannot forget Baby Spice, Emma Bunton, who has her 44th birthday today. I cannot believe that, either.

I will respond to some of the points raised in the debate, not least the point that the contribution of the music industry is not just economic. There is a huge body of evidence pointing to music’s positive impact on wellbeing, skills and employment, and in the reduction of anti-social behaviour and crime. It is not just about the money. We are supporting initiatives such as the National Academy for Social Prescribing, which the hon. Member for Stretford and Urmston (Kate Green) mentioned, to enable GPs and other healthcare professionals to refer people to a range of local non-clinical services.

The hon. Member for St Helens North mentioned tax reliefs, which have been successful in the film sector. As set out in our response to the Digital, Culture, Media and Sport Committee’s live music inquiry last year, creative sector tax loops are kept under review to ensure their ongoing effectiveness. I have spoken with music industry representatives and I am happy to receive any evidence-based proposals for a tax relief for the sector.

The hon. Gentleman also talked about the music export growth scheme, which has been incredibly successful. Music is an extraordinary export for the UK because of its economic value and, as everyone will know, the soft power influence it has around the world. The MEG scheme has been helpful in ensuring bands and artists such as Wolf Alice can be promoted and travel overseas. I recently met the Minister for Investment and spoke to him about the importance of these schemes. We look forward to working in partnership with his Department and the music industry, to ensure that talent can access key overseas markets.

The hon. Gentleman also mentioned copyright, as did the hon. Member for Perth and North Perthshire (Pete Wishart). We support the overall aims of the copyright directive, but our imminent departure from the EU means that we are not required to implement it in full. It is imperative that we do everything possible to protect our brilliant creators, as well as the rights of consumers and users of music. I look forward to working with the music industry to ensure we achieve that and, as I have said on many occasions, I will work to ensure that we stop the exploitation of our artists here in the UK.

[Alex Chalk (Cheltenham) (Con)]

The Cheltenham Festival of Performing Arts provides fantastic opportunities for young people to develop their skills and build their confidence, but organisers have indicated that the Education (Pupil Registration) (England) Regulations 2006 place onerous requirements on licensing each individual before they can perform. Will the Minister meet me to discuss how we can have a proportionate system, to ensure that such fantastic festivals are not put at risk through bureaucracy?

[Nigel Adams]

I certainly will. In fact, I will come to my hon. Friend’s constituency to discuss that important issue. If we can time that with another major sporting event in his constituency, that will go down well.

My hon. Friend the Member for Somerton and Frome (David Warburton), who represents Glastonbury and chairs the all-party parliamentary group on music, mentioned access to music in state schools, which is imperative. We are committed to ensuring all children have a broad and balanced curriculum, and the arts are a key part of that. We are revising the national plan for music education and, as part of that work, developing a model music curriculum created by an independent panel of experts.

My hon. Friend the Member for Henley (John Howell), an accomplished organist and clarinettist, also talked about music education, and we absolutely recognise its importance. I am sure he will welcome the recent announcements that reflect our ambitions on that, including £80 million for music education hubs on top of the £300 million allocated between 2016 and 2020.

The hon. Member for Cardiff Central (Jo Stevens) also referred to live music acts. We do not believe it is necessary to undertake post-legislative scrutiny of the Live Music Act 2012 at this stage. It was introduced to deregulate some of the requirements of the Licensing Act 2003, to help grassroots venues. Full scrutiny was undertaken in 2017 to inform the Government response to the report of the House of Lords Select Committee on the Licensing Act 2003. It was concluded that that was working broadly as intended.

Many hon. Members rightly mentioned our exit from the EU and visas for touring musicians, particularly the hon. Member for Cardiff South and Penarth (Stephen Doughty), who—we have such a wealth of talent—is an accomplished artist. Touring is the lifeblood of the industry and we recognise the importance of the continued ease of movement of musicians, equipment and merchandise once we have left the EU. Visa rules for artists performing in the EU will not change until the implementation period ends in December 2020. They are being considered, and we welcome the views of all hon. Members and the industry on movement within Europe. It is essential that free movement is protected for artists post 2020.

Nearly everyone mentioned music venues, including the hon. Member for Sheffield, Heeley (Louise Haigh). She has a stunning singing voice. I was quite surprised and impressed at how great the Opposition Members’ singing voices are. That is great news and I look forward to hearing more of it. The hon. Member for Pontypridd (Alex Davies-Jones) gave her first performance here in Westminster Hall, which was as impressive as the voices of the choir at the Millennium Stadium—I have had the pleasure of listening—which certainly intimidates opposition teams.

The hon. Member for Manchester, Withington (Jeff Smith), a former DJ, was right to mention dance music. He mentioned grassroots music venues, as did the hon. Member for Glasgow Central (Alison Thewliss). We believe those spaces must be allowed to prosper, so we have taken a number of measures that have been mentioned to support this important sector, including the introduction of the Live Music Act 2012 and the agent of change principles. The Arts Council put in a fund of £1.5 million to support grassroots venues. In our manifesto we committed to changes in business rates for music venues. I look forward to receiving more detail on that further support for music venues soon.

The hon. Member for Perth and North Perthshire was right to raise the issue of diversity. Again, he is a man with no small history in the music sector, having sold 2 million albums with Runrig—and 17 with MP4. We believe that equal access to music opportunities should be available to all. The Creative Industries Council recently published its diversity charter, which commits the industry to act to create a more diverse workforce.

The hon. Member for Cardiff West (Kevin Brennan) rightly mentioned shared parental leave. We are not ruling out further support for self-employed parents and the evaluation of shared parental leave is ongoing. We will report on that and publish the Government response to the consultation in due course.

To conclude, this Government are committed to continuing to support the fantastic UK music industry at home and abroad. I recognise the need to consider introducing a comprehensive music strategy. We want our music industry to continue to be the envy of the world.

15:58

[Conor McGinn]

I thank the Minister for his comprehensive response, given the short time available to him. I also thank the shadow Minister. I concur entirely with his comments about the BBC. People such as James Stirling have put music front and centre of the BBC, across all its platforms, which is critical to the success of British music.

This has been a good debate. The number of contributions and the content of our discussion suggest that there might be appetite for a Backbench Business debate on the Floor of the House. We might look to do that later in the year. The report that provoked this debate said, rightly, that music is about numbers, lyrics, notes and sounds, but fundamentally music is about life. I cannot remember the first time I heard music, but neither can I remember a time when it was not ringing in my ears.

The first record bought for me by my aunt was by Dexy’s Midnight Runners—I am sure you can guess what her name was! My first concert was Oasis at the old Wembley Stadium. I remember when I first heard Seán Ó Riada’s Ceol an Aifrinn—the mass entirely in Irish—and the first dance at my wedding was to Stevie Wonder’s “Signed, Sealed, Delivered I’m Yours”. Talking to my five-year-old son about the Beatles, I pointed out to him where the Hippodrome was in Earlestown, where he is growing up, and said, “They played there.” I owe music a lot and, with my colleagues here, I will do my best to keep paying it back.

Question put and agreed to.

Resolved,

That this House has considered the contribution of music to the economy and society.

Motorhomes and Vehicle Excise Duty

Tuesday 21st January 2020 Westminster Hall

[Sir David Amess in the Chair]

15:59

[Ruth Jones (Newport West) (Lab)]

I beg to move,

That this House has considered motorhomes and vehicle excise duty.

It is a pleasure to serve under your chairmanship today, Sir David. It is good to see you in the Chair for this debate, because I know that this is an issue that you have raised at the highest levels of Government and that you take it very seriously indeed. As you cannot contribute to the debate this afternoon, I will speak for both of us in saying that this issue is serious and real, and that we will keep raising it until the Government take the necessary action. We are not prepared to let the motorhome industry collapse because of Government miscalculation.

I thank the National Caravan Council for bringing this matter to the attention of Parliament, and I am very grateful to have secured this important debate today. The impact of vehicle excise duty on motorhomes and campervans is a niche topic but an important one. The industry and many motorhome users are calling for motorhomes to be removed from the car vehicle excise duty regime, and for motorhomes to be taxed as private light goods vehicles or private heavy goods vehicles, until they can be added to the forthcoming graduated vehicle excise duty regime for commercial vans, from which they are originally derived.

The calls for action are more obvious than many may think. After all, a motorhome is not a car, as motorhomes are designed to perform a function other than general transport of people or goods. They are derived from the chassis of a heavy commercial vehicle, such as a van or a truck, and they have large engines, so motorhomes should not be taxed as cars, when they are clearly not built to be cars or used as such.

So I am pleased to have the opportunity to raise this issue today and it is good that the Exchequer Secretary to the Treasury, the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), is here to listen to the arguments, understand the concerns and—hopefully—update the House on what measures the Treasury will take to ensure that this anomaly can be addressed and solved at the earliest opportunity that the Government can find.

To be clear, I am calling for a fair approach when it comes to the taxation of motorhomes and campervans. This is a cross-party call for action, both politically and geographically.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

In my area, Swift Caravans has already announced redundancies and I am aware that other companies are currently consulting on making more people redundant. There is huge cross-party support on this issue, as shown by the event that we held in October, the joint letter that we sent to the Minister and the event that we will hold in February. Given that cross-party support and the impact on the industry, does my hon. Friend agree that the Government need to take action now?

[Ruth Jones]

Obviously I agree, and I thank my hon. Friend for intervening to make a powerful point. Yes, there is cross-party support, and she has highlighted both what has been done so far and what we will do in the future. I know that many right hon. and hon. Members who could not be here in Westminster Hall today also support this call for action.

The vehicle excise duty payable for new-generation motorhomes and campervans first registered after 1 September 2019 increased from £265 per year, going up to £2,135 in the first year; it will then be £465 a year for the next five years. That is a huge increase in costs for those people who choose to buy a motorhome and who enjoy using it, and I hope that the Government will reflect on the impact of this massive rise.

The increase in the level of taxation has been applied to all motorhome vehicles, including those fitted with new-generation greener and more energy-efficient engines. If the Government are serious about their climate change targets, why are they not treating light commercial vehicles as cars for the purposes of taxation? Instead of generating an additional £28 million—approximately—from the relatively small number of new-generation motorhomes, they could generate almost £700 million from vans alone.

Let me be clear that that projected £28 million will be raised only if motorhomes continue to sell at rates similar to those in the past. However, I have been informed by the industry that, as my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) has already mentioned, registration rates are declining rapidly because of this tax.

[Holly Lynch (Halifax) (Lab)]

I am eternally grateful to my hon. Friend for securing this debate and for the powerful speech that she is making. Further to the point that she has just made, I will point out that businesses such as Richard Baldwin Motorhomes, which is located in my constituency, Bentley’s Caravan and Motorhome Services, and Caravan Guard and Leisuredays, which is an insurance company that specialises in providing insurance cover for motorhomes, directly employ 60 people in my constituency. Those companies are saying, as my hon. Friend has just said, that such jobs will be at risk if we cannot find the fair approach that she is calling for.

[Ruth Jones]

Absolutely—I thank my hon. Friend for making another powerful point. Jobs in this industry are being lost. That is not right and we must do everything we can to protect those jobs.

Ministers repeatedly refer to the importance of incentivising drivers and vehicle owners to choose low-emission alternatives. However, if someone wants to buy a new motorhome, or if someone wants to manufacture one, there are no alternative engines. So, where is the incentive? There is not one, which is why it is so wrong that motorhome owners are being disadvantaged by having their vehicles taxed as if they were cars. Motorhomes are not cars.

It is important that we regulate emissions and do what we can to preserve our environment, and it is right that owners of new vehicles are encouraged to choose cleaner and more efficient engines. Indeed, the car and light commercial van industries have been consulted on the impact of the worldwide harmonised light vehicle test procedure and the implementation dates have been delayed. It is regrettable that the motorhome industry has had no such assistance from the Government.

We must also remember that, unlike cars and light commercial vehicles, motorhomes are the smallest group of vehicles, travelling just 3,000 miles per annum on average and contributing just 0.22% of all emissions. The Government should encourage people to stay here in the UK and holiday at home. I know from my many staycations in Wales that there are some wonderful beaches, and places for people to rest and enjoy themselves, so that they can spend their money within the UK.

[Peter Aldous (Waveney) (Con)]

The hon. Lady is making a very powerful speech. Does she agree that there are clear parallels between this tax and the aborted static caravan tax in 2012, with disproportionate impacts on those areas where these vehicles are manufactured and indeed on the holiday areas that she has just talked about?

[Ruth Jones]

Absolutely, and the hon. Gentleman makes that point very clearly. I will come on to the importance of staycations in this country now.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Lady agree that because motorhomes are used on average for only 31 days each year, a tax of £70 a day is not likely to produce the kind of result that she is talking about?

[Ruth Jones]

Absolutely, and the right hon. Gentleman must have read my speech because I will come on to that very point later.

What happens to staycationing locations across the UK that will lose income and tax revenue because of these proposals? Have the Government completed any studies on this issue? What do they propose to do for people who lose their jobs in the tourism sector because of this arrangement?

We know that staycations stop people from getting on planes, which damage our air, or taking cruises, which damage our marine ecosystems and pollute our waters. So, by holidaying at home, we see lower levels of greenhouse gas emissions and thus less pressure is put on our environment.

The increase in taxation is already having a significant impact on the staycation industry. Unlike the car industry, the motorhome sector saw modest growth year on year up to September 2019, when it recorded a fall of over 7%. That was the very month that the increase came into effect.

I would like the Minister to explain why the Government are penalising 15,000 motorhome-owners, who all contribute to our domestic tourism industry and only use their motorhomes for leisure purposes for about 30-odd days a year, as we have already heard. The policy cannot be about reducing air pollution levels, because if it was, the Government would have a more thought-through and logical approach.

[Gillian Keegan (Chichester) (Con)]

The hon. Lady is making an excellent speech, and I agree with her. There is a disparity between motorhomes, which on average do about 3,000 miles a year, and light vehicles and vans, which do 12,800 miles a year on average with exactly the same carbon dioxide emissions per mile. Does she agree that if we are trying to tackle climate change, motorhomes are not the area on which to focus?

[Ruth Jones]

I agree with the hon. Member entirely. She has made a powerful point.

I want us to think about the people we are talking about. There are people across the UK who use motorhomes and there are manufacturers, as we have already heard, in Hull and other areas. Many committed holidaymakers are using their vehicles to holiday at home in the UK. Those UK-based holidays are a much-needed boost to our regional economies and our coastal and rural communities. Indeed, motorhome and caravan owners make a key contribution of some £9.3 billion every year to the tourism industry and the economy, according to recent UK Caravan and Camping Alliance impact reports.

The days and months ahead as we leave the European Union remain uncertain and a little unclear. We do not know what economic winds may sweep us up or what global shocks may hit us, so the Government must focus on all measures to make life easier and our economy stronger—not weaker. One way to do that would be to tackle the problems associated with the vehicle excise duty for motorhomes. Let us think about the people who will be affected. There are almost a quarter of a million motorhome owners in the UK today. According to figures from the NCC, 81% are over 55 years old, and more than 50% are retired.

Motorhome and campervan purchasers are often older people who have saved for much of their lives to purchase these leisure vehicles. I do not think the Government want to be accused of making such lifestyle choices unattainable or of taking away the means for ordinary people to enjoy such holidays.

[Mr Richard Holden (North West Durham) (Con)]

I have Elddis, a manufacturer of caravans, and Weardale, an area where many motorhome users go, in my constituency. Does the hon. Lady agree that this policy could have unintended consequences for the environment in terms of more CO₂ emissions from foreign travel and for the Government through a hit on taxation with VAT and other duties when money is not spent in the UK?

[Ruth Jones]

I thank the hon. Gentleman for making that succinct and clear point. He does it so much better than I could. Why are we penalising those who will not see their incomes grow or those who have stable incomes and have planned accordingly for their futures? They are entitled to holidays, and the Government should not make it difficult for them. I note that my hon. Friends the Members for Kingston upon Hull West and Hessle (Emma Hardy) and for Kingston upon Hull East (Karl Turner) take that point seriously and have made it over recent months. We now have a Government with a solid majority who are looking to their first post-election Budget. I am sure the Chancellor is busy across the road as we approach 11 March, but I remind the Government that they have no more excuses for inaction. They have a clear majority in this House, so they can act if they want to.

[Craig Mackinlay (South Thanet) (Con)]

I thank the hon. Lady for securing this powerful and important debate. She has made the point that it is often elderly, retired people who enjoy such vehicles, but quite a big lump of younger families also enjoy motorhomes. The clear point is surely that these are not vehicles for personal transport, but leisure vehicles. Has she ever seen such a vehicle in a supermarket car park? I never have.

[Ruth Jones]

The hon. Gentleman makes a powerful point. As I said earlier, these vehicles are not designed to be used as cars because they are not used to transport goods and people as cars are. He is quite correct in that.

I urge the Minister to listen to the industry, to Members from all parts of the House and to the thousands who enjoy using their motorhomes, and to get this mess sorted out.

[Mr David Davis (Haltemprice and Howden) (Con)]

rose—

[Sir David Amess (in the Chair)]

Order. I call the Minister.

16:14

[The Exchequer Secretary to the Treasury (Mr Simon Clarke)]

It is a pleasure to serve under your chairmanship, Sir David. I am grateful to the hon. Member for Newport West (Ruth Jones) for bringing this topic to the House today. I am grateful to all Members who have taken the time to attend and intervene and who have taken the chance to stand up for their constituents. This debate makes it clear that while motorhomes may make up only a small proportion of the vehicle fleet on our roads, they play an important role.

[Sir David Amess (in the Chair)]

Order. I sense that there is some confusion about this debate. It is a half-hour debate. The sponsor of the motion speaks and then the Minister replies. It is for other Members to intervene. Unless permission is obtained, the debate is not for other Members to make separate speeches. There are still many Members here who have attended because they are interested in the matter, but it is simply that they can make interventions.

[Mr Clarke]

I will of course be happy to take such interventions if colleagues wish to make them. I may regret saying that in a moment, but I will take the chance for now.

As I was saying a moment ago, we recognise the importance of this sector for our tourism economy and that it supports thousands of skilled jobs right across the United Kingdom and, indeed, in certain clusters. Yorkshire is obviously one of those.

To recap the situation, the Government use the vehicle excise duty system to encourage the take-up of vehicles with low CO₂ emissions to help meet our legally binding climate change targets. The new VED regulations were introduced in September to aid that, as motorhomes with higher emissions are liable to higher rates of VED than those with lower emissions. After all, transport is the largest sector for UK greenhouse gas emissions, accounting for some 27% of the total. Road transport makes up more than 90% of that.

[Emma Hardy]

Does the Minister not accept that the Government are taxing new motorhomes, which have a greener engine, at a higher rate, while allowing older motorhomes, which have a dirtier engine, to continue on the lower rate? It is completely illogical.

[Mr Clarke]

We clearly have to start the new system somewhere. I take the hon. Lady’s point, but I would argue that if we retrospectively hiked tax on existing vehicles, we would face a backlash. The policy is about trying to influence choices at the point of purchase.

The hon. Lady for Newport West said that the options are not available. Clearly we want to incentivise manufacturers to come up with new options, and it is worth pointing out that the stats that I have show a difference of more than £1,000 in first-year VED liabilities between the most polluting 5% of new motorhomes and the bottom quarter. We are trying to encourage people to make rational choices and buy less polluting and therefore less expensive vehicles.

[Jason McCartney (Colne Valley) (Con)]

I thank the Minister for giving way. A local converter company has told me that the range of low-emission options just is not there at the moment. It has already not replaced five workers who have moved on because sales have dropped. The policy is bad for converters and bad for British business, and it is bad for the environment, because it is staycations that we are damaging. Holme Valley Camping in my patch has also lobbied me, because bookings are starting to be affected by the policy as well. Please will the Minister look at it again.

[Mr Clarke]

That is a typically passionate intervention from my hon. Friend. I take his points to heart, and the Government are listening. Clearly in this context, we can only make announcements at fiscal events. It is important to note that we are hearing the strong messages that people are sending out.

[Mr David Davis]

The Minister has my sympathy. I have a sense of déjà vu from the omnishambles Budget, when the last attempt was made to attack pasties and caravans. At the time, I spoke to a predecessor in his post. I said, “You will lose taxes as a result of the impact on jobs, trade and so on.” He said, “Well, we don’t do calculations that way in the Treasury”, to which my response was, “You ought to.” This policy is masquerading as a green policy. It is destroying jobs in my constituency in Haltemprice already. It is hurting the poorest in our society in terms of their natural holidays travelling around the country. As we have heard, it is replacing staycations with trips to Cyprus and so on, which will use more in one trip than these vehicles use in one year. I look forward not to the Minister solving the issue today—I know that that is not within his reach—but to it being solved in the Budget.

[Mr Clarke]

I thank my right hon. Friend for his remarks. Everyone who bears the scars of taking on him and his colleagues in the context of the 2012 Budget changes will well remember that. The Government are certainly resolute that it is sensible to have a system in place that discriminates on the basis of emissions. How we calibrate that, and the way in which we operate the system, is kept under constant review. It is worth, in that context, pointing out that the current VED system applies to all light passenger vehicles, not just motorhomes, with a recorded CO₂ figure registered from 1 April 2017. That includes all vehicles that fall within the category M1.

I imagine that all Members spend their time reading up on category M1, which covers those vehicles defined as designed and constructed for the carriage of passengers and comprising eight seats or less, in addition to the driver’s seat. In addition, regulations relating to the worldwide harmonised light vehicle test procedure include a requirement for any multi-stage build vehicle, including motorhomes, to record their CO₂ emissions and fuel consumption on their type approval certificate.

[Martin Vickers (Cleethorpes) (Con)]

The Minister has just quoted, word for word, what he said about those regulations when he wrote to me on 12 August. He may recall that I made representations to him on behalf of Auto-Trail, a business that operates on the border of Cleethorpes and the constituency of my hon. Friend the Member for Great Grimsby (Lia Nici). Auto-Trail forecasts that job losses will occur. The Minister concluded that letter by saying that he recognised the concerns. Will he recognise them even more after today? Otherwise, as other Members have said, there will be another omnishambles.

[Mr Clarke]

I thank my hon. Friend for his remarks. He, like many others, has been assiduous in drawing attention to companies in his constituency that stand to be affected. Clearly, we planned to have a fiscal event in the autumn. Events supervened, and I am very glad that they did, but the March Budget gives us the opportunity to assess the tax, as we do all taxes, in the round.

To defend the Government’s record on this matter, we were explicit that motorhomes with a CO₂ figure would be part of the graduated VED system introduced in 2017, and my officials are in constant dialogue with the automotive sector. I have held productive talks with the National Caravan Council, accompanied by you, Sir David. Talk about having a partial Chair.

[Mr Davis]

He is a total Chair, not a partial one.

[Mr Clarke]

Indeed. The NCC is a passionate champion for its sector, and I look forward to further conversations.

[Emma Hardy]

I thank the Minister for giving way again; he is being very generous. Is it not right to say that when the tax was devised, he did not meet with the motorhome or campervan industries to talk about how it would affect them specifically?

[Mr Clarke]

To the hon. Lady’s point, I was not the responsible Minister at that point. In fact, I think I was not even a Member of Parliament at that point. I genuinely cannot speak to whether those conversations were held, but we are now engaged in dialogue. I have met with representatives of the industry since being appointed. Anyone who is present for today’s debate can see the strength of feeling that exists across the House.

The structure of reformed VED is designed to encourage drivers to make the lower emissions choices that we all want to see. However, the high rate reduces significantly in subsequent years, which means that the VED liabilities in year one are not reflective of the total VED liabilities for a vehicle over its lifetime. The VED charge also remains a relatively small proportion of the purchase cost—these are, after all, expensive vehicles—typically between 1% and 5%. It is therefore a comparatively small charge, albeit that marginal costs obviously add up.

[Sammy Wilson]

Does the Minister accept that it is not the percentage of the purchase cost that is important but the running costs per year? If a vehicle is being used on the road an average of 3,000 miles a year, a duty of more than £2,000—nearly 60p or 70p a mile—is a substantial increase in its running costs.

[Mr Clarke]

The right hon. Gentleman raised the issue with me in the House at Treasury questions. He is obviously very committed to ensuring that we look at it again. Of course, VED is a one-off expense that is paid at the point of purchase; it does not accrue to the running costs per se. The way in which we tax that is through fuel duty. If someone drives more miles, they will pay more fuel duty. That is the real correlation and link. However, I recognise that, if people do not use the vehicles a great deal during the course of any given year, VED represents a substantial one-off cost in the first year of operation.

[Mr Davis]

I thank the Minister for being so generous in giving way. On that exact point, perhaps the best thing to compare, if he wants to look at more than one-off costs, is the first six years, which can be reasonably compared. A light commercial vehicle doing 8,000 miles a year will have to meet £3,325; for a motorhome doing 3,000 miles a year, it is £4,460. It is a ridiculous comparison.

[Mr Clarke]

We are trying to standardise the way in which we deal with VED. There is a particular grievance at the moment that it applies to motorhomes but not to vans, for example, as the hon. Member for Newport West mentioned. In the 2018 Budget, the Government confirmed that vans would move to a CO₂-based emissions system, which will apply from April 2021. At that point we will have at least ended the imbalance between the treatment of one sector and another. Clearly, we need to look very closely at how we move forward, in order to ensure that the operation of VED does not penalise people who use such vehicles relatively infrequently. I understand the distinction between vehicles that are on the road every day or every week and those that may be on the road for only a month or two in any given year.

[Craig Mackinlay]

I thank the Minister for being generous. The heart of the nonsense is that the Euro 6 engines, which many of these vehicles will now have, are low on particulates. Let us put CO₂ aside; particulates are what are important with diesel engines. We are actually encouraging the continued use on the road of older vehicles to the detriment of new ones that are, in the round, better for the environment. We are creating the opposite of what we are trying to achieve.

[Mr Clarke]

I thank my hon. Friend for that remark. Reducing particulates is a major aspect of Government policy in terms of air quality as well. It is not solely a question of CO₂. As I remarked in relation to a question from the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), we are trying to address the matter in a way that does not lead to retrospective taxation of people who have already invested in a vehicle. However, I recognise the point that, were we to create a situation in which it was unviable to buy new vehicles, we would effectively lock them in in perpetuity.

I close by emphasising that we really are listening to the remarks of hon. Friends and Members across the House. We understand the centrality of the sector to jobs and the tourism industry, and the pleasure that people derive from going away in caravans and motorhomes. The Government reformed VED because we believe that tax rates should reflect environmental impact. Although ultra-low or zero-emissions motorhomes may not yet be available, the Government are seeking to incentivise new motorhome purchasers to make the most rational low-emission choices that they can. However, like all taxes, VED remains under review. Any tax changes are considered and announced by the Chancellor as part of the Budget process. As all Members know, the Budget will be on 11 March. Thank you very much, Sir David, and thank you to everyone who contributed.

Question put and agreed to.

Surrogacy: Government Policy

Tuesday 21st January 2020 Westminster Hall

16:19

[Andrew Percy (Brigg and Goole) (Con)]

I beg to move,

That this House has considered Government policy on surrogacy.

It is a pleasure to serve under your chairmanship, Sir David, and a delight to see my current favourite Minister and favourite shadow Minister in their places. Having flannelled them, I am sure that the debate will receive a very successful response.

Surrogacy is an issue that I came to by accident, having watched a documentary about people who were going overseas to partake in surrogacy arrangements, and some of the problems that that was causing, particularly when it came to the welfare of some of the surrogates. From that, I started to look at the issue of surrogacy in the UK a little more closely. Having become more interested in the subject, it quickly became clear that there is urgent need in this country for reform of surrogacy law. There is also an urgent need for Government to understand and appreciate the important role that surrogacy plays in creating families in this country, whether those families are heterosexual couples, same-sex couples, or single people who wish to create a family. It is a legitimate, valued and socially acceptable means of family building.

Apart from investigating the situation of surrogacy overseas, the only other thing I remember about surrogacy is the debate in the 1980s, when I was a kid growing up. That was when the legislation on which UK surrogacy is presently based came into being, in response to some of the stories and concerns about surrogacy at the time. The debate in the 1980s was very different from the debate we have now. We now understand that surrogacy in this country works, and that it is a legitimate and loving way in which families are created. I thank the previous Minister, my hon. Friend the Member for Thurrock (Jackie Doyle-Price), who is in the Chamber today. She was, I think, the first British Minister to publicly state in the House of Commons the positive role that surrogacy plays in this country. Although I do not wish to embarrass her, I will repeat what she said in July 2018 when she was a Minister in the Department of Health and Social Care:

“Surrogacy has an increasingly important role to play in our society, helping to create much-wanted new families for a range of people. The UK Government recognise the value of this in the 21st century where family structures, attitudes and lifestyles are much more diverse.”—[Official Report, 19 July 2018; Vol. 645, c. 38W.]

We could not disagree with a single word of that, and we thank her on behalf of the whole surrogacy community for the positive way in which she embraced surrogacy.

We in the surrogacy community also thank my hon. Friend for the guidance that was issued by her Department during her time as Minister, including “Care in Surrogacy”, which was guidance that the Department of Health and Social Care issued to healthcare providers across the country. It had the same simple aims that all of us in the surrogacy community want to achieve: to normalise surrogacy among healthcare professionals, and to avoid the embarrassments that sometimes occur when healthcare professionals do not understand how these arrangements are come to and just how normal they are. In the past, there have been car park handovers of children because healthcare professionals on maternity wards and in hospitals have not known how the legislation and these arrangements work. We all want to avoid those situations, so I thank my hon. Friend for that guidance, which was updated at the end of November last year. I also thank my hon. Friend for addling the brass, as we say in Yorkshire, to ensure that the Law Commissions’ review into the current legislation—a joint review by the Scottish Law Commission and the Law Commission for England and Wales—was a root and branch review. We are very grateful for that.

I also want to say a big “thank you” to the Surrogacy UK working group on surrogacy law reform, which has done a brilliant job. Some of that group’s members are here today, although of course I am not allowed to refer to people in the Gallery. Particular thanks must go to my constituent, Sarah Jones, who serves as the chair of Surrogacy UK. When I got interested in this topic, I did not realise that one of my constituents was chair of Surrogacy UK; it was quite by accident. A big “thank you” is also due to Natalie Smith, and to Dr Kirsty Horsey from Kent University, who led and chaired the review working party within Surrogacy UK. We are really grateful that the funding is in place, and that this review has now happened. It is a three-year project which, if memory serves, we are about half way through.

Surrogacy in the UK has been regulated since 1985 by the Surrogacy Arrangements Act 1985, which came out of the 1984 Warnock committee report. That Act contains a number of provisions that make advertising for, or as, a surrogate illegal, criminalise for-profit surrogacy and render all surrogacy arrangements as they stand unenforceable in law. Since 1985, there has been plenty of legislation to change some of that Act’s provisions. The Human Fertilisation and Embryology Act 1990 established that in all forms of assisted reproduction, a woman who gives birth, and no other woman, is the legal mother at birth. The legal problem with the situation now is that a surrogate who is carrying a child who has no genetic link to them is, in law, the mother at birth, whereas the intended parents, who may have a 100% genetic connection to that child, are not.

The 1990 Act also determines that the partner of the surrogate is the legal father, even though he may have had absolutely no part in the surrogacy arrangements. That is why parental orders are being created that enable legal parenthood to be transferred after birth as long as certain conditions are met. However, that takes six to nine months at best, and in many cases takes much longer.

Surrogacy legislation has evolved and changed over time. Not so long ago, a remedial order was passed by Parliament in response to a human rights court case. That order now enables single individuals to take part in surrogacy, something that was previously outlawed. The key problem with the legislation, as I have highlighted, is the issue of parent orders. Despite the fact that surrogates, intended parents, and everybody involved in these arrangements have only one interest at heart, that of the child, the current legal situation sometimes works against the interest of the child. It is very rare in a surrogacy arrangement for the relationship between the surrogate and the intended parent to break down, but the current law means that if that does happen, a surrogate who, at birth, is the legal parent can prevent legal parenthood from ever transferring, even though the children could have no genetic relationship to the surrogate.

The relationship breaks down only in a very small number of cases. Most surrogates go into this for entirely altruistic reasons, and the relationships between the surrogate, the parents and the child are normally very strong and often life-enduring. However, when such a breakdown happens, as in the well-known case of Re AB (Surrogacy: Consent), it can result in legal parenthood never being transferred, resulting in a situation where the parent in law will always be different to the parents in reality. That is not in the best interest of the child, which is why we in the surrogacy community welcome the Law Commissions’ proposals on this issue. By outlawing the enforceability of surrogacy arrangements, the current situation is one in which people want to properly formalise an arrangement, but cannot then rely on that arrangement later on in law.

Most of us involved in the surrogacy debate would say that what does work in the current UK legislation is the principle of altruism.

[Jim Shannon (Strangford) (DUP)]

This is a complex issue, and the hon. Gentleman is setting the scene very well. However, does he agree that in all these things, sensitivity must be key? Does he also agree that we perhaps need to look to our neighbours across the pond in the United States of America, for instance, where large numbers of surrogacies are carried out, to see how their policies and guidelines have made the process safe for parents and surrogates alike?

[Andrew Percy]

I thank my hon. Friend for that intervention, and will come on to the issue of surrogacy arrangements in the United States. Nobody would question that surrogacy arrangements in that country operate in the best interest of the child, but they operate on a wholly different basis to surrogacy arrangements in the UK: they operate on a commercial basis, which many of us would not want to see here. It is fair to say that in this country, surrogacy arrangements work. There is no doubt that the welfare of the child is at the heart of surrogacy arrangements, and at the heart of the courts in this country. However, as the debate progresses, we can of course take examples of best practice from other jurisdictions, whether through legally enforceable surrogacy arrangements or whatever else.

[Kirsten Oswald (East Renfrewshire) (SNP)]

Does the hon. Gentleman share my view that it is important to focus on the altruistic nature of surrogacy as we go forward in this debate, and make sure that the welfare of the children concerned is not adversely impacted by an overly commercial focus?

[Andrew Percy]

I entirely agree. I will say more later, but there is a debate in the surrogacy community about the nature of payments and whether its basis should be altruistic or commercial. Throughout the process, the view of the all-party parliamentary group on surrogacy, which I formed with other hon. Members, has been that we must maintain the altruistic basis of surrogacy in the UK. There are others in the community who take a different view; I will say more about that in a moment.

The all-party parliamentary group undertook a number of hearings in response to the Law Commissions’ proposals. The principal purpose of the debate is to explain where we agree with them and where we do not, and I thank the Law Commissions for the way they have engaged with us. They have been proactive and positive in coming to APPG meetings and some of the hearings, and they have been open throughout the process. That view is shared by everybody across the surrogacy community.

We took evidence from a number of interested parties. We heard from surrogates, intended parents, parents who have created their families through surrogacy, and the legal community. We even took evidence from Tom Daley who, with his partner, chose to undertake their surrogacy arrangement in the UK, not in the United States, precisely because there are some big reasons why the US is not as attractive a jurisdiction—although it is perfectly safe—for such arrangements. Those sessions were really interesting and valuable. In response to the Law Commissions’ initial consultation, we have some clear views on what we would like to see.

[Jim Shannon]

There is something at the back of my mind, which I want to put on the record and get the hon. Gentleman’s thoughts on. With the rise of celebrities openly discussing their surrogacy journeys—he has mentioned one—does he agree that we need a clearly defined strategy to address the rise in the number of surrogacies and the complexity of the issue, which is difficult for people to understand without clear guidelines?

[Andrew Percy]

It is absolutely the case that we need updated legislation. We welcome the arrangement of Tom Daley and his partner, Dustin Lance Black—I have just remembered his name; I am not very good at remembering actors’ names—because they are two loving parents who have created a loving family. They are a good example, because they demonstrate better than anyone, or as well as anyone, how loving families can be created in a range of ways—through surrogacy, IVF, adoption or marriage—in the UK in 2020.

Dustin Lance Black also undertook an interesting set of radio programmes, one of which, following surrogacy arrangements in the US, explained why they chose the UK and felt that the system here was better. The hon. Member for Strangford (Jim Shannon) is spot on, however, that we need a well-regulated and updated framework for surrogacy in the United Kingdom.

We as an all-party parliamentary group are positive and pleased by the Law Commissions’ proposals. We recognise how progressive many of them are, and that they balance most of the concerns about safeguards, ethical surrogacy and the welfare of children—of course—that were raised by stakeholders throughout the process. We also welcome the fact that, unlike in previous reports, the lived experience is front and centre of all the proposals. We believe that the commissions have engaged positively with the whole surrogacy community and interested parties.

Where do we agree? As I said, we are happy that a full root and branch review is taking place. We are also pleased that there is no move towards allowing the commercial surrogacy that we see in the United States, because it would then become the preserve of the wealthy. That is not the case with the altruistic nature of the current system, although it is not without expense or challenge. We have a situation in the United States where some families are now going out of the United States to undertake surrogacy because they cannot afford it there.

[Kirsten Oswald]

Everything that the hon. Gentleman has said builds up to the suggestion that it would be important to have clear guidance on what is meant by things such as “reasonable expenses”, and to balance that by ensuring that the regulation put in place is effective, efficient and fit for the intended purpose.

[Andrew Percy]

Absolutely; I could not agree more. That is exactly what we are calling for in the draft legislation, on which we hope we will receive support from both Front-Bench spokespeople. Although we want to avoid the commercial arrangements that exist elsewhere, we want a consultative focus on what payments should be considered legitimate in that surrogacy arrangement. In fairness, the Law Commissions’ consultation puts some of those things into broad categories of what may or may not be considered appropriate.

We also welcome the potential relaxation around advertising for or as a surrogate, and the proposal to divorce the issue of payments and costs from that of legal parenthood, so they are not tied together in the court system. When it comes to legal parenthood, the court system should be dealing only with what is in the best interests of the child.

In the survey undertaken by the Surrogacy UK working group on legal reform, 82.3% of surrogates surveyed thought that legal parenthood should be determined at or before birth. People who go through surrogacy want to create families for other people; they do not want to be the legal parent at birth. They are not doing it to become a parent, but to help others to become parents. Surrogates clearly want the issue of legal parenthood to be dealt with before birth.

We also agree with the Law Commissions’ proposal for a new pathway to enable that, so that by going through the new pathway, intended parents would achieve legal parenthood at or before birth after going through a number of stages. One of those proposed stages is seeking legal advice, about which there are mixed views, because putting lawyers into the middle of something can be very expensive, but we certainly agree that having implications counselling before undertaking surrogacy is important.

We agree that the new pathway should include the surrogacy arrangements, which are legally unenforceable at the moment, and that it should promote CRB and health checks for intended parents and surrogates. They seem like sensible ways to do things, as does ensuring that individuals and teams can work with non-profit organisations for support on the pathway.

Under those proposals, the old pathway—the current pathway—would continue. We accept that that would be the case, but we would want it to change to ensure that if a relationship breaks down, no surrogate could continue to deny legal parenthood to the parents of the child. That is blatantly unfair and not in the child’s interest. That needs to be corrected, as in the case of twins A and B, who have gone through that process.

We agree that double donation should be permitted in domestic surrogacy, which is not currently allowed. We allow people to create a family through double donation via IVF, but under the current legislation, we are effectively punishing a couple for infertility by denying them the right to create a family through double donation via surrogacy. We welcome the fact that that would be rectified by the proposed changes.

On overseas surrogacy, we also agree that there should be a quick route to legal parenthood in UK law for those who have felt the need to engage in surrogacy overseas, but only in the case of jurisdictions where we are absolutely clear that the welfare of the child and of the surrogate have been maintained. Canada and the United States would be obvious examples of where that would be the case, but there may be other jurisdictions overseas where surrogacy is taking place where that might not be the case.

We also have some views on the regulation of non-profit surrogacy organisations. As long as it is not overly burdensome, bearing in mind that these are non-profit volunteer organisations, we have no problem with that regulation. Where we would like to see things to go a little bit further is on the issue of the underlying principle of altruism. Although this is not a view entirely consistent across everybody involved in the surrogacy community, we want to maintain that altruistic basis for the reasons I have said about the costs involved in more commercial systems. The issue of payments, as the hon. Member for East Renfrewshire (Kirsten Oswald) referenced, is open to debate in the consultation. The APPG took hearings on that issue, and we would like to see them more clearly defined. There are payments for loss of earnings and even to cover a small holiday for people after the arrangement, which most people would consider to be part of the altruistic nature of an agreement, but we do not want to see those arrangements massively expanded to the point where there is basically a commercial arrangement by the back door.

When surveyed for the Surrogacy UK law reform group work, 71% of surrogates agreed or strongly agreed that a surrogate should be able only to claim expenses and not to profit—if that is the correct word—from the arrangements. We recommend that intended parents should reimburse all actual costs incurred by surrogate, who should make neither a loss nor profit from the arrangement, and that there should be a better definition, as I have said, about what constitutes reasonable expenses. All parties, of course, have to be accountable for their compliance with these rules.

As I said, we welcome the new proposals, but there is a problem with the new pathway. If the surrogate raises an objection during the new pathway to legal parenthood before or at birth, we effectively find ourselves back in the current situation, where it ends up before the courts and legal parenthood would be automatically stripped from the intended parents—we end up back in the current, unacceptable situation. We would like to see some more work from the Law Commissions on that scenario, to ensure that it is resolved in a different way through other arrangements.

Our proposal would be that intended parents should retain legal parenthood unless or until a court ruling is made—that is effectively the reverse of where we are at the moment. In the current rules, the surrogate retains legal parenthood. Our view would be that if we are going through the new pathway and the surrogate raises concerns, legal parenthood should remain with the intended parents unless a court determines otherwise. Of course, the courts are always going to place the child, whatever the position on legal parenthood, with whoever is in the best interests of the child. That will never change. That is what the courts do presently; it is always about the welfare of the child.

We are broadly supportive of the changes. I know that in response the shadow Minister and the Minister cannot say a great deal, given the issue is being considered by the Law Commissions. What do we want from the Front-Bench spokespeople today? We would like a repetition of the really positive statement that my hon. Friend the Member for Thurrock made previously about how surrogacy is a progressive way of creating loving families in the UK, and is one that enjoys the support of the Government.

I know that the Minister will fully appreciate that we would like her to follow up on the guidance issued by my hon. Friend the Member for Thurrock, and to ensure that it is being shared appropriately across maternity units, with healthcare workers and with trusts across the country. It was fantastic guidance, which really does help take away some of the nervousness that some people perhaps have when they see a surrogacy arrangement. Will she commit to checking and pursuing that with the various trusts, maternity units and elsewhere?

It would also be great if the Minister could spend some time at the APPG—the shadow Minister is also welcome—and meet with surrogates and parents who have gone through or intended parents who hope to go through the process. There is a legacy from the debate from the eighties. I remember as a kid that sometimes it did not feel quite right, because we were seeing arrangements with lots of money changing hands in the United States and in other jurisdictions, and I think some people still have a misconception around surrogacy. Sitting down with surrogates and intended parents is a good way to hear about how this is a really normal thing; it is just another way that families are created. People go through IVF or adoption, and surrogacy is just another way of creating a family. There are plenty of kids in this country who are brought up in loving families, but I think it is fair to say that those who are brought into the world through surrogacy have a particular advantage in that that family is even more loving. If the Minister were to sit down with surrogates and intended parents, I am sure she will feel that too.

I would also welcome any assurance she could give that she will continue to find the money to pay for this process, started by the brilliant work of my hon. Friend the Member for Thurrock. We are halfway through the process, so one would assume that that would be the case. We would also appreciate if she could spend some time, if she has not already, with the Law Commissions, after she has met the APPG, to get a sense on where they are heading.

Although I know the Minister cannot commit to this, because managing business is always a challenge, I hope that when the draft Bill is put forward, parliamentary time will be set aside. Regardless of anyone’s views on the general election, one good thing is that now there is at least certainty. That will perhaps allow time—we will not be crowded out quite as much as we have been in the last two years by other issues—so that we can get the legislation right. The legislation from the ’80s was fine for a period, but it was a rapid response to an issue that was perhaps not fully understood or appreciated, and things have moved on. The country has moved on. The legislation needs to move on and that is why it is so good that we are at this point.

I will say no more in the hope that there is time for other people to speak. I thank everybody in the surrogacy community for the work they have done in pushing this issue and we look forward to the next stage.

16:57

[Catherine West (Hornsey and Wood Green) (Lab)]

It is a pleasure to serve under your chairmanship, Sir David. I will be very brief in my remarks because the hon. Member for Brigg and Goole (Andrew Percy) has covered a number of points. I commend him for his energy and work in this area, in particular for the way in which he has brought together Members from both Houses who have an interest in surrogacy best practice.

I will briefly say where I strongly agree with the Law Commissions’ recommendations and then I will add a couple of points where I think there could be some improvements. The Law Commissions have done well on the question of safeguards and requirements for entry to the new pathway and in particular in its reference that implications counselling is important for those undertaking surrogacy. The hon. Member said in his remarks that there is not as much knowledge about surrogacy as there ought to be. For people setting out on the journey of surrogacy, it is crucial that implications counselling be available. Furthermore, surrogacy agreements should play a central role in any new legislation, and other forms of best practice, such as criminal records and health checks, should of course be promoted. Finally, individuals and teams should be able to work with non-profit organisations for support on the pathway.

I turn to the question of improvements. First, I mention the speed at which the Government should act on this issue. The Law Commissions have done a very good job in developing proposals and I cannot see why it has taken the Government so long to take forward the draft Bill when the Law Commissions have had it ready for so long. There are drafts, and it would not take too long to get the recommendations into a Bill. The Minister is smiling, which perhaps means that it could be done quite quickly.

I turn briefly to a strong recommendation from constituents of mine who have done a lot of research and had personal experience of surrogacy. There is a danger that any future legislation might be drafted in such a way that it benefits only the children of the future, and not children who are already here and who may be suffering under current laws—for example, children in my constituency who are currently in legal limbo and living with biological parents who are not their legal parents. The Law Commissions’ proposals could correct that anomaly by removing the surrogate’s “veto” over the legal process and ensuring that the welfare of children is paramount. The hon. Member for Brigg and Goole has emphasised that the implications of the Children Act 2004 are that the welfare of children is paramount, so the Government must commit to ensuring that everyone is able to benefit from the future reforms and that no child should be left out.

I will close my remarks, because I know hon. Members wish to hear at length from the Minister, the shadow Minister and the spokesperson for the Scottish National Party. I reiterate my thanks to the hon. Member for Brigg and Goole for securing the debate and for the energetic way that he has addressed the issue through the APPG, and I look forward to seeing the Bill brought to the House.

17:01

[Kirsten Oswald (East Renfrewshire) (SNP)]

It is a pleasure to serve under your chairmanship, Sir David. We have heard a great deal of useful information in the two speeches that have been made. There can be no doubt in the mind of anyone who has watched the debate that change is needed. I thank the hon. Member for Brigg and Goole (Andrew Percy) for securing the debate. It is a really important topic and, as he suggested, the laws around surrogacy are simply outdated. They need to be improved as a matter of priority, so that children, surrogates and intended parents can be far better supported.

We hear a great deal in this place about the importance of family. If that is sincerely meant, we need to understand that not all families are the same and that families coming together via surrogacy require particular support by making the law work for everyone involved. When I started to look into this issue, I realised that the laws on surrogacy had not changed since they were introduced in the 1980s—which were not yesterday—and that they do not reflect the huge changes in society that have taken place in the intervening decades. It is no wonder that the laws of 40 years ago do not meet the needs of families and people who wish to become families today. That is expressed very well by Brilliant Beginnings and NGA Law, which said:

“The law cannot comfortably deal with the modern realities of diverse surrogacy experience, and as a result the courts have stretched the rules to make orders crucial to safeguard children’s welfare…There are limits to how far the courts can evolve the law and some children (particularly those born to single parents) have been left without resolved parentage. Judges of the High Court Family Division have repeatedly and consistently expressed concern about UK surrogacy law.”

That is, of course, completely unacceptable. In any case, surely intended parents should not have to go through a cumbersome and lengthy court process in order to become their child’s legal parents. That is a welfare issue, and it significantly affects the intended parents’ ability to make important decisions about the child in their care.

I am glad to hear the enthusiasm for a new legal framework for surrogacy, and for the importance of having the interests of the child, surrogates and intended parents at the centre. It was interesting that Lady Paton, who is the chair of the Scottish Law Commission, said:

“Surrogacy has become a significant issue in today’s society. The interests of all the parties involved must be properly regulated and protected. That is the focus of our proposals.”

That interest and focus is very welcome. The Scottish Government will consider the report and its recommendations once they are finalised, and I look forward to that. In the meantime, I would reflect on the views of my constituents, Stuart and Gordon, who are on their surrogacy journey and have expressed their situation—they are dealing with it better than I ever could. They told me:

“We got married in 2018 and have been together for four years. We have always wanted to have a family but as a male couple, the challenges of creating our own family are much harder.”

They talked about their wish to start a family as being really important to them and, of course, to so many other people. It is something that we take for granted, but for Stuart and Gordon, as for other couples on a surrogacy journey, that is not the case. They simply want to be able to move forward with the certainty that the law is keeping pace with society, and that the frameworks that should be in place take proper account of the need to be efficient and effective, with a focus on the people involved at the heart of it.

As things stand, the system is needlessly and illogically stressful. It is confusing and assuredly not in the interests of the welfare of the child concerned. I hope that we can find constructive ways forward, and I look forward to hearing from the Minister. I hope the law can catch up with the reality of our communities, so that my constituents and others in similar positions are able to have their families that they wish for.

17:05

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

It is an honour to serve under your chairmanship, Sir David. I thank the hon. Member for Brigg and Goole (Andrew Percy) for securing this important debate and for his important work in chairing the all-party parliamentary group on surrogacy, which, as we have heard, has held evidence sessions on surrogacy law reform. I also thank him for his very warm welcome to me and the Minister in his opening remarks—it is much appreciated.

[Andrew Percy]

The hon. Lady did not welcome me back.

[Mrs Hodgson]

It is very nice to see the hon. Gentleman back in this place after the election.

I thank my hon. Friend the Member for Hornsey and Wood Green (Catherine West) and the hon. Member for East Renfrewshire (Kirsten Oswald) for their welcome, albeit short, speeches. It is definitely worthwhile in a debate such as this to have more than just one voice. I look forward to seeing the all-party parliamentary group’s report on its conclusions, and I hope to work with the group in the future.

I agree wholeheartedly with the hon. Gentleman that surrogacy is a valuable and progressive option for many people who want to have children and create a loving family. However, the key piece of legislation surrounding surrogacy is now, as he said, 35 years old and severely outdated. I know this is a problem that the Government have previously acknowledged, and I welcome the former Minister, the hon. Member for Thurrock (Jackie Doyle-Price), who did so much to move the issue forward. However, there has still not been any serious reform of surrogacy legislation and, as we have heard, problems still persist. What should be a joyous time for parents can turn into a distressing burden. Applying for parental orders can take several months, and the process fails to reflect the realities of modern-day family life.

In a survey conducted by Surrogacy UK’s working group on legal reform, 92% of respondents agreed that surrogacy law reform is needed. As we have heard, the Law Commissions are carrying out a review on surrogacy and parental orders, and it has made some primary recommendations. The hon. Gentleman went through them in detail, so I do not have to. They include a recommendation for the intended parents to become the legal parents of a child from birth as per a surrogacy agreement. I hope that the Minister will respond to some of the Law Commissions’ primary recommendations. It is due to publish its full recommendations in 2021, but will the Minister set out what steps the Government will take in the meantime to prepare a Bill that would bring surrogacy legislation into the 21st century? That would indeed be a welcome step.

The legislation needs to make the requirements for surrogacy clear and fair for everyone involved, including, and most importantly, the child. That includes a definition of what constitutes a reasonable expense. Surrogates should not make a profit, but should not be left out of pocket either. A definition would provide legal certainty to the surrogate and the intended parents.

It is crucial that children are not left in legal limbo, as my hon. Friend the Member for Hornsey and Wood Green said. With that in mind, I believe that the ability to make a parental order without the surrogate’s consent under the new regime should be applied retrospectively. That means that children who are currently in legal limbo would be lifted out of that uncertainty and would be treated equally to children born after the new regime comes into force.

It is clear that the public perception of surrogacy has moved on since 1985. It is time, therefore, that the legislation does so too. I look forward to hearing the Minister’s response.

17:10

[The Minister for Care (Caroline Dinenage)]

It is a great pleasure to serve under your chairmanship, Sir David. I want to start in the same vein as the hon. Member for Washington and Sunderland West (Mrs Hodgson) by heaping praise on my hon. Friend the Member for Brigg and Goole (Andrew Percy), who is, of course, one of my favourite Members of Parliament. In all seriousness, I want to thank him for his sterling work on this really important issue. For a very long time, he has been a strong, effective and vocal campaigner on it, and he has led the APPG, which has done an enormous amount of valuable and comprehensive work on this tremendously important issue. Westminster Hall debates have played an important role in highlighting the need for Government action in this area. The former Member for Erewash secured a debate on it in 2014, which set in motion a lot of the reforming actions that increased the chance of successful surrogacy arrangements and, importantly, the formation of new families.

There is no doubt that surrogacy can transform the lives of people who want to have their own children. We of course recognise the value of surrogacy in today’s society, where family structures, attitudes and lifestyles are increasingly diverse. It is all about building happy and loving families, and giving people the opportunity to enjoy the wonderful benefits and experiences—and, indeed, sometimes challenges—that that brings.

I thank the hon. Members for Hornsey and Wood Green (Catherine West), for East Renfrewshire (Kirsten Oswald) and for Washington and Sunderland West for their constructive comments. I also praise my hon. Friend the Member for Thurrock (Jackie Doyle-Price), who did some remarkable work in this area; she very much emphasised the positive role of surrogacy. She showed great leadership and commitment, and addled the brass, as my hon. Friend the Member for Brigg and Goole said, leading the way to the Law Commission review. I also thank the surrogacy community for the way it has helped to move this important issue forward. It has shared its knowledge and experience, which has been immeasurably valuable.

The UK is one of only a few countries in the world with a legislative framework for surrogacy. It is set out in primary legislation by the Surrogacy Arrangements Act 1985, with some aspects updated by the Human Fertilisation and Embryology Act 2008. Although that framework was appropriate for the time at which it was written, we all agree that it is clear that society, family formation and relationships have moved on in the interim.

Importantly, the current legislation sets out a number of fundamental principles, which my hon. Friend the Member for Brigg and Goole mentioned, that will continue to inform any future legislation. The arrangements should be based on altruism and should be coercion-free. They should fundamentally protect the welfare of any resulting children, and respect the rights of the surrogate and the intended parents. Although those basic principles are the right ones, my ministerial predecessors—one of whom is in the Chamber—recognised that the existing legislative framework has not kept pace with a changing society. That has led to tension between the law and current social norms, in many cases creating uncertainty and unnecessary upset. That is why the current legislation has been subject to a number of legal challenges in the courts over the years, including on how legal parenthood is applied in different situations and how the courts apply time limits for applications for parental orders.

To address the issues with the current legislation, in April 2018 the Government asked the Law Commission of England and Wales and the Scottish Law Commission jointly to review all surrogacy-related law and make proposals for improvement. That large, vital piece of work is a three-year project. To respond to the hon. Member for Hornsey and Wood Green, the Law Commissions have not published a draft of the recommendations yet. To respond to the hon. Member for Washington and Sunderland West, they are expected to publish a report alongside a draft Bill in 2021. As part of the review, they undertook extensive engagement with a wide range of stakeholders around the UK.

Based on this engagement, the Law Commissions developed a number of provisional proposals to improve surrogacy legislation and published a consultation paper in June—that might be what hon. Members are getting confused about—to provide an opportunity for people to discuss their views. They then ran a series of consultation events across the UK that were open to professionals, surrogates, intended parents and members of the public. It closed on 11 October 2019. The Commissions are now collating and analysing the enormous number of responses. That will inform the discussion and the development of the final recommendations, which will go towards changing the law.

I thank the Law Commissions for their very comprehensive engagement with all those involved in surrogacy in the UK. I intend to meet the lead commissioner to discuss the outcomes and next steps in the project. Of course, I would love to meet the APPG, surrogate parents and intended parents to talk about their views and experiences in the interim. I am thankful to all those who have engaged with the process and provided invaluable feedback.

[Jackie Doyle-Price (Thurrock) (Con)]

I welcome the Minister’s comments. I want to put on the record the enthusiasm with which the Law Commissions embraced the project. They are clever lawyers, and they fully recognised that a 35-year-old law that is no longer fit for purpose is leading to legal challenges that are potentially having bad outcomes for the child, and certainly for the parents involved in the process. I encourage the Minister, as she has discussions with the Law Commissions, to start to give a nod to the rest of society about how the Government are responding to the issues that they are readily highlighting.

[Caroline Dinenage]

I will very much take my hon. Friend’s advice on this. Hers have been particularly large and glamorous shoes to fill in this role. She makes some excellent points—the Law Commissions’ work is very thorough and is beginning to look at some old and out-of-date parts of the legislation.

My hon. Friend the Member for Brigg and Goole articulated some of the key proposals, why some changes are so needed and where the views of the APPG might differ slightly. I am sure he will forgive me that today I will not comment on specific Law Commission proposals, for obvious reasons. The commission has arrived at its proposals independently, and it would not be appropriate for me to pre-empt the result of its consideration of the feedback that it received in the consultation. I will, however, put it on the record that we recognise the many different voices in this space and that there will be some different views of the proposals.

No formal discussions have taken place, but we recognise that the House may take a view that a sensitive issue such as surrogacy is appropriate for pre-legislative scrutiny of any proposed Bill. We are definitely open to that. I also reaffirm that we are committed to the completion of the review and that we will continue to sponsor it until publication. I hope that that provides my hon. Friend with the reassurance that he wanted. The Government will continue to work closely with the Law Commissions to ensure that the proposed legislative changes offer more certainty, more clarity and real incentives for those involved to seek surrogacy here in the UK.

We have already taken some action to modernise surrogacy arrangements. The Government have enabled individuals to apply for a parental order, to gain legal parenthood after surrogacy arrangements. That was made possible by the remedial order, which was introduced in December 2018. I put on record my thanks to the Committee for supporting unanimously the remedial order, which provides legal certainty for those families.

The Government have also produced guidance on surrogacy arrangements in the UK. It was developed in partnership with surrogacy and professional organisations and published in 2018. The guidance provides authoritative information for people who are considering surrogacy, and emphasises the benefits of undertaking surrogacy in UK-licensed clinics, rather than going abroad. It has been widely welcomed and commended. My hon. Friend the Member for Brigg and Goole also mentioned the guidance that goes to NHS professionals and staff—published alongside the other guidance in 2018—which was updated in 2019. However, I thank him for drawing my attention to ensuring that those guidelines are followed properly and adopted in every case.

Finally, I want to make it clear that the Government recognise the value of surrogacy, which helps a range of people who might not otherwise be able to have children to create the family for which they so long. In that spirit of inclusiveness and equality, we look forward to updating the legal framework for surrogacy in the UK, to make it fit for the challenges of the future.

Question put and agreed to.

Resolved,

That this House has considered Government policy on surrogacy.

17:20

Sitting adjourned.