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Oral Answers to Questions
(3 years, 6 months ago)
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Jason McCartney (Colne Valley) (Con)
Paul Howell (Sedgefield) (Con)
The Secretary of State for Defence (Mr Ben Wallace)
Good afternoon, Mr Speaker. Since our last questions, I have been delighted to welcome to the Government Front Bench my hon. Friend the Member for Aldershot (Leo Docherty) as our Veterans Minister and my hon. Friend the Member for Havant (Alan Mak) as our Defence Whip. I also welcome the hon. Members for Portsmouth South (Stephen Morgan) and for Islwyn (Chris Evans) to their new Front-Bench posts. I look forward to debating with them over the next few months—and years, hopefully.
The Ministry of Defence spent £20.3 billion with UK industry and commerce in 2019-20, safeguarding and supporting jobs throughout the United Kingdom. Our defence and security industrial strategy sets out several initiatives to support a thriving UK defence sector, including implementing the social value model within defence procurement.
Jason McCartney
The Boxer mechanised infantry vehicle programme is creating and securing jobs in my Colne Valley constituency. Will the Secretary of State please make sure that companies across Yorkshire continue to have the opportunity to join the UK defence supply chains to help to level up regional economies?
Mr Wallace
Yes, I can tell my hon. Friend that it is incredibly important that we can do that. Boxer, for example, will play a crucial part in the Army’s heavy brigade combat teams. We have been clear that we expect over 60% of the contract’s value to be delivered in the UK with suppliers such as the one in my hon. Friend’s constituency. As part of our defence and security industrial strategy, we will pilot a revised industrial participation policy to promote UK supply chain opportunities to companies bidding for MOD contracts.
Paul Howell
I am particularly interested in the smaller companies getting in on the ground. In line with the Government’s commitment both to levelling up and to strengthening our sovereign capabilities, will my right hon. Friend assure me that innovative UK companies such as Kromek in Sedgefield will be fully considered in the next radiation detection equipment procurement?
Mr Wallace
Yes, my hon. Friend makes an important point about small and medium-sized companies and their role in the supply chain; I see it as part of my job as Defence Secretary sometimes to protect them from the big primes and make sure that their voice is heard. As for the competition that he mentions, I obviously cannot pre-empt the results of the contract, but all bids will be properly considered. I know Kromek by reputation and congratulate my hon. Friend on being a champion of it.
John Healey (Wentworth and Dearne) (Lab)
The Prime Minister said back in November that the current four-year funding for defence would create “10,000 jobs every year”. Six months on, how many new defence jobs have been created?
Mr Wallace
I went recently to Telford to launch the Challenger 3 contract, which will grow to a significant number of jobs—nearly 200 to 300 from that alone. The Boxer coming on stream, which my hon. Friend the Member for Colne Valley (Jason McCartney) mentioned, will produce up to another 400 to 600 jobs. The Type 31 contract up in Rosyth is now moving apace, with the buildings now in place and the steel-cutting due; that will also unlock, and is delivering, hundreds of new jobs. Across the board, as we have said, there will be thousands of new jobs because of the increase in funding that we have received.
The right hon. Member for Wentworth and Dearne (John Healey) often comes to the House to say that we are cutting defence and tries to focus on the resource departmental expenditure limit, even though that itself is not a cut. With the capital departmental expenditure limit, the significant increase for capital spending will go on our equipment programme: vast amounts will be made in the United Kingdom, which means more jobs in their thousands.
John Healey
The Secretary of State will need a better answer than that, because it is down to him to deliver the Prime Minister’s “10,000 jobs every year”, yet since he has been Defence Secretary, the black hole in the budget has grown to £17 billion, only three of the MOD’s 30 major military projects are on time and on budget, and he has agreed to a real funding cut in revenue spending over the next four years. What is he doing to fix what has been the long-running Achilles heel of the MOD: delivery, delivery, delivery?
Mr Wallace
The £17 billion that the right hon. Member refers to is the sum that was identified by the National Audit Office before the defence settlement. So what have I done? I have got a £24 billion defence settlement over the next four years. I am sure the right hon. Member, having previously worked in the Treasury, can do the maths. He will see that that is the first thing I have done, and it is something I do not think anyone else has achieved since the cold war. It is the highest settlement since the cold war. But he is right to highlight the concerns on major projects. Major projects are always the Achilles heel for the Ministry of Defence, and it is important that we keep an eye on this in full and drive through, ensuring that we deliver efficiencies, but also ensuring that we cross every t and dot every i. The reason that he knows they are the Achilles heel is that in 2010 the NAO report identified that his Government at the time also had a major black hole in the equipment programme, which grew at one stage to £3 billion in a single year.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
The Minister for Defence Procurement (Jeremy Quin)
Climate change worsens poverty and economic stability, and poses a significant risk to global security. In our climate change and sustainability strategic approach, which I launched in March, we have laid out the extensive steps that we are taking to mitigate climate change and to address its implications.
Steven Bonnar
I thank the Minister for that answer. Refugee organisations say that 30 million new displacements last year were caused by floods, storms and wildfires. Acts of nature such as these triggered three times more displacements than violent conflicts did last year, and the number of those internally displaced worldwide hit the highest levels on record, yet this Government have chosen to slash foreign aid to some of the world’s most vulnerable to climate-based threats, making a complete mockery of the United Kingdom’s leadership role ahead of COP26. So what assessment has the Ministry of Defence made of the cuts to foreign aid, and how does it plan to address the rising threat of climate change to our own national security in the face of increasing instability across the world?
Jeremy Quin
I can reassure the hon. Gentleman that the threat from climate change is indeed one of the major priorities of my colleagues in the Foreign, Development and Commonwealth Office. It is also a priority of ours. As I have said, the document we published back in March sets out how we are planning for the increase in the HADR, or humanitarian assistance and disaster relief, and MACA, or military assistance to civilian authorities, roles that the armed forces are going to have to take on. I know we are all proud to see the work of our armed forces as they rise to those challenges and help some of the poorest people in the world to meet the challenges of their daily lives. We will continue to support them in doing so.
Stewart Malcolm McDonald (Glasgow South) (SNP) [V]
I, too, welcome the new Minister for Defence People and Veterans, the hon. Member for Aldershot (Leo Docherty), to his place on the Government Front Bench. I also thank the outgoing Minister, the hon. Member for Plymouth, Moor View (Johnny Mercer), for all the work he did at the veterans office.
Climate change is altering the threat picture across the globe, and not for the better. It is happening in our own back yard and on our own doorstep in the high north and in the Arctic, where we have seen a build-up of military tension because of Russia’s actions. Russia has, of course, just taken over the rotating chairmanship of the Arctic Council. Can the Minister outline to the House exactly what the Ministry of Defence is doing with regard to the threat picture in the Arctic and the high north, and explain to the House why that area of the world should get less attention than the Indo-Pacific tilt?
Jeremy Quin
I thank the hon. Gentleman for his question, and I know that, being the person he is, he will have read the Command Paper in depth. He will have seen the copious references to the high north strategy and to our joint expeditionary force partners—it is good to see Iceland coming on board with that. We are acutely aware of the need to have a forward understanding and presence and to work with our allies in the high north. The First Sea Lord and ourselves have mentioned on many occasions the impact of changing ice presence in the far north and how we need to rise to that threat. We are always alive to these threats and we are always working to ensure that we are prepared for them, but I would also gently remind the hon. Gentleman that, ultimately, our defence is a combination of all the assets we have, including our commitment to a strategic nuclear deterrent.
Stewart Malcolm McDonald
The Minister rightly mentions the defence Command Paper, which comes on the back of the integrated review. As my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Steven Bonnar) has just outlined, there is a lack of joined-up Government thinking on that. If the Government were serious about the impact that climate change is having on the threat picture, the foreign aid budget would not be getting cut and, yes, greater attention would be paid to the high north and the Arctic, so can the Minister just answer a simple question? What does the Ministry of Defence specifically want to get out of COP26?
Jeremy Quin
COP26 is an entire-Government piece of work, and we are working with all nations around the Earth to get a whole load of deliverables out of COP26, as the hon. Gentleman well knows. Our commitment in terms of defence to meeting and addressing the needs of climate change was, I am pleased to say, recognised on President Biden’s Earth Day earlier this year, which my right hon. Friend addressed, where the US Defence Secretary referred to the UK as having “raised the bar” in terms of Defence’s work in this country on climate change. We are alert to the need, and I would recommend to the hon. Gentleman the document we published earlier this year on our climate change and sustainability strategic approach. He will find a lot of his thinking in that document.
Sir Desmond Swayne (New Forest West) (Con)
The Secretary of State for Defence (Mr Ben Wallace)
NATO Foreign and Defence Ministers confirmed on 14 April that an orderly and co-ordinated withdrawal of NATO forces would start on 1 May, and we have met that timeline. The withdrawal of Resolute Support Mission forces from Afghanistan will be complete within a few months. The UK’s Operation Toral forms part of the RSM and, as such, we will draw it down in line with what our NATO allies and partners are doing.
Sir Desmond Swayne
After the withdrawal, what assistance will we afford the Afghan security forces?
Mr Wallace
The Afghan forces have been fully responsible for the security of Afghanistan since 2015, and I want to place on record my admiration for their remarkable resilience and courage in meeting the challenges they face. The UK has an enduring commitment to Afghanistan. We plan to continue to provide financial sustainment support until at least 2024. It is in all our interests that the state of Afghanistan transitions through the peace deal as the state we envisage it to be, and I will explore all options, whether from inside the country or outside it, to continue to support those forces one way or the other.
Mr Tobias Ellwood (Bournemouth East) (Con)
Thank you very much, Mr Speaker. Let me begin by wishing the Queen Elizabeth aircraft carrier battle group all the very best on her maiden voyage.
Operation Telic, the 2003 invasion of Iraq, cost the taxpayer £8 billion and the lives of 179 UK military personnel, and there was a full independent inquiry. Operation Herrick, the invasion of Afghanistan, cost the taxpayer £28 billion and resulted in some 450 UK military deaths, but to date the Government have not announced an inquiry. We now withdraw from Afghanistan just as the Taliban are on the ascent and another civil war looms. That cannot be the exit strategy that we ever envisaged, and we must understand what went wrong. For example, why did Donald Rumsfeld exclude the Taliban from the first peace talks in December 2001? If we do not understand and learn from the strategic errors of the past, this House will be hesitant to vote in favour of deploying our hard power in the future. Please, let us have that inquiry.
Mr Wallace
I hear my right hon. Friend’s requests—I know he has recently written a letter to the Prime Minister making that request. First, there is a stark difference between Iraq and Afghanistan; the article 5 triggering of that deployment and the causes behind it were not in doubt. Secondly, as our former Speaker would have said, part of my right hon. Friend’s salvation is in his own hands: as Chairman of the Select Committee on Defence, he obviously has significant capabilities and powers to bring forward an inquiry, if that is what he wishes. At present, the Government are reflecting on his letter and do not think there is a need for the same type of inquiry that we saw into what happened in Iraq. Of course, we do learn lessons; there have been a considerable amount of internal looks by military professionals at what is going on.
On Donald Rumsfeld and the United States Administration, that is a matter for the US Administration and not for me. I am not able to ask what lay behind their motives as to decisions they have made over the past 20 years and I cannot therefore venture into that space.
Mr Speaker
I call the Chair of the Intelligence and Security Committee, Dr Julian Lewis.
Dr Julian Lewis (New Forest East) (Con)
I hope we are not so naive as to believe that the Taliban will stick to any peace deal unless they recognise adverse consequences for breaking it. So will the Government take steps, in conjunction with the US and other NATO allies, to find a new strategy, possibly based on a strategic base in the region, to deter the Taliban and protect Afghanistan from a total Islamist takeover after our land forces have totally been withdrawn?
Mr Wallace
My right hon. Friend makes a very pertinent point and a very real suggestion. The US, in that peace agreement, chose not to make it conditions-based at the end. That was a regret for most of the NATO allies, as we thought that that was important. However, a lot of people have lost their lives in that conflict and sacrificed a lot, and I do not intend that to be for nothing. As I said, we will explore all options that we can to make sure that we protect not only Britain’s interests and citizens, but her allies.
We are also protected by international law in doing what we need to do to defend ourselves if a threat emanates from that country or any other around the globe, and we have the capabilities to do that. Allies will continue to talk, and our support for and funding to the Afghan Government will continue to at least 2024. The one thing I would say to the Taliban is that they will remember what happened the last time they played host to al-Qaeda.
Gareth Davies (Grantham and Stamford) (Con)
Sir David Evennett (Bexleyheath and Crayford) (Con)
The Minister for the Armed Forces (James Heappey)
As we shape the open international order of the future and promote our interests globally, we are investing an additional £24 billion in active and modernised armed forces. That will not only place defence at the heart of global Britain’s protection but project the UK as a force for good in the world—from our work to build democratic institutions to the building of capacity in our partners’ armed forces and the delivery of an expanded defence diplomatic network, alongside historic investment in research and development. Perhaps nothing better embodies our ambition than the deployment this weekend of the carrier strike group, which will be working on all those things over the next six months.
Gareth Davies
I welcome the maiden voyage of the UK carrier strike group, which set off this weekend. It is NATO’s first fifth-generation carrier strike capability and will join a number of NATO exercises along the route. Will the Minister outline how that demonstrates the Prime Minister’s commitment to Britain remaining NATO’s key European ally? How will it advance our collective security in the Euro-Atlantic region?
James Heappey
In the past few weeks the carrier strike group has participated in Exercise Strike Warrior and in the next few weeks it will participate in Exercise Steadfast Defender, but that is not the totality of the Royal Navy effort in the Euro-Atlantic in the next few weeks. Indeed, the littoral response group north is sailing for the Baltic, where she will participate over the next few weeks in Baltops. This is not a flash in the pan: the Royal Navy and the rest of our armed forces are committed all year round to showing that Euro-Atlantic security is the absolute bedrock of the United Kingdom’s security.
Sir David Evennett
I welcome what the Minister has said and wish well all the sailors, soldiers and air personnel who have set sail as part of the carrier strike group’s maiden deployment. Does my hon. Friend agree that the deployment, which will visit more than 40 countries and undertake more than 70 engagements, will deliver our ambition to increase our interoperability and burden-sharing with our allies around the world?
James Heappey
Over the weekend my right hon. Friends the Prime Minister and the Secretary of State for Defence visited the carrier strike group, as did Her Majesty the Queen on Saturday, and I know that the carrier strike group personnel will be further delighted by the good wishes sent by so many in the House today. Over the next six months they will fly the nation’s flag in all corners of the world and I am sure they will do so with great style and skill. My right hon. Friend is absolutely right to highlight the deployment as the embodiment of so much of what is in the defence Command Paper. Over the next few years we all look forward to this being not the first but the latest in a sequence of events of similar importance that project global Britain around the world.
Chris Evans (Islwyn) (Lab/Co-op)
Thank you, Mr Speaker.
Cuts to armed forces numbers will affect Britain’s influence around the globe. The former Defence Minister, the hon. Member for Plymouth, Moor View (Johnny Mercer), appeared before the Defence Committee on 11 May and said that “no one” could explain the rationale for the size of the defence cuts. Does the Minister agree with his former colleague?
James Heappey
No. As the carrier strike group sets sail and the littoral response group sets out for the Baltic, as our soldiers in Mali and Afghanistan show what great jobs they have been doing there, and as our Air Force continues to contribute to NATO air-policing missions, alongside the fantastic work it does to support the rest of our deployments around the world, I can see a rapidly transforming set of armed forces that are better equipped and better able to meet the needs of the United Kingdom by responding to threats when they emerge upstream, rather than sitting in the United Kingdom contingent for the fight when it eventually comes.
Fay Jones (Brecon and Radnorshire) (Con)
The Minister for the Armed Forces (James Heappey)
The Army has organised and conducted more than 74,000 tests, 11,000 ambulance responses and almost 70,000 covid vaccine inoculations in Wales over the past year. As we build on our close relationship with Welsh society, we remain committed to relocating a major regular Army unit to Wales, and the Ministry of Defence continues to examine the options to locate a second major unit to Wales as well.
Fay Jones [V]
The Welsh element of Operation Rescript, the Army’s response to the covid-19 outbreak, was stood up from Brecon barracks, as the Minister has described. From there, in conjunction with a large family of defence partners, Brigadier Andrew Dawes has overseen more than 1,200 service personnel across the three services who have been working tirelessly in support of the NHS in Wales. I particularly want to thank the members of the RAF who joined us at the vaccination centres in Builth Wells and Bronllys. Does the Minister agree that this recent activity serves to underline the operational importance of the barracks and further weakens the case to close it in 2027?
James Heappey
Brecon and, indeed, the 160th Welsh Brigade are fortunate to have such an outstanding local representative making their case in Parliament. My hon. Friend is absolutely right to pay tribute to all the amazing work that they have done in supporting the covid response in Wales. I know that, as a result of all her hard work campaigning on this matter, she was delighted to hear confirmation from my hon. Friend the Minister for Defence Procurement that the brigade HQ will remain in Brecon.
The Ministry of Defence is committed to continuing to ensure that regular Army units are retained in Wales, alongside what is a fantastic and well-used training estate, including that in and around Brecon, and I know that her constituents can have every confidence that she will continue to make that case should we ever forget it.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister for Defence Procurement (Jeremy Quin)
This Government will spend more than £85 billion on equipment and support over the next four years to ensure that the men and women of the armed forces have modern equipment that they need to meet the threat. That includes a commitment of at least £6.6 billion to invest in research and development to develop the capabilities of the future.
Mr Sheerman [V]
Surely the Minister is aware that only last month the Defence Committee said that, in a conflict with a country such as Russia, our forces would be obsolete and outgunned, because their armed vehicle capability is just not up to scratch. As a Member of Parliament who represents some fine engineering companies in the defence sector, such as David Brown and many others, may I ask what is going wrong with our defence capability at the same time as this Government are cutting our armed forces down to the bare minimum of 82,000 personnel?
Jeremy Quin
What is going on is a massive enhancement —an investment—of our armed forces, particularly in the Army. I refer to Ajax, which is well known to many people in this House; to the Challenger 3 announcement, to which my right hon. Friend referred; and, in particular, to Boxer. The hon. Gentleman will be delighted to hear that David Brown in his constituency won a multi-year power pack contract for the Boxer programme. We are putting in a huge amount of investment, which will help us to develop a highly credible armed force. That is what we are developing and continuing to invest in and he can be proud of what they can deliver.
Chris Evans (Islwyn) (Lab/Co-op)
In the light of the cancellation of Warrior and the delays and rising costs of Ajax, will the Minister now give a specific date on which our armed forces will finally receive the new generation of armoured vehicles?
Jeremy Quin
I start by welcoming the hon. Gentleman to his place. He, like me, is a historian and will know that there have been debates about how quickly defence equipment will arrive since the days of Hywel Dda buying body armour and Alfred the Great putting the original order in for offshore patrol vessels. It is always an issue of contention when things will arrive—when they will get delivered. He can be very assured by the nature of the contracts that we have awarded and by their delivery. Ajax is still in its demonstration phase, but we have the original 14 vehicles with us, and work is ongoing. Challenger 3 is committed to be joining us in the Army’s line up. We are doing our best to advance Boxer and it is already well on track, with contracts awarded throughout the United Kingdom. That is a combination that will get us skilled jobs into the UK, while, at the same time, giving our armed forces the capabilities that they need to meet the threats of the future.
Damien Moore (Southport) (Con)
The Minister for Defence People and Veterans (Leo Docherty)
I want to ensure a gold standard of care for veterans. I pay tribute to the national health service for its excellent range of bespoke services that are available to veterans as a priority.
Damien Moore
I welcome my hon. Friend to his place. My constituent Mark Roberts was discharged from the Royal Tank Regiment in 2015 on medical grounds. Despite his service to our country, he was on the NHS waiting list for dental treatment for three years. May I ask my hon. Friend to see what more can be done to ensure that our veterans get access to the medical treatment that they deserve?
Leo Docherty
I thank my hon. Friend for the terrific work that he does to represent the interests of veterans in his constituency. I am concerned to hear the details about Mr Roberts. If my hon. Friend forwards me the details, I will pursue that case with urgency.
Sally-Ann Hart (Hastings and Rye) (Con)
Mrs Heather Wheeler (South Derbyshire) (Con)
James Sunderland (Bracknell) (Con)
Matt Vickers (Stockton South) (Con)
The Minister for Defence People and Veterans (Leo Docherty)
On 29 April 2021, we delivered the Overseas Operations (Service Personnel and Veterans) Act 2021, which is a landmark piece of legislation that will mean that our armed forces in the future can deploy with confidence when they are going around the world to do their duty.
Sally-Ann Hart [V]
I am grateful to my hon. Friend and the Secretary of State for delivering this important piece of legislation, and to his predecessor, my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), for his important contribution. Will my hon. Friend the Minister outline what work has been done to communicate important changes contained in the Act to servicemen and women and veterans, including those in Hastings and Rye?
Leo Docherty
I am grateful for the work that my hon. Friend does in Hastings and Rye to represent the interests of veterans. It falls on us all to sing from the rooftops about this landmark Act. We will be communicating it through every channel available to us, and we will look at whether we can include it in pre-deployment training.
Mrs Wheeler [V]
I congratulate my hon. Friend on the Overseas Operations (Service Personnel and Veterans) Act, which has provided huge relief to both veterans and serving personnel in my South Derbyshire constituency. Will he reassure me that, on top of improving the treatment of service personnel throughout the criminal and civil claims process, the Ministry of Defence is also improving its own internal investigations process?
Leo Docherty
My hon. Friend is right to raise investigations, which are a critically important component of the service justice system. It is in the interests of serving personnel that we have a rigorous and transparent system. That is why the Secretary of State has tasked Justice Richard Henriques to conduct a thorough review of our approach to investigations. We much look forward to him reporting in the autumn.
James Sunderland
I believe that support for our veterans continues to improve under this Government, but, as the Minister knows, there are two pressing issues that require immediate resolution: Northern Ireland legacy; and the statutory guidance for the Armed Forces Bill. Will he please assure me that both are forthcoming?
Leo Docherty
First, let me say how grateful I am for the work that my hon. Friend does in supporting veterans, particularly with the all-party parliamentary group on veterans and with other activities; it is appreciated. The statutory guidance will be published shortly. We are cognisant that the Armed Forces Bill needs to have teeth, and that statutory guidance will be part of our approach. When it comes to Northern Ireland, we have a shared interest in ensuring that this is dealt with. The Government will in due course bring forward a package that delivers for veterans, victims and their families.
Matt Vickers
I welcome the fact that the Overseas Operations (Service Personnel and Veterans) Act will provide vital protections to those who put their lives on the line to defend our country and will introduce a new high bar for criminal prosecutions, but will my hon. Friend assure me that when members of the armed forces or our veterans do face prosecution, they will receive comprehensive support from the Ministry of Defence? Will he also join me on a visit to the Don War Memorial Museum & Veterans Hub to see the incredible work of Julie Cooper in celebrating and supporting our veterans?
Leo Docherty
I am pleased to confirm that that support is available, and it is only right that it should be. Who could resist an invitation to Teesside? I would be delighted to visit the Don War Memorial Museum with my hon. Friend, and to learn about the magnificent military heritage of which Teesside can be rightly proud.
Selaine Saxby (North Devon) (Con)
Aaron Bell (Newcastle-under-Lyme) (Con)
The Minister for Defence Procurement (Jeremy Quin)
To ensure that our armed forces are able to meet current and future threats, we are investing over £6.6 billion in defence research and development over the next four years. Defence will accelerate the use of the next generation technologies through focused investment on demonstrators and early prototypes, aggressively pursuing game-changing capabilities at pace. This includes areas such as directed energy and hypersonic weapons, forms of drones, artificial intelligence and automation.
Selaine Saxby
Does my hon. Friend agree that it is vital that our British troops have the best equipment in the world, that when that is produced here in Britain by small manufacturers like CQC in my constituency, the procurement process should be fair and transparent, and that where possible we should be buying British and supporting British jobs in places like Barnstaple?
Jeremy Quin
I absolutely agree that we need the best equipment. My hon. Friend has been a great advocate for CQC in her constituency. I am delighted that it recently secured an order for 27,000 operational travel bags for the British Army. Small and medium-sized enterprises perform an invaluable role in supporting defence and now account for over 21% of expenditure. I will publish a revised SME action plan later this year.
Aaron Bell [V]
In common with my hon. Friend the Member for North Devon (Selaine Saxby), I welcome the support for SMEs in my constituency. We rightly prioritise our onshore industrial defence capabilities. However, in order to ensure that we remain at the forefront of technological advancements, can my hon. Friend assure me that we will not limit our ability to also work collaboratively with our friends and allies in developing new capabilities and responses to what are increasingly complex and ever-changing threats?
Jeremy Quin
Absolutely not. I can reassure my hon. Friend that, as he recognises, international programmes are hugely important to defence and we will continue to engage with our friends and allies. To name but two, Boxer and FCAS—the future combat air system—are international collaborations, and they are bringing thousands of skilled jobs to the west midlands, to the north-west and throughout the UK.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
The Secretary of State for Defence (Mr Ben Wallace)
Transition to the mark 4A warhead is ongoing to ensure that we continue to have a safe, secure and available stockpile until the replacement warhead is available by the end of the 2030s. The replacement warhead is in its early preliminary phases and will come after the transition to the upgraded mark 4A warhead. It is too early, therefore, to provide a cost estimate at this stage.
Margaret Ferrier [V]
On 15 March, in response to a written question by the right hon. Member for Ludlow (Philip Dunne), the Government confirmed that the UK replacement warhead for the Trident nuclear missile will be designed, developed and manufactured in the UK. Will the Secretary of State clarify whether this replacement nuclear warhead will use up any funds that would otherwise go towards conventional defence projects?
Mr Wallace
If the hon. Lady had listened to the previous answer, she would know that the current funding is being spent on transitioning to the mark 4A upgrade of the existing warhead scheme. We are engaged in the design and the process to get to the replacement warhead in nearly 20 years. Just like the rest of the nuclear deterrent budget, it is part of the overall budget. It was agreed in 2015 as part of the £31 billion for the Dreadnought programme. We continue to spend that, and I expect there to be a budget line to continue with the deterrent. As long as this Parliament votes, as it did in 2016, for that deterrent to exist, there will be a budget for it.
Kate Osborne (Jarrow) (Lab)
Jeff Smith (Manchester, Withington) (Lab)
Ian Byrne (Liverpool, West Derby) (Lab)
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The Minister for Defence People and Veterans (Leo Docherty)
In 2019-20, 84% of service leavers were employed within six months of leaving—higher than the UK employment rate of 76%. We support people transitioning out of the armed forces with the Career Transition Partnership and Defence Transition Services. We have also introduced a national insurance holiday for employers and veterans and a guaranteed entry scheme for veterans seeking to join the civil service. Veterans’ employment is a huge success. They bring energy, loyalty and commitment to the workplace, and that is something we should celebrate.
Kate Osborne
In the Jarrow constituency there are many talented and dedicated people who leave the armed forces every year and find it difficult to transition into civilian life and employment. Despite employment not being covered by the Government’s Armed Forces Bill, will the Minister outline what steps he is taking to work specifically with local charities and local authorities to ensure that the talent and the skills of our ex-service personnel are utilised in civilian life?
Leo Docherty
When it comes to local authorities, we will, when the Armed Forces Bill becomes the Armed Forces Act, issue statutory guidance to ensure that no veteran is at disadvantage. I hope that all local authorities will take that on board and deliver for our veterans in the local community.
Jeff Smith [V]
Getting a decent job is key to a successful transition to civilian life, but the Armed Forces Bill, as my hon. Friend the Member for Jarrow (Kate Osborne) said, does not include responsibility for employment or transition. Service charities have said that the Bill is too narrowly focused, so why will the Minister not widen the scope of the Bill to ensure that all the promises of the covenant are delivered by it?
Leo Docherty
When it comes to transition, it starts two years before someone actually leaves the armed forces and lasts for two years after they leave. The support that the MOD provides to service leavers lasts for two years, but we must bear in mind that overwhelmingly the vast majority find gainful employment within six months.
Ian Byrne [V]
For my constituents in Liverpool, West Derby who have dedicated themselves to working in the armed forces, the transition to civilian life and employment can be incredibly difficult for them and their families. Having a final posting located far from where they plan to resettle can also have a detrimental impact on the whole process. Can the Minister please outline what steps his Department is taking to address this issue and the impact it is having on the wellbeing and outcomes for those affected?
Leo Docherty
Family life is at the heart of service, and service families are an integral part of the defence community. We want flexibility and choice when it comes to the choices that families make, and that is why we are bringing forward our families strategy, which will include things like wraparound childcare and a range of other initiatives to help ensure that there is choice and flexibility for service families.
Mr Dhesi
Cobseo, the Confederation of Service Charities has noted that there was only one mention of self-employment or business ownership in the 2020 armed forces covenant annual report. With the pandemic making it more likely that veterans will have to explore self-employment as a viable career option, what action will the Minister take to ensure that he supports self-employment within the veteran community?
Leo Docherty
We support service personnel transitioning out and seeking to start their own businesses and be self-employed through the career transition partnership, which is a hugely successful initiative. We recognise that veterans bring some of the key skills to successful self-employment: initiative, discipline and the tendency to work extremely hard. I think overall the support offered by the career transition partnership is a very positive story.
Stephanie Peacock (Barnsley East) (Lab)
A survey by the Soldiers, Sailors, Airmen and Families Association has suggested that almost half of recruiters would worry about hiring a service leaver because of concerns around negative mental health. While the Government’s proposed national insurance relief for businesses that hire veterans is welcome, it does not tackle the root cause of the problem. What are the Government doing to address the misconceptions employers may have about veterans?
Leo Docherty
I welcome the hon. Lady to her place, and I wish her well in her new appointment. The key thing we can all do is to not talk down our veterans, but instead talk them up. Overwhelmingly, there is a mismatch, and a misconception among the public about whether service damages veterans. Service does not damage veterans. Overwhelmingly, veterans leave as better people with terrifically useful transferable skills. That is why overwhelmingly the vast majority get gainful employment six months after leaving. The story of veteran employment is something of which we should be hugely proud.
Andrew Jones (Harrogate and Knaresborough) (Con)
The Minister for Defence People and Veterans (Leo Docherty)
Service families are an integral part of the armed forces community. We want people in the armed forces to be able to sustain a family, but also a military career. I am grateful to my hon. Friend the Member for South West Bedfordshire (Andrew Selous) for his critically important report “Living in our Shoes”. We look forward to taking the recommendations from his report into our armed forces families strategy as part of our efforts to ensure that defence people can sustain family life.
Andrew Jones
I thank my hon. Friend for that answer. I think the Armed Forces Bill will be very helpful in ensuring that families receive the same level of consideration from public bodies wherever they live, but may I focus on education? Moving schools when moving postings is a regular part of service family life that can have a disruptive impact on a child’s education. As my hon. Friend takes forward his work, can I ask him to place a particular focus on education for service families’ children?
Leo Docherty
My hon. Friend makes a very important point. I am pleased to report that there are now changes to the school admissions code in place that will allow flexibility. This will allow service children to join a school during the school year, and I am delighted to be able to report that. As I have already mentioned, that, in tandem with wraparound childcare and the future accommodation model, demonstrates that we are committed to our forces families.
Kate Griffiths (Burton) (Con)
The Secretary of State for Defence (Mr Ben Wallace)
Can I also place on record my welcome to the hon. Member for Barnsley East (Stephanie Peacock)? I meant no disrespect in not welcoming her at the beginning.
In the integrated review, we highlighted the increasing prevalence of unconventional threats from state actors and the importance of redoubling our efforts to defend democratic institutions and values. Reports of the diverting of a civilian aircraft in Belarus are deeply concerning, and it potentially violates international civilian aviation rules. We condemn the actions of the Belarusian authorities, and we are working with allies and partners to develop a co-ordinated and unified response. My right hon. Friend the Foreign Secretary will set out further details later.
The Government will introduce a legacy package that will deliver on the commitments to Northern Ireland veterans, giving them the protection they deserve, as part of a wider package to address legacy issues in Northern Ireland. It is the MOD’s policy, where veterans face allegations arising out of activities related to their duties, that they receive full independent legal support and representation for as long as necessary at public expense.
Kate Griffiths [V]
Legislating to tackle vexatious claims and put our brave armed forces personnel first was a manifesto commitment of this Government, and a landmark piece of legislation that I was proud to support. Does my right hon. Friend agree with me that legislation needs to be brought forward to protect our Northern Ireland veterans and address the legacy of the troubles?
Mr Wallace
Mr Speaker, I will get the hang of Topical Question 1 one day. I hope the answer will be better the second time around.
The Government are committed to bringing forward measures. Those measures were mentioned in the Queen’s Speech, and we will obviously publish them as soon as possible. As a former Northern Ireland veteran myself, I know it is incredibly important that we recognise that many of those veterans served with distinction and bravery, and upheld the law to their highest ability. It is deeply regrettable that we see many of them brought to trial—or under investigation, rather than trial—for vexatious reasons, and we are committed to make sure that that does not happen.
John Healey (Wentworth and Dearne) (Lab)
May I, from the Opposition Benches, strongly endorse the concern and condemnation the Defence Secretary has expressed over the actions of the Belarus authorities? May I also say that we strongly support the work of Operation Tangham, but in the light of recent press stories, can I ask the Defence Secretary for his assurance that if he takes any decision to commit combat troops to Somalia, he will report such a decision to this House first?
May I ask about the Army’s fighting vehicles? The Defence Secretary wrote off over £1 billion of taxpayers’ money in March when he scrapped the Warrior. Weekend reports say that the MOD has also paid out £3.2 billion for the Ajax, and so far received only a dozen delivered, and those without turrets. A figure of £4 billion is the total size of the Government’s levelling-up fund over the next four years. Given that the Secretary of State has conceded this afternoon that delivery is the MOD’s Achilles heel, will he accept that Parliament now needs a system of special measures for the MOD so that British forces and the British taxpayer get much better value from his Department?
Mr Wallace
I think the right hon. Member is looking at the special measure. The reason I am here as the Secretary of State for Defence is to get the record level of investment that will put right not only five years or 10 years, but 20 years of mismanagement of these programmes. Sometimes that means taking tough decisions, and the Warrior will be retired when it runs out in 2025; it is not just going to be cancelled as such. It was also important to make sure that we invested in parts of the land capability that I thought, and indeed that officers thought, were the right thing for the future of the Army—the Boxer armoured vehicle. For that investment, not only do we get a factory in Telford and hundreds of jobs, but we get one of the very best wheeled armed vehicles in the world. For his £3.3 billion on Ajax, he will get over 500 vehicles when they are delivered, and much of that money has already been committed. He will also get a factory in Wales, which I am sure he is pleased about. In both projects, we will get the intellectual property, so that when we export those vehicles around the world, not only will British defence profit, but so too will the people of the United Kingdom through their jobs.
Mr Speaker
Let me say to the Secretary of State and the shadow Secretary of State that topicals are meant to be short and punchy, not lengthy debates. Can they both get it right for next time? I now come to Mr Metcalfe, who will definitely get it right.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
The Minister for the Armed Forces (James Heappey)
I certainly do. Offshore patrol vessels are an extraordinarily versatile platform. Batch 1 OPVs, which are mostly responsible for homeland defence, are at high readiness and are called out for all sorts of reasons, from Jersey, to escorting vessels from other nations through our waters. Batch 2 OPVs, a precursor to the arrival of the Type 31, already operate in the south Atlantic, the Mediterranean and the Caribbean. They will soon be joined by further vessels in the Indo-Pacific, demonstrating the forward presence concept, which will have huge utility in the years ahead.
Jessica Morden (Newport East) (Lab)
Mr Wallace
Yes, it is an issue, and the Home Secretary and I have worked closely over the past year. We have already changed some of the reasons, to ensure that we bring back more, and in light of the withdrawal, we are working incredibly hard together to see what more we can do. We owe those people a debt, and it is the right and decent thing to stand by as many of them as possible. I feel that personally, and it is deeply important for what we stand for and our values in world. I hope we will have more to announce and speak about later.
Holly Mumby-Croft (Scunthorpe) (Con)
The Minister for Defence Procurement (Jeremy Quin)
Although defence represents a small element of total demand, UK steel has made a significant contribution to it, including the Queen Elizabeth aircraft carrier. Although this is generally a decision for defence primes, we ensure that information is shared as part of our processes, and we encourage the resourcing of UK steel wherever possible.
Mr Toby Perkins (Chesterfield) (Lab)
Mr Wallace
The Government always go into elections dealing with the threat as they see it. The threat has changed, and it is incredibly important that we do the right thing in responding to that threat. It is the duty of Government members to ensure that if the facts on the battlefield change, so do we. The hon. Gentleman would, quite rightly, be the first to stand up if we did not equip our people properly and they were put at risk. We all remember what happened last time. It was called the Snatch Land Rover fiasco, and many brave men died defending that ridiculous policy, because of his Government’s choices.
Suzanne Webb (Stourbridge) (Con)
Jeremy Quin
I will bear that offer in mind. It is a great decision for UK industry, especially for the west midlands, and a great decision for the British Army. The ability to deploy world-class tanks provides policy choice for policymakers against a range of threats in our uncertain world and state of the art Challenger 3s will be a vital asset.
Mohammad Yasin (Bedford) (Lab) [V]
Jeremy Quin
I am not certain if I would agree with the premise of the question. I agree with the hon. Gentleman that it is incredibly important. We will be investing over £6.6 billion in research and development over the next four years. We have, through the frontline commands and through defence science and technology, extensive contacts with our universities. They work with us closely. We have really profitable joint workings with them and, indeed, with smaller companies through the defence and security accelerator and the innovation schemes to pull fundamental research on to the frontline. I think we do have the processes in place, and I look forward to that money being well spent in the four years ahead.
Duncan Baker (North Norfolk) (Con)
Jeremy Quin
I am glad my hon. Friend used the phrase he did. I think we are all aware, and his constituents will be aware, that we need to keep our brave air crews safe from harm as they go out every day to keep us safe, and that they get to that level of proficiency through training. I am sure he will accept that and so will his constituents. However, we always want to do that causing the minimum amount of inconvenience and disturbance. I will willingly meet my hon. Friend to discuss the issue.
Nick Smith (Blaenau Gwent) (Lab)
Mr Wallace
I can write to the hon. Gentleman in detail if he would like. Does he mean deployable or does he mean trade trained strength, because there are a number of different measures? Most soldiers who are trade trained are deployable unless they are on a course. I can give him the exact percentages, but we measure them mainly in trade trained; whether they are trained, whether they are in depot or whether they are in their battalion doing active duty.
Aaron Bell (Newcastle-under-Lyme) (Con) [V]
Mr Wallace
The Government are committed to Operation Shader and will continue to be so. The threat of ISIS has not gone away. Indeed, throughout her deployment, the carrier will also potentially take part in operations to support it. It is very important that we continue to degrade ISIS capability, because of its destabilising effect in Iraq and the threat it poses directly to us.
Chris Elmore (Ogmore) (Lab)
The Minister for Defence People and Veterans (Leo Docherty)
I recognise that this is an important issue. This is taking too long, so I look forward to reporting back to the hon. Gentleman with an update on progress.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind) [V]
Mr Wallace
We will continue with the Astute programme. As the hon. Lady points out, there were some delays in some of that programme. We will continue to manage the programme. The Astute submarines will be delivered by BAE Systems in Barrow-in-Furness. I visit regularly to make sure we try to keep it on track.
Richard Thomson (Gordon) (SNP)
Jeremy Quin
Just to reassure the hon. Gentleman, there were extensive discussions with the Scottish Fire and Rescue Service before the decision was made. It was only made after a great many exercises to judge the effectiveness of the new system and after it was signed off by the Defence and Fire Rescue Service HQ and the commander of Her Majesty’s naval base on the Clyde. It reflects better fire prevention systems, and I am pleased to say that we also have new firefighting vehicles coming in later in the year. The decision to move from a six-person, 24/7 shift to a five-person, 24/7 shift was taken only after that level of engagement.
Mr Speaker
I am suspending the House for three minutes to enable the necessary arrangements to be made for the next business.
Belarus: Interception of Aircraft
(3 years, 6 months ago)
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Tom Tugendhat (Tonbridge and Malling) (Con)
(Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if he will make a statement on what measures he has taken to respond to the interception of a civilian aircraft by a Belarusian fighter and the detention of a journalist.
The Secretary of State for Foreign, Commonwealth and Development Affairs and First Secretary of State (Dominic Raab)
I thank my hon. Friend for his question. Yesterday afternoon, a Ryanair flight from Athens to Vilnius was forced to land in Minsk. There were more than 100 passengers on board, including the prominent independent Belarusian journalist Roman Protasevich. The Belarusian authorities claim that this was in relation to an alleged bomb threat, but we have seen no evidence to support that claim. What we have seen is that Belarus scrambled a MiG fighter, forced the plane to divert to Minsk and then used the emergency landing as an opportunity to arrest a prominent journalist.
We understand that Mr Protasevich was detained on spurious charges, including involvement in riots, organisation of actions that violate public order and incitement of hatred and discord. The UK calls for his immediate release and the release of all other political prisoners in Belarus. We are urgently seeking full details of precisely what took place in relation to flight FR4978, but the scenario as reported is a shocking assault on civil aviation and on international law. It represents a danger to civilian flights everywhere, and it is an egregious and extraordinary departure from the international law and international practice that guides international civil aviation under the Chicago convention.
The international community as a whole has a shared interest and a joint stake in ensuring that civilian aircraft can fly safely and without harassment. That is why we are calling for the council of the International Civil Aviation Organization to convene urgently to address thoroughly and rigorously this incident. The regime in Minsk must provide a full explanation for what appears to be a serious violation of international law. Mr Lukashenko’s regime must be held to account for such reckless and dangerous behaviour.
For our part, we have summoned the Belarusian ambassador, and the Minister for European Neighbourhood and the Americas is conveying our condemnation of these acts as we speak. We are working with our international partners to explore every potential diplomatic option at ICAO, the UN Security Council, the Organisation for Security and Co-operation in Europe and the G7. Beyond the diplomatic track, we are actively considering and co-ordinating with our allies on further sanctions on those responsible for this outlandish conduct.
To ensure the safety of air passengers, I have also worked with the Transport Secretary to issue a notice to all UK airlines to cease overflights of Belarusian airspace and to suspend the operating permit of the Belarusian airline BELAVIA with immediate effect. That is, of course, the only airline that flies regularly between the UK and Belarus. But in order to be sure, and as a precautionary measure, the UK Civil Aviation Authority will be instructed not to issue any further ad hoc permits to any other carriers flying between the UK and Belarus.
We continue to support civil society and media freedoms in Belarus. We provided more than £1 million in 2020, and in this financial year we are providing an additional £1.8 million. I know the whole House will join me in condemning unequivocally this reprehensible action under the Lukashenko regime. The UK will stand firm in protecting freedom of the media, upholding international law and maintaining the safety of international civil aviation.
Tom Tugendhat
Thank you very much, Mr Speaker, for granting this urgent question.
I welcome very much my right hon. Friend’s statement. What he has described, quite correctly, as an outlandish attack is the first time we have seen air piracy in Europe for many years. This attack was a hijacking that turned into a kidnapping, and is a serious violation of the human rights not just of Roman Protasevich, who has been held by the Belarusian authorities, but of every passenger and member of the crew on that airliner. This is a direct threat not just to those who may be dissidents to regimes such as Belarus, but to all of us who are at risk of overflying such a state.
I welcome enormously my right hon. Friend’s decision to suspend travel to Belarus and stop overflights. He is absolutely right to do so, and he joins the Chairs of the Foreign Affairs Committees of Canada, the Czech Republic, Estonia, the European Union, France, Germany, Ireland, Latvia, Lithuania, Poland, Spain and the United States in calling for that. Will he go one step further and call for a suspension of the Nord Stream 2 pipeline and the Yamal energy pipeline, which flows through Belarus? That is where the money that supports that tyrannous regime comes from. Will he also join European partners and friends, and NATO allies such as the United States, in reinforcing that this was an attack not just on a civilian airliner flying between two EU capitals, but on one flying between two NATO capitals? That includes us, and it is vital to the security of the UK people that we stand strongly against it. Otherwise, everyone flying to Thailand, Australia and many other destinations will have to wonder not only what they may have done to offend a regime they are flying over but what somebody else on the aircraft—somebody they have never met before—has done. Any of these regimes could be inspired, like Lukashenko’s, to force a civilian aircraft out of the sky with threats of violence.
Dominic Raab
I thank my hon. Friend for his question and for his support for the actions that we have taken today. He is absolutely right about the threat posed to all of us as users of civil aviation and, indeed, to the international community at large, not least given that the ICAO regime is one of the most well-supported international instruments dealing with a common good that we have in the international community. He is right about the ICAO, and the UK has led the calls for an urgent meeting of the council.
I welcome my hon. Friend’s action among parliamentarians around the world. He rightly raised overflights, and he will have seen and noted the decisions that we have taken today. He also raised sanctions, and we will urgently consider further possibilities with our partners. The right thing to do is to co-ordinate to maximise our approach. He will know that we have already imposed targeted sanctions on 99 individuals and entities since the election in August 2020 and we very much led the way at that time. He also mentioned Nord Stream and other possibilities. We will consider and consult with our partners and see what further action they are willing to take.
Finally, I agree with much of my hon. Friend’s characterisation: on the face of it, the Lukashenko regime engaged in a particularly calculating and cynical ploy to force a civilian flight to land under the threat of a MiG fighter and under the hoax of a bomb alert, behaviour that is as dangerous as it is deceitful, and a flagrant violation of international law.
Lisa Nandy (Wigan) (Lab)
After yesterday’s acts of modern piracy, it is clear that Lukashenko must now be recognised as an international threat—a danger not just to his own people but to the citizens of other countries. For a state to hijack a civilian airliner flying between two NATO allies in order to arrest a journalist is an assault on the freedom of the air and on freedom of speech. Unless the consequences are swift, robust and co-ordinated, it will create an extraordinarily dangerous precedent that will put journalists, dissidents and activists from the UK or anywhere else at risk every time they board a plane. I therefore very much welcome what the Foreign Secretary said today and, in particular, that he has summoned the ambassador and demanded the release of Roman Protasevich and other political prisoners. Those in the Belarusian pro-democracy movement are owed our solidarity and support as they fight for the right to determine their own future through free and fair elections.
I was pleased to hear the Foreign Secretary’s response when the hon. Member for Tonbridge and Malling (Tom Tugendhat) asked about working with allies in NATO and the EU and through ICAO to ban flights through Belarusian airspace, to suspend Belarus from ICAO and, in particular, to block BELAVIA from operating in and out of the UK and to suspend direct flights.
I was interested to hear the Foreign Secretary say he was considering how best to ramp up economic pressure on the regime. In the space of 12 months, the Lukashenko regime has stolen an election, employed brutal repression against its own people and hijacked a civilian airliner, yet fewer Belarusian entities are sanctioned now than were in 2012. Will the Foreign Secretary now bring forward sanctions against state-owned enterprises, some of which continue to have UK subsidiaries, such as BNK (UK)? What steps will he take to stop the Belarusian Government using the London stock exchange to raise finance and sustain Lukashenko’s grip on power? Will he ensure that the UK is no longer a soft touch for corrupt elites from Belarus or elsewhere seeking to store their funds and assets, and will he consider targeted sanctions against individuals such as Mikhail Gutseriyev?
Given the apparent presence of Belarusian KGB agents on the flight, will the Foreign Secretary tell us what assessment he has made of the threat to Belarusians in exile and what can be done to disrupt any Belarusian agents who may be operating in the UK, Europe and NATO allied countries?
Some of these things are easy, and others are much more difficult, but all of them are necessary to stand up for our values and to defend our national interest. If the Foreign Secretary chooses to take a stand on this matter, he can count on our support.
Dominic Raab
I thank the hon. Lady for her support for the measures that we have taken today. It is important that, so far as possible, subject to all the scrutiny, accountability and challenge expected, we show a united front in the face of such appalling acts by appalling regimes, of which the Lukashenko regime is one. I agree with her characterisation, as I did with that of my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat). The Lukashenko regime has done something that threatens not only the Belarusian people but attacks a common good, most notably by endangering a key tenet of the international system of civil aviation. That threat accrues to us all, and we must stand up against it.
The hon. Lady mentions sanctions. I am not sure that her numbers were quite right. For clarity, we have sanctioned 99 individuals and entities. That mix includes those sanctioned under the country-specific sanctions regime and the extra individuals that we sanctioned as a result of the global human rights sanctions regime that I introduced. On top of that, she will know that we have extended the Magnitsky sanctions regime to cover corruption and embezzlement and improprieties of that nature. She mentioned a couple of names. She will understand that we are evidence-based, but if she has evidence or thinks that there are individuals who should be designated, I encourage her to let us have that information.
Finally, the hon. Lady raises an important point. Clearly, there is now a threat not just to dissidents and journalists in Belarus who have the temerity to stand up to the regime, but to those who do so around the world. Through our global Media Freedom Coalition, in which we work very closely with the Canadians, and a whole range of other mechanisms internationally, it is important that we stand up for those freedoms and those individuals wherever they may be.
Rob Butler (Aylesbury) (Con)
The outrageous kidnapping of Mr Pratasevich has rightly received unqualified condemnation from across the House, but he is only the most recent in a despicably long list of opposition politicians and journalists who have been arrested or disappeared as part of Alexander Lukashenko’s latest appalling crackdown on legitimate opposition. Will my right hon. Friend tell the House what action he and the Government are taking to secure the release of all political prisoners in Belarus?
Dominic Raab
I know, because of my hon. Friend’s background, how particularly personal it is for him when he sees journalists arrested, detained or otherwise mistreated around the world. I agree with much of what he suggests, as I made clear in my opening answer. We are pouring in millions of pounds to support civil society and journalists in Belarus. From day one we have called for the release of all political prisoners. We did that when we first triggered the Moscow mechanism as part of the OSCE, and we continue to engage with leading democratic figures, including Mrs Tikhanovskaya.
Alyn Smith (Stirling) (SNP)
I warmly congratulate the Chair of the Foreign Affairs Committee on bringing this urgent issue to the House, and I warmly welcome the Foreign Secretary’s announcements about the overfly and the flights of Belavia. There has been a clear breach of articles 3 and 4 of the Chicago convention, and it is almost unimaginable that we have seen over the weekend a state hijacking of a civilian aircraft going between two EU and NATO capitals. This cannot stand.
We must work with our international allies. The Foreign Secretary will be aware that the European Council is meeting this evening. Will he commit to engaging with it and to mirror its agreed response, which obviously has not happened yet? Will he express further solidarity by giving practical aid to Belarusian activists, journalists and agitators and by making it easier for these brave individuals to claim asylum in the UK? What assessment has his Department made of Russian involvement in this action? It seems inconceivable that this could have been a unilateral act by Minsk. There was surely some Russian involvement. Will there be consequences for the Russian state as well as the Belarusian state when things are decided?
Dominic Raab
I thank the hon. Gentleman for his support for the statement and the measures. He referred to breaches of the Chicago convention, and I agree that they are striking and shocking. He also asked what co-ordination we are engaged in with our EU partners. Notwithstanding our departure from the EU, this is a very good example of the key foreign policy issues on which we will want to co-ordinate very carefully with it. We have done that before. He will recall that, after the rigged election, we led the way, but co-ordinated closely with our European partners, when we imposed Magnitsky sanctions.
Finally, the hon. Gentleman asked about Russian involvement. We do not have any clear details on that. I will be careful what I say at this point. As he says, it is difficult to believe that this kind of action could have been taken without at least the acquiescence of the authorities in Moscow, but, as I say, that is unclear as yet.
Mrs Maria Miller (Basingstoke) (Con) [V]
I welcome my right hon. Friend’s statement because the events yesterday, as others have said, were effectively the state hijacking of a commercial passenger plane. This is just another episode in Lukashenko’s campaign to silence opposition to his regime, both within and beyond the Belarusian borders. There is no room for such behaviour anywhere in the world, let alone in Europe.
My right hon. Friend has set out the immediate action that he is taking, but what is he doing to support a peaceful transition to a democratically elected head of state in Belarus? When will he meet Svetlana Tikhanovskaya, the opposition leader in Belarus?
Dominic Raab
I commend my right hon. Friend for raising the issue so tenaciously, as she always does. I have had positive discussion with opposition leader Svetlana Tikhanovskaya, whom I spoke to in February. The Europe Minister, my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), has also spoken to her. We will continue that engagement, which is very important. We make the case for free and fair elections as soon as possible according to international standards. We certainly support, as we did at the outset, not just the Moscow mechanism, but the implementation of Professor Benedek’s recommendations on the need for elections and his findings in relation to human rights abuses.
My right hon. Friend asks the key question, which is how we can go from sanctions supporting civil society to encouraging some form of democratic transition. I have to say that the Lukashenko regime looks very dug in. It has the protective umbrella from Moscow and I think that what we saw over the weekend was a symptom and a sign of it. I think it incumbent on the international community to keep up the very robust pressure as far as we can, increase it wherever we can and use every mechanism at our disposal. The key difference from what we have seen previously is that the actions of the Lukashenko regime are targeted not just at its own people, but at attacking an international common good that is reflected in the Chicago convention. That gives us at least the ability, with our allies, to work to apply pressure in that forum. We will continue to do that.
Tony Lloyd (Rochdale) (Lab) [V]
It is not surprising that the Lukashenko regime operates with a belief in its impunity, but this state piracy is most definitely a new step that requires a response that is seen to be proportionate. In that context, could the Foreign Secretary return to the question of the Belarus state’s use of subsidiary companies operating in the United Kingdom and whether we can apply pressure on them to prevent the state from having access to resources that come through this country of ours? In doing so, can we co-ordinate with our European Union allies? That is something that the Belarusian opposition most certainly wants to see: tough action against a leader who has lost all credibility and legitimacy.
Dominic Raab
I totally agree with the hon. Gentleman’s instincts. I am not sure that it is correct that there are businesses taking advantage, but I reassure him that amid the panoply of measures that we are now considering, we will look very carefully at what further pressure we can apply. That will include any further tightening of restrictions on access to the UK or other financial markets for what we see passing through London.
John Howell (Henley) (Con)
Today I issued a media statement on behalf of the entire UK delegation to the Council of Europe condemning the actions of the Belarusian Government and of President Lukashenko. We call for the immediate release of Raman Pratasevich and all political prisoners in the country. Some of us have already befriended such prisoners to provide them with hope and comfort. Is it not time to consider that an international warrant should be issued for the arrest of President Lukashenko on charges of terrorism?
Dominic Raab
To mount a case of that nature, we would need quite specific and clear evidence; of course, that is for the Crown Prosecution Service and other law enforcement authorities to consider. I commend my hon. Friend: among the international bodies that we must press to hold the Lukashenko regime to account, I did not mention the Council of Europe, but although Belarus is not a party to it, it is an important European forum for us to apply pressure among the wider European international community. I commend him and the UK delegation for all the work that they are doing.
Layla Moran (Oxford West and Abingdon) (LD) [V]
May I begin by joining those who are welcoming the Foreign Secretary’s statement and the actions taken so far? From the violent crackdowns on protestors last summer, to the terrible repression of journalists, which of course has now escalated to state-sponsored air piracy that has put civilians at risk, it is clear that the Belarusian authorities have no regard for democracy, human rights or the rule of law. They act with impunity because they know Russia has their back. Although we would all love to believe that this will be the last we hear of this, we all know that that is unlikely. The UK hosts the G7 soon, which is an opportunity to raise the issue of the events in Belarus and co-ordinate further international action, so will the Foreign Secretary consider putting Belarus on the agenda of the G7?
Dominic Raab
We are already doing it, but the hon. Lady is right to say that the G7, amid the other forums, is where something like this should be considered, not least because of the attack on the international system, via the Chicago convention, and ICAO.
Dr Liam Fox (North Somerset) (Con)
This is not just a state-sponsored hijack of a civilian aircraft going between two NATO capitals; we know from the Belarus media that it was ordered by Lukashenko himself. This is an international crime that requires the strongest response, and although I welcome the stopping of overflight and a UK lead on this, increasingly both Belarus and Russia do not care what the international community thinks. Therefore, all our allies need to act in synchrony, including some of the weakest links, or tyrannies all over the world will see that air passengers are increasingly put at risk.
Dominic Raab
I agree with my right hon. Friend’s instincts. I was in Estonia and then Oslo recently, precisely because of the importance among our Nordic and Baltic partners—key NATO allies—of strengthening and reinforcing the stance they take in relation both to Russia and to the emanation of those threats that we have seen in Ukraine and now in Belarus.
Christian Matheson (City of Chester) (Lab)
I welcome this statement on what was clearly an act of piracy by an illegitimate Government that puts them firmly in the rogue nations bracket. Does the Foreign Secretary share my concern that this now becomes a tactic that these rogue nations may use again, unless there is a firm response? No air crew could ignore a threat of a bomb or some other threat to their aircraft, and would have to divert to the nearest airfield. This is putting at risk not only this flight, but potentially many more and the safety of their passengers, unless we can come down much harder on the perpetrators.
Dominic Raab
The hon. Gentleman is absolutely right, which is why we have taken the actions we need to take in relation to flights to and from the UK, and why we have called for an urgent meeting of the ICAO Council to address these issues in the most appropriate forum. However, let us face it: this also represents a threat to international security. That is why we have raised the issue in the United Nations Security Council.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
I welcome the Foreign Secretary’s statement and thank my hon. Friend the Member for Henley (John Howell) for the excellent work he is doing in the Council of Europe. Does the Foreign Secretary agree that Lukashenko must accept that his recent actions are a step too far and that the only way forward for Belarus is for the dictator to halt his campaign of oppression, release political prisoners and hold free and fair elections with international observers?
Dominic Raab
My hon. Friend is absolutely right; I agree with that list. Ultimately, it is difficult to see how Belarus, under the Lukashenko regime, can take any steps out of its pariah status unless those things happen, including free and fair elections, which would inevitably lead to a change of leadership.
Dame Diana Johnson (Kingston upon Hull North) (Lab) [V]
The European Federation of Journalists has called this kidnapping from a civilian airline an
“act of air piracy and state terrorism.”
It is difficult to disagree. As we know, basic freedoms and human rights are being eroded in Belarus, where 29 journalists are now detained. Along with having the most robust and effective sanctions targeting this rogue regime, what action will the Foreign Secretary be taking to investigate the possible involvement of other states in this criminal incident?
Dominic Raab
The right hon. Lady is absolutely right that sanctions are a part of the strategic approach, but not the only aspect that we need to look at. We will, of course, look carefully at the involvement of anyone else, although gleaning evidential standards of information is often very difficult. As I mentioned before, we are supporting civil society in Belarus with an additional £1.5 million programme of support over the next two years. In March this year, we allocated a further almost £2 million of support for the media in Belarus. We need to use every lever at our disposal not just to put pressure on the regime, but to try to glean the answers to some of the questions that she rightly raises.
Dr Julian Lewis (New Forest East) (Con)
May I underline what the Chair of the Foreign Affairs Committee said about the dangers of the Nord Stream 2 pipeline in this context? When adopting this aerial adaptation from the Putin playbook of how to deal with dissidents, Lukashenko was clearly expecting an outcry, but already we are hearing suggestions that we must not be too harsh against Belarus, otherwise we will be driving him further into the Russian embrace. Will the Foreign Secretary ensure that no such argument of appeasement will be accepted by him and his fellow Ministers?
Dominic Raab
I can give my right hon. Friend exactly that assurance. The fact is that Lukashenko is already ensconced in the embrace of Moscow. The question is how we can prise the leadership away from that. It must be a mixture of the pressure for which my right hon. Friend and the Chair of the Foreign Affairs Committee rightly call, and a willingness to have the door of diplomacy left ajar should more pragmatic voices within that regime be willing to take positive steps forward. Ultimately, those steps must end in free and fair elections; that is what the OSCE investigations have called for and that is what the UK will stand for.
Patricia Gibson (North Ayrshire and Arran) (SNP)
We can all agree that the most robust international response to this shocking act of aviation piracy is essential, otherwise Lukashenko’s methods could embolden other despots in the view that democratic nations lack the will to back up their outrage with meaningful action. As well as the co-ordinated international action against Belarus that the Secretary of State has spoken about today, what other support does he think can be offered to protect and assist human rights defenders in Belarus?
Dominic Raab
The hon. Lady asks a timely question. In reality, we have a number of levers, but let us not pretend that they are a silver bullet. We have provided and are continuing to provide support for civil society, media freedoms and media organisations. We apply the Magnitsky human rights sanctions, so there is pressure, and we hold to account those who persecute protestors, political figures or journalists. We raise the matter in every international forum we can—from the Human Rights Council to the United Nations Security Council—and we will use our presidency of the G7 to keep the flame of freedom burning for those poor souls who are in detention, whether they are journalists or political figures.
Ms Nusrat Ghani (Wealden) (Con)
I congratulate my constituency neighbour, the Chair the Foreign Affairs Committee, on securing this urgent question. I welcome the Foreign Secretary’s very swift statements on how to respond to this hijacking, but I want to push him a little bit further. I am anxious that the tactics used recently will encourage other curious countries. What confidence can the Foreign Secretary give to journalists, activists or other individuals who are sanctioned for spurious reasons, in case their lives may now be under threat; what work can be done to strengthen western allies to ensure that their safety is met?
With your indulgence, Mr Speaker—piracy has been mentioned a few times and as the previous Maritime Minister, I cannot let this point go. Does the Foreign Secretary agree that the tactics that have played out may encourage countries such as China, which claims sovereignty over the whole South China sea? A third of the world’s maritime trade crosses through those waters, and if China could claim the right to intercept any ship or any plane crossing over the South China sea—
Mr Speaker
Order. I allowed the hon. Lady a little latitude, but I think it is a bit much to take complete control of the debate; we want short questions.
Dominic Raab
My hon. Friend is understandably worried about the wider international implications of this action. One of the things we discussed at the G7 meeting of Foreign Ministers was the importance not only of addressing these issues country by country but of the thematic protection of the international order. I have already mentioned the coalition for media freedom; on top of that we discussed support for the other Canadian-inspired initiative to counter the arbitrary detention of nationals or, indeed, dual nationals abroad—I am thinking in relation to Iran, but also more generally. On top of that, I hope the House knows that in March we launched the international accountability platform on Belarus to collect, verify and store evidence of human rights violations. That initiative was led by Britain, Denmark and Germany, a total of 20 states support it and we have provided money for it. That allows us to gather the evidence not just to call out abuses but, as some have mentioned, to pave the way for prosecutions when that is feasible in due course.
Cat Smith (Lancaster and Fleetwood) (Lab)
Does the Foreign Secretary recognise the criticism by many in the Belarusian diaspora that the response to last year’s stolen elections was too soft? Will he get tough by imposing sanctions on Belarusian individuals and companies, including the UK arm of the state oil company, BNK UK Ltd?
Dominic Raab
I think we all want to stand up for the same issue. I have spoken to a range of the key figures and that is not the feedback we have had, at least in terms of the UK response. We engaged very swiftly—before the EU, in fact—after the rigged election and imposed sanctions on 99 individuals in total, if we include not only the Belarusian regime but the Magnitsky sanctions that we imposed. I take the hon. Lady’s broader point. It is a question not of tit-for-tat but of making sure that we exercise every potential due diligence to stand up and hold to account those who violate people’s human rights and—I think this was the hon. Lady’s point—making sure that we seal every crack so that there is no possibility of businesses linked to the regime making money in this country.
Chris Bryant (Rhondda) (Lab)
There is no doubt that Belarus is now a rogue state. Lukashenko is a criminal, and I hope that eventually he will spend many years in prison. I celebrate the phenomenal courage of the politicians, activists, ordinary members of the public and, of course, journalists, who have made sacrifices that none of us in the UK would ever even dream of having to make. I have a terrible fear that every time we discuss these authoritarian regimes and issue another statement, we are basically throwing another snowball into a river. When are we actually going to take serious measures to make sure that these things do not go unpunished?
Dominic Raab
I have campaigned on these issues with the hon. Gentleman for many years and he is always an eloquent, powerful, tenacious and articulate advocate. I am not quite sure what action we could take that he thought we should take, but I am open to all suggestions, in a spirit of openness, and we need to marshal all our resources. One issue that I have not mentioned is that we are one of the largest shareholders in the European Bank for Reconstruction and Development and—I say this for completeness—we fully support its announcement that it will no longer support Belarusian sovereign funds. I accept the argument that we need to look at every possible lever, but, as the hon. Gentleman alluded to and implied, that is not easy when a regime is as dug in as the Lukashenko regime so clearly is.
Christian Wakeford (Bury South) (Con)
I thank my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) for securing the urgent question and the Foreign Secretary for his statement on this very serious attack on civil liberties and the free press. I welcome the sanctions that have already been imposed on the illegitimate Belarusian regime through the Government’s newly established global human rights scheme. Does my right hon. Friend agree that standing up for our values by imposing sanctions on human rights abusers such as Lukashenko must be a key part of global Britain’s new foreign policy approach?
Dominic Raab
It not only should be but is, as set out in the integrated review. We stand up for our values—the values of open trade and open societies, including human rights and democracy—and that means holding to account those who perpetrate violations, and standing up and keeping the flame of freedom alive for those poor souls who are languishing in jails, whether in Belarus or elsewhere around the world.
Sammy Wilson (East Antrim) (DUP)
There is no doubt that this was an act of air piracy designed to abduct a critic of the tyrannical Belarusian regime, and there is no doubt that the regime has been emboldened by the Russian regime’s law-breaking exercises around the world. It is important that the Secretary of State take every action, with every possible body, whether it is the EU, the G7, financial institutions or private investors—anyone who can hurt this regime—to send a message to it, and to any who would seek to copy it, that this behaviour will not be tolerated and there will be financial, personal and political consequences.
Dominic Raab
I share the right hon. Gentleman’s disgust and outrage. The Lukashenko regime is slipping further and further into pariah status. We will take every measure we can, whether at a diplomatic level, through sanctions or more broadly, to stand up for the values of human rights, particularly freedom of civil aviation, but also crucially to send a message around the world to others that this kind of behaviour will not be tolerated.
Damian Collins (Folkestone and Hythe) (Con) [V]
The kidnapping of Roman Protasevich is the worst example of what has been a systematic campaign by the Belarusian Government against journalists. Last year there were 480 detentions of journalists, who spent more than 1,200 days behind bars, and at least 62 cases of physical violence against them. Does my right hon. Friend agree that we need to send a strong message to Belarus and other repressive regimes that this is an attack on democracy and legitimate free speech that will not be tolerated?
Dominic Raab
I totally agree with my hon. Friend. We raised precisely this kind of systematic attack at the G7 Foreign Ministers meeting, and we will continue to do so.
Marion Fellows (Motherwell and Wishaw) (SNP) [V]
While we have a long-standing position of challenging the results of Lukashenko’s fraudulent election win last year, we have to be honest and say that this case is a departure from these entrenched disagreements and represents a direct attack on the citizens of our EU allies and on international law. Given that plain reality, it is right that sanctions up to and including the freezing of Belarusian state funds are effected, but what new measures will the Government consider for granting asylum to those supressed by the Lukashenko regime?
Dominic Raab
Asylum has been raised already. The criteria in the asylum regime are reflective of international law and are fit for purpose. The evidence of this regime’s despicable actions means that those who want to apply for asylum in this country are able to do so and will get the fair hearing and due process that our system allows.
Huw Merriman (Bexhill and Battle) (Con)
The Foreign Secretary is quite right to call for the International Civil Aviation Organisation to take action. Given that its aim is to sit at the centre of a system of safety and security standards for its 193 members and given that Belarus is a member, will he call for ICAO to look at Belarus’s continued membership of such an esteemed international organisations?
Dominic Raab
I certainly agree that ICAO must discharge its duties. This is a dramatic but seminal moment for it to stand up for the values that we are all trying to safeguard in relation to civil aviation. We will look very closely with our partners at the mechanisms and levers available to us within ICAO and will take as rigorous and robust an approach as we can.
Claire Hanna (Belfast South) (SDLP) [V]
The SDLP and I condemn in the strongest possible terms the actions of the Belarusian Government and echo what others have said about the importance of sanctions and of holding Lukashenko and his Russian protectors to account. This is the latest attack in recent years on journalistic freedom, including the horrific murder of Jamal Khashoggi, the imprisonment of Nazanin Zaghari-Ratcliffe on entirely trumped-up charges and, closer to home, intimidation of journalists here in Northern Ireland by paramilitaries. What action are the Secretary of State and his Department taking to co-operate with other countries committed to a free press to uphold the rights of journalists and to challenge attacks on freedom of speech and journalistic integrity?
Dominic Raab
The hon. Lady raises a great point, which is that in order to exert positive influence we have to co-ordinate with our allies, so we need to broaden the group of like-minded countries willing to take that action. She can see the evidence of the initiatives we are engaged in, through the media freedom coalition, which advises states on how to strengthen legislation to protect journalists, and the financial support we give to journalists who find themselves detained. More broadly, one of the things we discussed at the most recent G7 Foreign Ministers meeting was the arbitrary detention mechanism, which effectively says that when one or other of us in that mechanism finds one of our nationals or dual nationals arbitrarily detained, we all démarche and take action to try to secure their release.
Mr Tobias Ellwood (Bournemouth East) (Con)
Western flights continue to transit over this unpredictable airspace; I hope that the Foreign Secretary will make it clear that that needs to stop. For a European state to fake a terrorist threat shows how our international standards are being challenged. Other authoritarian states will be watching how the west responds—how resolute we are and how unified we are in our response. He listed a whole bunch of international organisations that will no doubt condemn what has happened, but will it affect Belarus’s behaviour? Will it change Lukashenko’s attitude? We need to make sure that we think bigger picture and recognise that a quarter of Belarus’s trade looks towards the west. I encourage the Foreign Secretary to make the changes that will affect Belarus’s behaviour in the longer term.
Dominic Raab
I thank my right hon. Friend, the Chair of the Defence Committee. I agree that we need to use every lever. I am not quite sure which specific one he thinks would be the decisive extra measure to bring Lukashenko to his senses, but I am very interested in continuing to talk to him about that. The reality is that Lukashenko becomes more and more reliant on Russia—I take the point that was made about that. We must not allow that to be a reason to ease up on the pressure, but we have to be realistic about how dug in Lukashenko is. We have ruled out nothing going forward. The most important thing is that we try to carry a broader group of international partners, and the reason that that is particular germane in this case is that the International Civil Aviation Organization and the Chicago convention represent an international public good.
Clive Efford (Eltham) (Lab) [V]
I am delighted to hear the Foreign Secretary say that the Government will take a very tough response to this act of air piracy. Does the Foreign Secretary detect any sense of reticence from his counterparts in other countries in their response and any suggestion from them that we should take a softer approach to win round the Belarussian regime?
Dominic Raab
I thank the hon. Gentleman for his support. There will always be different views across the European family and I would be a bit reluctant about advertising that to Minsk or Moscow, for obvious reasons. What I would say is that we are in the business of supporting some of the most vulnerable of our European partners. That is why I was out in Estonia to talk to the Baltic three and I went to Oslo to talk to the Nordic five. I invited all of them back to the UK, to be hosted at Chevening, because I think that the support that we provide to that periphery of the European neighbourhood is absolutely crucial to supporting fellow NATO and European allies and to the message that we send not just to Minsk and Moscow, but around the world, as hon. Members have said.
Mr Mark Harper (Forest of Dean) (Con)
I am grateful to the Chair of the Foreign Affairs Committee, my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), for applying for this urgent question and to you, Mr Speaker, for granting it. It has been clear that both sides of the House are united behind the actions that the Foreign Secretary has taken already on behalf of the British Government. May I say to him that in order to make sure that this does not happen again, as a result of the Belarussian Government or anyone else, the price paid by that Government must be sufficiently high? Also, what work is under way to look at other countries—the sorts of countries that might be tempted to do such things—to see whether there is any pre-emptive action that we might need to take to make sure that British people flying around the world are kept safe and that no others are put at risk by that sort of behaviour from this state or any other?
Dominic Raab
My right hon. Friend raises a very important point. First, we will use all the sanctions—all the levers—that we have at our disposal. We are conscious, as we have discussed and as others have said, of the extent of increasing reliance on Russia, but that cannot be a reason for us not to take the action we take. This is unique; I cannot remember as far back as the ’70s there being a1an analogous case. It is very rare. Sometimes actions are taken more through cock-up than conspiracy—sometimes very tragically when aircraft are shot down—but I cannot think of a precedent for this kind of rather calculated and conniving approach, with the MiG jet and the bomb hoax. My right hon. Friend is right to reinforce, as others have done, the deterrent effect of how we respond to this specific, isolated incident.
Mr Alistair Carmichael (Orkney and Shetland) (LD) [V]
I welcome the very robust political and diplomatic stance that the Government are taking, but this case is more than that. This is a potential human tragedy as well, with Roman Protasevich now in detention and possibly ultimately facing the death penalty. I know, having campaigned in different parts of the world, that consular and embassy staff are very effective in the way in which they deploy their resources in supporting people campaigning against the use of the death penalty. Can the Foreign Secretary give me some assurance that everything that can be done to keep this case in the public eye will be done, within the confines of their role in country?
Dominic Raab
I thank the right hon. Gentleman, and I totally agree with him. We must do everything we can to signal that, as outrageous it is what they have already done, it would be a further step into pariah status if the death penalty were to be applied. I thank him for what he said about consular officers. They relate to and provide services to British nationals and dual nationals abroad, but none the less, the broader point he makes about diplomatically keeping the pressure on and doing everything we can to avoid the death penalty is very important in this debate.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I congratulate my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), the Chair of the Foreign Affairs Committee, and my right hon. Friend the Member for New Forest East (Dr Lewis) on mentioning the Nord Stream 2 pipeline. Bearing in mind that Lukashenko does not do anything without the authority of Moscow, their comments are particularly relevant to this debate. May I ask the Foreign Secretary what additional steps he is going to take against President Lukashenko? We already know that certain sanctions are in place against him and his cronies. Is there anything else that the Foreign Secretary can do specifically about additional British sanctions on this dictator?
Dominic Raab
Yes, we will look at the panoply of sanctions on individuals. On sectoral sanctions, we will co-ordinate with our partners as to whether those are appropriate. We will take action in ICAO in the way that we have described, because of the importance of securing civil aviation, but we will also raise this issue in the United Nations Security Council because of the threat it poses more broadly to international peace and stability.
Dave Doogan (Angus) (SNP)
As an aircraft engineer and student of international relations, I am perhaps especially outraged by this brazen assault on international norms and the deliberate endangering of an aircraft by means of military force. For Lukashenko to have deployed the apparatus of the state to effect an act of vengeful piracy against flight FR4978 rides roughshod over the international system and cannot, as the Secretary of State has outlined, go unchallenged. Will he therefore commit the UK, and underline the UK’s role within an international coalition, to effecting the utmost in sanctions, including the freezing of assets against the Lukashenko regime? Does he agree that if the international community is now looking on aghast at a step change in delinquency by a state actor, should not people who are thinking of mirroring that also look on aghast at the consequences that the international community puts out?
Dominic Raab
The hon. Gentleman is right about the action we take and the deterrent effect it has. He mentioned asset freezes; asset freezes in relation to 99 individuals and entities are already in place, but we will, as I have already said, look right across the full range to see what further action we should take and look to work very closely with our international allies about which options to take forward.
Mr Speaker
Order. I am suspending the House for the necessary arrangements to be made.
BBC: Dyson Report
(3 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Julian Knight (Solihull) (Con) (Urgent Question)
To ask the Secretary of State for Digital, Culture, Media and Sport if he will make a statement on the findings of Lord Dyson’s report into the BBC.
The Minister for Media and Data (Mr John Whittingdale)
Lord Dyson’s report makes shocking reading. It details not just an appalling failure to uphold basic journalistic standards but an unwillingness to investigate complaints and to discover the truth. That these failures occurred at our national broadcaster is an even greater source of shame. The new leadership at the BBC deserve credit for setting up an independent inquiry and for accepting its findings in full. However, the reputation of the BBC—its most precious asset—has been badly tarnished, and it is right that the BBC board and wider leadership now consider urgently how confidence and trust in the corporation can be restored.
It is not for the Government to interfere in editorial decisions, but it is the job of Government to ensure that there is a strong and robust system of governance at the BBC with effective external oversight. It was to deliver that that we made fundamental changes when the BBC’s charter was renewed in 2015-16. Since then, the BBC Trust has been replaced by a more powerful board with an external regulator, Ofcom, responsible for overseeing the BBC’s content and being the ultimate adjudicator of complaints. We also made provision at that time for a mid-term review by the Government to ensure that the new governance arrangements were working effectively. That review is due next year but work on it will start now. In particular, we will wish to be satisfied that the failures that have been identified could not have occurred if the new governance arrangements had been in place. The BBC board has also announced today its own review, led by the senior independent director and two non-executive members, of the BBC’s editorial guidelines and standards committee. That review will examine editorial oversight, the robustness and independence of whistleblowing processes, and the wider culture within the BBC. It will take independent expert advice and will report by September.
In an era of fake news and disinformation, the need for public service broadcasting and trusted journalism has never been stronger. The BBC has been, and should be, a beacon setting standards to which others can aspire, but it has fallen short so badly and has damaged its reputation both here and across the world. The BBC now needs urgently to demonstrate that these failings have been addressed and that this can never happen again.
Julian Knight [V]
Lord Dyson’s report was utterly damning. Put simply, Mr Bashir has obtained fame and fortune by instituting document forgery and callously scaring a mentally vulnerable woman—not a mistake, as he claims in The Sunday Times, but something with more than a whiff of criminality about it. The BBC then covered this up, blackballing whistleblowers and ensuring that its own reporters did not report on Bashir. But it did not stop there. The BBC rehired Bashir, who it knew was a liar, promoted him, and, extraordinarily for the BBC, allowed him to moonlight for its main commercial rival. Mr Munro, head of news gathering, greeted Bashir’s return by citing his excellent
“track record in enterprising journalism”.
My sources suggest that Mr Bashir was not interviewed, but simply appointed—hardly a highly competitive process.
Does the Minister agree that Dyson leaves still more unanswered questions? Who precisely was involved in the 25-year cover-up and instituted the action against whistleblowers? Was Bashir rehired, in essence, so that he would keep his mouth shut? Did Lord Hall make the decision to rehire Bashir, or was that in fact Mr Munro?
Finally, the BBC has announced a review into some of those matters, and into how robust its current practices are. Does the Minister agree that a good starting point would be to ensure that the investigating panel is diverse? As yet, no women are included, which is ironic considering that the victim of Mr Bashir was a woman. Should whistleblowers be compensated, and the matter of BBC culture be considered, including the “us and them” between management and reporters, and the kowtowing to so-called “talent”, at the expense of the BBC’s own editorial guidelines? Does the Minister share my alarm that Mr Davie has recently removed the sole voice for editorial policy on the BBC’s executive committee? What does he see as the long-term implications for the BBC charter.
Mr Whittingdale
I congratulate my hon. Friend on his urgent question. He maintains the fine tradition of the Digital, Culture, Media and Sport Committee asking probing and incisive questions. The questions he raises are valid. The process by which Martin Bashir was recruited to return to the BBC, and his subsequent resignation a couple of weeks ago, are matters that the director-general is investigating urgently, and I expect him to provide a fuller account of exactly what happened shortly. I know my hon. Friend will want to examine the BBC on that question, and indeed on the other valid questions that he raised about the composition of the panel, its diversity, and the protection in place for whistleblowing. Those important questions need to be addressed, and I am sure that my hon. Friend and the Committee will do that.
Jo Stevens (Cardiff Central) (Lab) [V]
I thank the hon. Member for Solihull (Julian Knight) for securing this urgent question, and the Minister for his response. I also echo the many expressions of deep concern about the actions of Martin Bashir 25 years ago, and the deception he used to secure the interview with Diana, Princess of Wales. The understandable hurt and pain expressed by Princes William and Harry has been deeply moving. The methods used by Mr Bashir were unethical and wrong, and clearly he should not have been re-employed by the BBC in 2016. The internal inquiry by the BBC into the interview was wholly inadequate.
It was right that Lord Dyson conducted this inquiry, and his findings are stark. The fact that the interview was obtained 25 years ago does not minimise the damage caused, and it is right that the BBC director-general has given an unequivocal apology. The onus is now on him to explain whether he considers that changes to the governance of the BBC in those 25 years mean that something like this could not happen again. I welcome the announcement of the review by the BBC board, its terms of reference, and the timescale to which it will report.
However, in among some of the commentary on the BBC that we have heard over the past few days, we must remember that the BBC is bigger than just Martin Bashir. It is bigger than “Panorama”, bigger than other programmes, and even bigger than the current affairs department. The BBC is one of the most trusted sources of news in the world, at a time when trusted sources are more important than ever before. The Secretary of State said in The Times today that he would not be having a knee-jerk reaction to this incident, and I welcome that commitment. The new director-general, and the chair of the BBC, whose appointments were welcomed by the Government, have been in post for less than a year. They need to be given time to make the reforms they have promised. The mid-term review is an important chance to take stock, but we must be clear exactly what problems any governance reforms will solve, and keep the issue of funding the BBC separate from its editorial control.
Mr Whittingdale
I thank the hon. Lady, and I agree with very much—indeed, almost everything—she said. On the governance of the BBC, as I said earlier, fundamental changes were made a few years ago, which we believe would have meant that somebody who wished to blow the whistle in the way that took place would have been listened to, and they would have had recourse to Ofcom if they were dissatisfied with the BBC. We must be absolutely sure that the new governance arrangements work properly, and there may well be need for further editorial oversight. That is what the BBC’s review is designed to reveal. However, I share her view about the importance of trust in the BBC. The mid-term review will be carefully conducted; we will not rush into any changes. Finally, I can confirm to the hon. Lady that the question of funding of the BBC is a separate one and that the licence fee—while it will be subject to debate, I have no doubt, in the coming years—is in place until the end of this charter in 2027.
Sir Peter Bottomley (Worthing West) (Con)
May I say to my right hon. Friend that he acted properly, in 2015, when he appointed Sir David Clementi to review the BBC? The Government were right to accept Sir David Clementi’s recommendations, which came only a few months later, putting right the absurd arrangements made in 2007 that left the BBC without a chair and led to all kinds of confusion.
May I also say to my right hon. Friend that the BBC is a beacon? Things did go wrong—by Martin Bashir, the double reviewing of what he had done and in his further reappointment back to the BBC; that is incontrovertible. But what should also be clear to the Government is that if we start attacking the BBC, we will throw out much more than we have, and if the choice is between the state broadcasting corporation—the BBC—or the United States, people in this country would rightly choose the BBC.
Mr Whittingdale
I must thank my hon. Friend for his words. He is absolutely right that the previous governance arrangements were deeply flawed, and Sir David Clementi, who conducted the review and then went on to become chair of the BBC, put in place a much stronger governance system, with both a stronger internal management board and external oversight, and we do believe that that would have been much more effective if it had been in place when some of the events we are debating took place. I also absolutely agree with my hon. Friend about the importance of the BBC. We have just heard a statement from my right hon Friend the Foreign Secretary about a country where public service broadcasting is not free, fair or independent. The BBC is a beacon of those things, and we are determined to strengthen it and to restore trust in it across the world.
John Nicolson (Ochil and South Perthshire) (SNP) [V]
The BBC has questions to answer about its cover-up culture. Why did Director-General Tony Hall bring back Martin Bashir only five years ago as religion correspondent, given that he knew he had lied over the process used to secure the Princess Diana documentary? Who else was involved in the recruitment? Was Lord Hall warned that he would be dismissed if Lord Dyson’s conclusions were as critical of his behaviour as they were? What effect, if any, will Lord Hall’s behaviour have on his retirement package? Why was Martin Bashir allowed to resign rather than be sacked? The treatment of Matt Wiessler has been unforgivably cruel. Will the BBC now offer him an apology and a financial settlement? Whistleblowers should never again be punished, as happened to those on “Panorama” who say that their careers were blighted under Lord Hall after asking uncomfortable questions. Regaining trust will now need to be a top priority. The BBC board should be strengthened with independently-minded members with journalistic experience. The ongoing cover-up culture at the BBC is long standing and must now be addressed.
Mr Whittingdale
The hon. Gentleman speaks with experience, as a former employee of the BBC, and he raises extremely valid questions. As I say, the BBC is conducting an urgent investigation into the circumstances of the employment of Martin Bashir, but if questions remain following that, I have no doubt that the hon. Gentleman, as a member of the Select Committee, will not be reticent in putting them to the BBC.
Sir William Cash (Stone) (Con) [V]
Will my right hon. Friend make it clear that both the BBC and Ofcom must understand that, following next year’s mid-term review, the Government propose to vary the charter and to make the guidelines, impartiality rules and complaints procedures subject to parliamentary approval, without any so-called independent editorial standards board, which is the same old BBC dodge of waiting until things die down and then carrying on as before that we witnessed after the Jimmy Savile affair in relation to whistleblowing, when it committed to deal with it, and it did not?
Mr Whittingdale
I do not want to pre-empt either the BBC’s review of editorial oversight or the mid-term review, which we are only just beginning to work on, but my hon. Friend makes some extremely valid points. We placed impartiality in the first line of the BBC’s public purposes at the time of charter renewal, and we will wish to be satisfied that the BBC is delivering that, but I know that the new chair and the director-general take that very seriously.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab) [V]
All over the world, people are appalled by the dishonesty and cruelty of the way Martin Bashir secured his interview with a very vulnerable Princess Diana 25 years ago. It is right that the BBC itself reviews again its editorial practices and how Martin Bashir came to be employed, but does the Minister appreciate that it remains a very valued national institution, both here and overseas? There is concern that long-standing enemies of the BBC are using the Bashir scandal to attack, defund and potentially dismantle our national broadcaster.
Mr Whittingdale
I absolutely assure the right hon. Lady that there is no question of dismantling or defunding the BBC. It is a priceless national asset, and one of the most serious consequences of the revelations of the past week is that its reputation and trust in it have been badly damaged. It is essential that it retains its position as the most trusted and reliable broadcaster in the world, and there is work to be done to restore that reputation.
Alun Cairns (Vale of Glamorgan) (Con)
The BBC has seen a string of public scandals, from Jimmy Savile to the treatment of Lord McAlpine, Sir Cliff Richard and many others. All have stemmed from a drive to secure sensationalist media headlines, along with groupthink and a “we know best” approach. The BBC’s capacity to scrutinise, investigate and report on itself is in tatters, which is particularly worrying considering its huge resource, how it seeks to dominate the news space and its lack of transparency. Does my right hon. Friend agree that reform is needed, not only in the specific areas that Lord Dyson has pointed to, but of its culture, transparency and whether its dominance is undermining news plurality?
Mr Whittingdale
I agree with my right hon. Friend. He is entirely right that this is not a one-off incident. There have been dreadful failings by the BBC in its journalism in recent years, and he mentioned three of them. I would say that all of those happened before the new charter was put in place, but we need to assess the effectiveness of the charter to ensure it is properly working, and that is something that we will start work on straightaway.
Graham Stringer (Blackley and Broughton) (Lab)
David Plowright, the chair and managing director of Granada Television in its great days, used to say regularly that he needed the BBC to keep the commercial sector honest. If the BBC cannot keep itself honest, we are in real trouble. Does the Minister agree that the changes at the BBC need to go beyond governance, structure and procedure, into a deep cultural change? How would he go about supporting that change?
Mr Whittingdale
I very much agree with the hon. Gentleman. Indeed, my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns) made the same point immediately before him. It is right that the BBC investigates the precise circumstances that led to Martin Bashir’s interview and the subsequent failure to investigate properly the complaints, but it goes wider than that. It is a question of culture. We are determined that the BBC should be properly reflective of the diversity of sex, race, thought and geography. In the future, it must not just be made up of people who pat themselves on the back and turn a blind eye when accusations are made. Fundamental reform is needed, but I am assured that the new management recognises that and is determined to address it.
Sir Edward Leigh (Gainsborough) (Con)
When are we going to have the guts to stop the BBC criminalising people for non-payment of the licence fee, which is no better than the poll tax?
Mr Whittingdale
I understand my right hon. Friend’s strength of feeling. As he will know, we have now twice examined whether non-payment of the licence fee should be decriminalised, but this has revealed that if we decriminalise, there is a risk that the alternative enforcement mechanisms would lead to more distress for people who are perhaps not in a position to pay, with the possibility of bailiffs arriving and even greater fines. So we need to look at this very carefully. As we have said, we have not ruled out decriminalisation, but we are balancing that against the consequences of the alternatives, and that is something that the Government will continue to examine.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) [V]
As the House is aware, I am a Scottish politician. During the 2014 Scottish independence referendum, the BBC came under strong and sustained attack from the then First Minister, Mr Alex Salmond, a gentleman who now broadcasts on Russian television and refuses to acknowledge the enormity of the crime that was committed in Salisbury. I wonder, does the Minister agree that in the long term the editorial independence of the BBC and its protection from undue interference by politicians are paramount?
Mr Whittingdale
I do agree with the hon. Gentleman. The independence of the BBC is absolutely central to its reputation for objectivity and reliability, and indeed it contrasts strongly with the channel that he also mentioned, RT, which has none of those things. We are absolutely committed to maintaining and indeed strengthening the independence, objectivity and fairness of the BBC.
Suzanne Webb (Stourbridge) (Con)
My constituents in Stourbridge value the importance of public service broadcasting and a free press, as do I. Does my right hon. Friend agree that the BBC needs to improve its culture with a new emphasis on accuracy, impartiality and diversity of opinion, to ensure that the failures highlighted by Lord Dyson’s report can never happen again?
Mr Whittingdale
I do agree with my hon. Friend. She is absolutely right to say that it is those qualities of accuracy, impartiality and fairness that are admired around the world as being as being represented by the BBC. That is why the revelations in the Dyson report are so damaging, because they cast doubt on those things. I can assure her that not just the Government but, I believe, the BBC are absolutely conscious of that and determined to put it right.
Kevin Brennan (Cardiff West) (Lab)
I welcome, in general, the tone that the Minister has adopted today in response to this. He said in his statement that
“the need for public service broadcasting and trusted journalism has never been stronger.”
He is absolutely right about that. That was also the conclusion of our Select Committee, the Digital, Culture, Media and Sport Committee, when we recently reported on the future of public service broadcasting. This is an example of an era of journalism that was infected with a poisonous culture which unfortunately, in this case, spread to the BBC, which should have been displaying different kinds of values in its journalism. I just want to read a short quote from the National Union of Journalists parliamentary group, which said in its statement:
“It’s important for us also to reiterate that the BBC is not its management, past”—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Is the hon. Gentleman coming to a question?
Kevin Brennan
With your indulgence, Madam Deputy Speaker, and I apologise.
“It’s important for us to also reiterate that the BBC is not its management, past or present. The BBC and the values and principles of public service broadcasting it personifies is in fact our members, and all its staff, who do the work that makes the corporation an entity that is valued at home and throughout the world.”
Does the Minister agree with that statement?
Mr Whittingdale
I do agree with that statement. There is no question but that the challenge posed by fake news and disinformation, which are circulating at a level we have never previously seen, makes it all the more important that there are trustworthy, reliable places where one can go without questioning the validity of what is being reported, and the BBC represents that above all else. I read with great interest the Select Committee report that the hon. Gentleman referred to, and in large part the Government completely agree with it, certainly, the importance of public service broadcasting —that has never been less, as was powerfully set out by His Royal Highness Prince William in his comments about this episode.
Julie Marson (Hertford and Stortford) (Con) [V]
I was very struck by Matty Syed’s comment in The Sunday Times yesterday about “institutional narcissism” in the BBC. Although that might be slightly provocative, does my right hon. Friend believe that the current leadership of the BBC has a real sense of the cultural change that many believe is necessary to retain trust in the BBC, particularly in news and current affairs, and indeed the capacity to achieve that change?
Mr Whittingdale
There is no question but that even before Lord Dyson’s report was published there was a widespread feeling that the culture in the BBC needed to change—that it was made up too much of people of the same mindset and the same background and from the same part of the world. That is something that I believe the new leadership—under the recently appointed chair, Richard Sharp, and the director-general—are aware of and intend to address.
Janet Daby (Lewisham East) (Lab) [V]
I am very grateful for this urgent question. In its response to Lord Dyson’s report, the BBC board has said that it will review and assess
“the robustness and independence of whistleblowing processes”.
How important does the Secretary of State consider independence on whistleblowing, including the protection of whistleblowers, to be?
Mr Whittingdale
I regard it as absolutely essential in not just the BBC but all public bodies. We need to make sure that, in future, if somebody blows the whistle and exposes malpractice in the BBC, the consequence is that somebody else gets fired, not that they do.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Does my right hon. Friend agree that part of the problem in the culture of the BBC is that people often confuse the need to be accountable with a threat to the independence of their editorial judgment and that they therefore avoid that accountability? Does the board now accept that until a permanent and completely independent body oversees editorial policy, complaints procedures and whistleblowing—like a kind of accident investigation body—we will not see that change of culture, because people will go back to their established custom, which is to deny accountability?
Mr Whittingdale
My hon. Friend is right that we need to see much stronger oversight of the editorial decision-making process in the BBC. The BBC board covers a vast range of different aspects of the BBC’s activities—its strategy, its budget and so on—and there is a case for greater oversight, particularly of journalistic and editorial decisions. Quite how that is brought about is something that the review that the BBC has put in place is examining urgently. I understand that that review will publish a report by September, and we will obviously want to look at it very carefully.
Hannah Bardell (Livingston) (SNP)
Thank you for calling me, Madam Deputy Speaker:
“Trust is the foundation of the BBC.”
So says its values—except if you are trying to cover up a serial sex offender scandal such as that involving Jimmy Savile, do over a respected journalist such as Carrie Gracie or lie and cheat to get your exclusive interview with a princess.
As Lord Dyson’s report states,
“the investigation conducted by Lord Hall…was flawed and woefully ineffective”.
To add insult, a 2018 report found that Scottish fee payers subsidise broadcasting in the rest of the UK by £100 million a year. Is it not about time that Scotland stopped having to subsidise such ineptitude by those at the top of the BBC and that the Government acted to ensure that everyone in the UK is fairly treated and represented by the BBC?
Mr Whittingdale
The BBC is the British Broadcasting Corporation. It reports on activities across the United Kingdom. It is paid for by every person resident in the United Kingdom who has a television. Impartiality and fairness apply as much in its reporting of domestic politics as they do internationally. There are questions to be answered, as I agreed earlier, and the hon. Lady is correct. However, I do believe that the British Broadcasting Corporation should remain a beacon of impartiality for all residents of the United Kingdom.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
May I take my right hon. Friend back to the one bit of the Dyson report that has left us with a serious question? It relates to the behaviour of the then chairman and of Mr Bashir. Fraud is defined as a deception intended to result in financial or personal gain by false representation. There is no question from the report but that Mr Bashir made false representation to prey on a vulnerable woman to get her to do something that she would otherwise not have done. Furthermore, it refers to the fact, but does not conclude anything from it, that Mr Hall and others therefore covered up that process; again, I think that opens them up to the idea of fraud. Has my right hon. Friend decided to refer those people to the Director of Public Prosecutions?
Mr Whittingdale
The questions surrounding the employment of Martin Bashir are being urgently investigated by the corporation, as I said, and I expect a statement to be made very shortly. On whether any criminal offences have been committed, I understand that a request has gone to the Metropolitan police to examine the evidence that has been revealed and reach a judgment on it; it is a matter for the police to determine.
Damian Green (Ashford) (Con)
It is clear that shameful journalistic practices took place and that the investigations into them were, at best, profoundly inadequate. Does my right hon. Friend agree not only that the BBC needs to clean up its act in quite a considerable way, but that this lamentable episode should not be used as an excuse to severely damage or destroy an institution that is hugely valued by tens of millions of people in this country and millions more around the world?
Mr Whittingdale
I entirely share my right hon. Friend’s admiration for the BBC, which at its best is the finest broadcaster in the world. That is what makes these revelations so painful: that an institution that we all admire should be found capable of such appalling failings. I absolutely agree with my right hon. Friend; our intention is to restore trust in the BBC, certainly not in any way to diminish it as one of our great national assets.
Steve McCabe (Birmingham, Selly Oak) (Lab) [V]
I am sure that many people will have been disgusted by the behaviour of Martin Bashir and those senior figures who failed to address his actions, but does the Secretary of State agree that demands for the present Government to act against today’s BBC over events that occurred more than a quarter of a century ago could look a little ridiculous?
Mr Whittingdale
I am sure that I speak for the Secretary of State in saying that it is not a question of punishing the BBC—particularly for events that happened a long time ago, as the hon. Gentleman says—but it is essential that we learn the lessons from what happened then. As I said, we have already put significant changes in place since those episodes occurred, but we need to be absolutely certain that the current governance arrangements are effective and that these appalling incidents could not have happened if they had been in place.
Lee Anderson (Ashfield) (Con)
Now then: the findings of the Dyson report come as no surprise to many residents in Ashfield who have lost all confidence in the BBC. I personally have ripped up my TV licence, and it will not get another penny from me ever, because in my opinion the once great BBC is rotten. My constituents should not have to pay for a service if they do not use it. Does my right hon. Friend agree that one way to make the BBC behave in future is to make it a subscription service?
Mr Whittingdale
My hon. Friend is absolutely right that one of the great challenges that the BBC faces is to reconnect with the people he represents. There is a widespread feeling that the BBC is too metropolitan-centred and has lost touch with the views of a large part of the British population; I think that the BBC itself recognises that. With regard to subscription, the licence fee is in place until 2027 when the current charter expires, but there is bound to be a debate about the future funding. Moving fully to a subscription model would require quite significant changes to the way in which people receive their television, but I have no doubt that that is a debate that has already started and will continue.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba) [V]
At its heart, the Dyson report speaks to the missing values of integrity, honesty and the value of truth at the BBC. Following the biased coverage of the 2014 independence referendum, this crisis in trust is but a taste of what audiences in Scotland have known for years. The BBC brand is broken in Scotland and broadcasting must therefore be devolved, or at the very least must see the introduction of a new funding model, where all money raised in Scotland is spent in Scotland. Many will be bewildered by today’s handwringing over integrity and impartiality, when the broadcaster saw no issue in giving space to the Scottish leader of the UK Independence party in 2016, yet refused any place for my party in the 2021 debates, despite being led by a former First Minister, two sitting MPs and numerous councillors across Scotland. Why are the UK Government so quick to act when public trust has been broken now, but have been silent on the collapse in trust among viewers in Scotland for years? As a net contributor to the BBC, with a £43 million annual shortfall between income and spending in Scotland, how do the UK Government plan to plug the hole left propping up programming elsewhere upon Scotland’s independence?
Mr Whittingdale
The BBC is committed to impartiality in its coverage of all political events, including the referendum in Scotland and the current political debate. It is very important that the independence of the BBC is defended and that it resists political pressure from political parties in Scotland, be it the SNP or indeed some new offshoot from it.
Sara Britcliffe (Hyndburn) (Con) [V]
With the mid-point review of the BBC charter imminent, does the Minister agree with many of my constituents across Hyndburn and Haslingden that everything must be on the table for discussion, including its governance structures? Can he clarify that the scope of any future inquiries will cover the wider culture at the BBC?
Mr Whittingdale
The mid-term review is about the governance of the BBC and the new arrangements which were put in place. It will certainly incorporate a consideration of the culture to ensure that the BBC, in its present form, is delivering on its public purposes. It is a mid-term review of the existing charter. There will be an opportunity for a more fundamental examination of every aspect of the BBC, including its funding, when we come to the renewal of the charter, but that is still not until 2027.
Tahir Ali (Birmingham, Hall Green) (Lab) [V]
Can the Minister explain which elements of the BBC’s governance structure he thinks need to be reviewed in the light of Lord Dyson’s report? Does he agree that in considering the Dyson report we should all remember the BBC’s contribution to the UK’s economy, culture, democracy and soft power abroad?
Mr Whittingdale
As I said, the Government very much hope that the new governance arrangements now in place are sufficient, but the purpose of the mid-term review is to assess that and see whether any further changes need to be made. With regard to the contribution of the BBC to the economy of this country and to democratic debate, I entirely share the hon. Gentleman’s view that the BBC plays a central part in both.
Richard Drax (South Dorset) (Con)
I must declare an interest: I worked for BBC South Today and BBC Radio Solent for nine very happy years, where I witnessed the highest standards and was never influenced—ever—on how I was to report, other than fairly, in a balanced way and accurately. It seems to me that the problem is at the national level with senior management. Can my right hon. Friend tell the House how to ensure that senior management at the top of the BBC are, in future, independent and meet the all very high standards we want them to meet?
Mr Whittingdale
I am pleased to hear what my hon. Friend says about the high standards that pertained when he was working for the BBC. Obviously, that is something we hope will represent the BBC’s values in future. In terms of the leadership and management, the review which has been conducted by the BBC into the specific lessons to be learned from Lord Dyson’s report will feed into the wider reform agenda, which I think the board is determined to pursue. There is no question that there is a problem with culture at the BBC which goes beyond just the failings identified by Lord Dyson. I can assure my hon. Friend that that is something the leadership of the BBC does now recognise and is working hard to address.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The hurt and anger felt by Princes William and Harry and other members of the royal family is palpable and painful. I am so glad that there has been an unequivocal apology from the BBC and the launch of the lessons learned report on account of the diabolical journalistic practices endured by Princess Diana in 1995, but, of course, the BBC is so much more than a single programme; it is a treasured institution that has contributed immensely to our nation over the last century. So does the Minister agree that it is very distasteful to see a feeding frenzy, especially from those with a severe dislike of the BBC? Does he also agree that it is the pinnacle of irony for the Prime Minister to be talking about being immensely concerned about journalism standards, given that he himself was sacked by The Times for inventing a quote?
Mr Whittingdale
The hon. Gentleman was doing fine until the end. This is a more serious matter. I certainly agree with him about the distress that has been caused to the royal family, which has been very powerfully expressed by His Royal Highness Prince William. That is something that the BBC recognises, which is why it is acting to address it. I can only repeat what I have said already: the trust in the BBC is one of its greatest assets and the BBC now has to work hard to restore that.
John Redwood (Wokingham) (Con) [V]
How can someone who supports Brexit, believes in the Union and loves England be persuaded that the BBC’s view of public service broadcasting will in future be fair to their views? In future, will the BBC allow the majority on these issues more voice and less denigration?
Mr Whittingdale
I can answer my right hon. Friend by saying that I am one of the people he has described precisely, in all three of those measures, and I, too, have occasionally been concerned at what appeared to be a lack of impartiality in the BBC on some of those issues. That is something that has been, I think, felt by a large number of people. It is the job of the BBC—as I say, it is the first public purpose of the BBC—to deliver impartiality. I know that that is something that the leadership of the BBC which is now in place is absolutely committed to, but it will be examining ways in which that can be strengthened where necessary.
Martyn Day (Linlithgow and East Falkirk) (SNP) [V]
While Ministers toy with taking greater personal control of the BBC, true democratic reform remains out of reach. So, rather than stifling journalistic freedom, will the Minister consider devolving broadcasting powers to the devolved nations to ensure democratic, local regulation of BBC services?
Mr Whittingdale
The Government have no intention of imposing greater control over the leadership of the BBC. The BBC is independent and we are committed to respecting and strengthening that independence, When it comes to the question of governmental responsibility, it is not a devolved matter; the BBC is a national broadcaster covering the whole of the United Kingdom, so we believe that it is right that it remains the responsibility of the UK Government as a whole.
Huw Merriman (Bexhill and Battle) (Con)
I chair the all-party parliamentary group on the BBC and I say in that regard that this has not been a good chapter for the BBC’s fine history and it is important that it learns the lessons. I welcome the Minister’s very balanced tone. No one has done more in this place to try to reform the BBC and move it to that better place. Will he describe a little more about the review process that will apply the conditions that exist now with regard to governance, versus what would have occurred beforehand? Who will perform that role? Will it be his Department, his officials, or will he bring somebody in to assist in that regard?
Mr Whittingdale
As my hon. Friend knows, the mid-term review was not actually due to take place until next year; it was written into the charter that it should be in 2022. We would almost certainly have started thinking about the issues to be considered and the questions needing to be addressed in any case, but this issue has made that more urgent, and the Secretary of State has it made clear that we are starting work on it now. Precisely how the mid-term review will operate and whether we will invite external submissions is not yet determined, but I will certainly try to ensure that my hon. Friend is the first to know when we have further announcements to make.
Mr Gregory Campbell (East Londonderry) (DUP) [V]
Some have sought to defend the BBC by saying that the disgraceful Martin Bashir incident was 25 years ago, and indeed it was. However, since 1995, we have had the Jimmy Savile cover-up; the disgraceful incident regarding the surveillance of the search of the Cliff Richard home; the political partisanship of Emily Maitlis on “Newsnight”; and recently—in the past week or so—we heard about a BBC Palestinian expert on the BBC who, before she was employed by the BBC, tweeted that Israel is more Nazi than Hitler. The mid-term review surely offers the opportunity for radical, fundamental change at the BBC.
Mr Whittingdale
I can tell the hon. Gentleman that a lot of the incidents he mentioned took place before the new governance arrangements were in place, but we obviously need to consider whether there are lessons to be learned from those incidents for our mid-term review. If that journalist’s tweets regarding Israel and Palestine are shown to be genuine, it is my view that anybody who can express such opinions should not be employed by the BBC.
Madam Deputy Speaker (Dame Eleanor Laing)
In order that arrangements can be made for the next business, I will now briefly suspend the House for three minutes.
Daniel Morgan: Independent Panel Report
Monday 24th May 2021
(3 years, 6 months ago)
Commons ChamberRead Full debate Finance Act 2021 View all Finance Act 2021 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 24 May 2021 - large print - (24 May 2021)
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Chris Bryant (Rhondda) (Lab)
(Urgent Question): To ask the Secretary of State for the Home Department when she will publish the report of the independent panel into the death of Daniel Morgan.
The Parliamentary Under-Secretary of State for the Home Department (Victoria Atkins)
Daniel Morgan’s murder in 1987 was a tragedy compounded over decades by the absence of a successful conviction in the case. Our thoughts remain with Mr Morgan’s family. They have had to wait an incredibly long time for answers and it is essential that they get them. As the House will be aware, the Daniel Morgan independent panel was set up in 2013 by the then Home Secretary. The panel was commissioned to leave no stone unturned and the review has taken eight years.
The terms of the review set out that the independent panel will present its final report to the Home Secretary, who will make arrangements for its publication to Parliament. The chair of the panel has informed the Government that the report is now complete and that she has undertaken all her required checks. This is an important milestone. Once the panel provides the Home Secretary with the report, my right hon. Friend will make arrangements to lay the report in Parliament, as is her duty according to the terms of reference. The Home Office has asked the chair of the panel to agree a process for sharing the report with the Department in order to proceed with its publication.
Finally, I return to Mr Morgan and his family. After 34 years of heartbreak, it is the sincere hope and expectation of the Home Secretary, and indeed all of us, that Mr Morgan’s family will receive answers to the many questions that surround the terrible circumstances of his death through the publication of this report.
Chris Bryant
I am sorry, but it was not a tragedy; it was a crime. Daniel was axed to death in a car park on 10 March 1987—34 years ago—and thanks to corruption in the police and interference by News UK, the family have had no justice. That shames all of us. The Government have already cancelled the Leveson 2 inquiry, which was promised to Daniel’s family as a means of investigating that corruption, but now the Home Secretary has blocked publication of the independent panel report, saying that she wants to review it. She has no power in law to do that. It is not covered by the Inquiries Act 2005. Her own terms of reference allow her only to make arrangements for its publication to Parliament.
Daniel’s brother Alastair told me, “This has only added to our pain”. He urges the Home Secretary speedily to reconsider her position and to put an end to this unnecessary situation, so will the Minister agree a date with the independent panel and Daniel’s family today for publication this week, and will she undertake to publish the report in full—without deletion, amendment or redaction—because people are worried that she is not going to do that?
It is not difficult to see why powerful people with very close friends at News International might want to delay or even prevent this publication, so has the Home Secretary, or any of her advisers or officials, had any formal or informal discussion or correspondence on this matter with News UK, with Rebekah Brooks or with Rupert Murdoch? Will she publish the minutes of her and her Department’s meetings with representatives of News UK over the past 12 months? If not, will not people conclude that the cover-up is still going on, and that the Conservative party is not the party of law and order, but the party of the cover-up?
Victoria Atkins
I thank the hon. Gentleman for his questions and for bringing this urgent question to the House, because he has set out some of the reasons why this case is so very important. Indeed, we note that this review, which was directed by the then Home Secretary in good faith eight years ago, has taken as long as it has to work through the evidence.
The allegation that publication has been blocked is not correct. One cannot block the publication of a report if one has not yet received it. The Home Office has not received the report. As I said in response to the urgent question, the Home Office is working with the chair of the panel to agree a date for publication. [Interruption.] There is some chuntering from a sedentary position.
In terms of the contents of the report, I spoke only this afternoon to the Home Secretary about this matter. There is a very real wish—on both sides of the House, I think—to see this report published and to see answers for the family. As I say, she will be looking at this report. [Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. We simply must not have shouting at the Minister from the Front Bench. It is simply not polite.
Victoria Atkins
Thank you, Madam Deputy Speaker. The reason the process for publication has been set out as it has is that it is in the report’s terms of reference from 2013, with paragraph 6 stating:
“The Independent Panel will present its final Report to the Home Secretary who will make arrangements for its publication to Parliament.”
The Home Secretary will be entering into that agreement in good faith and the report will be published.
I know there has been a question about redaction, editing and so on—that will not happen. The only caveat —I say this because I am aware of my duties at the Dispatch Box—is that, as the hon. Gentleman knows, the Home Secretary, like any other Home Secretary, has responsibilities, both in terms of national security and the Human Rights Act—
Victoria Atkins
The hon. Gentleman dismisses national security with a wave of the hand, but these are the responsibilities any Home Secretary must abide by. That is the only caveat. Once those duties have been discharged, this report will be published. Again, we welcome the report and we look forward to receiving it from the panel when it is passed to the Home Office, and then the report will be published.
Bob Blackman (Harrow East) (Con) [V]
I thank my hon. Friend for updating the House on the current position. Clearly, all of our thoughts are with the family and friends of the late Daniel Morgan, who was savagely murdered. They have had to wait an extended period for justice to be served. Will she therefore give us a timetable for when the Home Secretary will lay the report before the House, so that Members of the House can ask appropriate questions about this inquiry, and about not only why it has taken so long, but its findings?
Victoria Atkins
The slight difficulty I have in setting out a timetable is that because we have not yet received the report, we do not know how long it is, the issues raised therein and so on. The Home Secretary is clear that after 34 years the family, understandably, wants this report and wants to see its conclusions, so the Home Office will be working expeditiously to lay this report before Parliament, as set out in the terms of reference of the panel review.
Nick Thomas-Symonds (Torfaen) (Lab)
I congratulate my hon. Friend the Member for Rhondda (Chris Bryant) on securing this urgent question, and I should say that a member of Daniel Morgan’s family is a constituent of mine. It is the family who should be uppermost in our minds today, and they have said:
“This unwarranted and very belated interference by the Home Secretary amounts to a kick in the teeth”.
It is 34 years since Daniel Morgan’s horrific murder and we have had five failed police investigations, a collapsed trial, an inquest, but no justice for the family and no answers. The independent panel was set up in 2013 to find answers, and the expected publication date was 17 May, yet we have more delay. There is no doubt that the report considers profound issues of corruption and trust in institutions, but the Minister will be aware of the panel’s strong condemnation of the intervention of the Home Secretary, on the basis that it is
“unnecessary and is not consistent with the panel's independence”.
The justification given is to check on human rights compliance and to ensure national security is not compromised, but the independent panel itself said that a
“senior specialist Metropolitan Police team”
carried out a security check—-it has been done already—so can the Minister explain why a further security check is necessary?
In addition, the panel’s terms of reference make it clear that the Home Secretary’s role is limited to receiving the report, laying it before Parliament and responding to the findings. Can the Minister explain how this intervention and supposed check by the Home Secretary is consistent with those terms of reference? How will the Home Secretary be working with the family and the panel to address these very serious concerns? When will they actually agree a date finally for publication of an unredacted report, rather than prolonging the agony that the Morgan family have been going through?
Victoria Atkins
The right hon. Gentleman eloquently set out the terrible experiences of the family over the past three decades and more. It is precisely because of the trauma that they have suffered over the years that the review was commissioned. I know that the right hon. Gentleman joins us in wanting to ensure that the panel report is as thorough as possible and that it is now published. There is no disagreement at all between him and the Government on that. We want to publish the report but we have not yet received it. The Home Secretary will make arrangements for that in line with the terms of the review—that is what we want to happen. The Home Office is very much in conversation with the panel to get the report and make the arrangements. When that has happened, the report will be published.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP) [V]
Given the outrageous history of corruption, injustice and delay in this case, the requests by Daniel Morgan’s family are surely entirely reasonable, so will the Home Secretary meet the family? Will she agree that the timetable for the publication of the report should be very short indeed? In particular, the presence of a suitably experienced solicitor and QC on the panel means there should be almost nothing that the Home Office could possibly have any concerns about. Why was the panel first told that the delay was down to the elections and the period of mourning for the Duke of Edinburgh and the consequential backlogs in respect of documents being laid before Parliament?
On the issue of trying to build confidence in these processes, why cannot there be an independent body that can adjudicate on such issues? Will the Minister acknowledge that perceived ties and links between the Home Secretary and news organisations is all the more reason for such an independent process to exist in this case? May we have full disclosure of all the meetings and correspondence between the Home Office and news organisations under investigation by the panel? Finally, if the panel points to the need for Leveson 2 to be revived with far greater powers than the current panel enjoys, will that happen, and if not, why not?
Victoria Atkins
Sadly, the hon. Gentleman asks me to speculate about a document that the Home Office has not yet received. We cannot publish the report until it has been received. If I may, I wish to correct one point that the right hon. Member for Torfaen (Nick Thomas-Symonds) also made in his contribution. The panel may well have conducted its own checks, and quite rightly so—it is bound to do so—but the Home Secretary, of course, has her own responsibilities that she cannot transfer to anyone else. That applies to every Home Secretary.
In relation to national security concerns, I hope Members will understand that the Home Secretary has access to information that very few people in this country have access to. She must discharge her duties in accordance with her wider responsibilities as Home Secretary. I underline again the fact that the Home Secretary, the Home Office and the Government want this report to be published. We want the review’s findings to be in the open so that some of the questions that have been posed over the years are answered. We hope there will be some sense of justice for those most closely related to Mr Morgan.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) [V]
The failure ever to prosecute anyone for the terrible murder of Daniel Morgan and the continued allegations in respect of police corruption and media collusion make this an immensely important report. I do not know whether the Minister understands that the way she is talking about the report—reviews by the Home Secretary and the Home Secretary having access to additional information she has to review the report against—serves only to increase distrust and unease in what is already, clearly, a distrustful process that should never have become so. To restore trust for the panel and, crucially, for the family, will the Minister commit that the report will be published before Parliament rises for the Whitsun recess, if the Home Office receives the report this week?
Victoria Atkins
The right hon. Lady sets out the seriousness of the situation, and I do appreciate that, as I hope was apparent from my earlier comments, but I make the point again that I cannot commit to a publication date if the Home Office has not yet received the report. Please, give us the report and we can then publish it.
Sarah Jones (Croydon Central) (Lab) [V]
Daniel Morgan Jr., Daniel Morgan’s son, lives in my constituency, and I spoke to him this morning. I met Daniel at an advice surgery back in 2019, when he came to see me to ask if I could write to the then Home Secretary about the delay to the inquiry. The then Home Secretary, the right hon. Member for Bromsgrove (Sajid Javid), wrote to me in 2019. He shared the concern that the inquiry was taking a long time, as one would imagine, and said to me:
“As it fulfils this important work the Panel’s investigation is rightfully independent of Government, but the Panel must deliver its findings to Parliament and to the Morgan family as soon as possible.
I am certain that you will understand that it would be improper for a Minister to seek to influence any decisions made by the independent Panel.”
My constituent has been waiting 34 years since the death of his father to see any kind of justice, so why does this Home Secretary not agree with the former Home Secretary that it would be improper for a Minister to seek to influence any decisions made by the independent panel, and will she publish any advice from officials explaining why her powers have changed? Will she meet my constituent?
Victoria Atkins
I thank the hon. Lady for bringing forward the very human aspect of this. I know that we are talking about a report and a review process, but at the heart of this has been the family. In fairness, if one looks at the written ministerial statement issued by the then Home Secretary when the review was announced, one sees that it was made clear that the family must be at the heart of the process. The review has taken eight years, and as my right hon. Friend the Member for Bromsgrove (Sajid Javid), the previous Home Secretary, set out to the hon. Lady, we could not—would not—interfere with the conduct of that review. That is why, in a way, we are in the position we are in. The panel has its report; it has, we have been told, now finalised the report; under the terms, we will receive the report and then publish it. The only caveat is in relation to national security considerations—for which, in fairness, the Home Secretary has responsibility in a whole host of regards. However, that is the only caveat, so the report will be published. We look forward to receiving it from the panel, and I hope it will give answers to the hon. Lady’s constituent and to others.
Wendy Chamberlain (North East Fife) (LD)
It is well established that there were significant failings and delays in investigating both the murder of Daniel Morgan and the subsequent claims of corruption and malpractice. As others have said, this is clearly damaging to the family of Daniel Morgan and also others involved in investigations. They include one of my constituents, who has raised serious allegations about the Metropolitan police’s conduct, about which I have written to the Secretary of State on more than one occasion, and to which, frankly, I have received not hugely helpful responses. Now it seems that the Home Office is willing to delay justice and further erode trust in the police service by preventing the truth of these failings from becoming public. Looking forward, will the Minister explain exactly what action she will commit to on behalf of the Home Office to ensure that future investigations are carried out independently, rigorously and timeously, in order to prevent further injustice?
Victoria Atkins
I imagine the chair of the panel will say that her review has been conducted independently, rigorously and timeously. The Home Secretary cannot publish a report until she receives it, and that is the situation we are in. We all want answers. These are incredibly important issues that have been raised during the course of the review. A great deal of time has elapsed since the horrific murder of Mr Morgan, and the report I hope will answer some of the questions that have been posed in relation to that.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op) [V]
I have a long-term interest in this case through a campaigning lawyer, Mr Glyn Maddocks, who works with me as co-chair of the all-party parliamentary group on miscarriages of justice, along with my co-chair the hon. Member for Reigate (Crispin Blunt). This case was brought to me many years. I have even visited the Golden Lion car park, where this horrible murder took place, but the puzzle today is this. I have a lot of time for this Minister, but it should have been the Home Secretary here today. It is with some puzzlement that we hear that the report is finished after eight years rather than one. It was a report set up by a former Home Secretary, who then became Prime Minister. We were all told that this expensive inquiry would come out last weekend, but immediately we were told that it cannot be seen because of national security. Either they have seen it and decided there is a problem with national security, or they have not seen it. The fact of the matter is that justice must be done in this case, and we need to see the report. Can the Minister give us the date? When can we see it, because we want it now?
Victoria Atkins
I thank the hon. Gentleman for his kind remarks. Again I reiterate, because I understand the concern, that there is no question of the report being blocked, edited or changed in the ways that people are concerned about. As I said, it will be published. The only caveat is that if there are matters in there that relate to national security, and those are duties that any Home Secretary must abide by, but she and everyone else wants this report to be published and for those questions to be answered. In terms of the date, again, I make this point: we cannot publish something if we do not yet have it.
Peter Grant (Glenrothes) (SNP) [V]
I cannot help thinking that if things had been the other way around, and Sun journalists had lied to procure an interview with the late Princess of Wales, and the BBC were alleged to be involved in covering up the reason for a brutal murder on the streets of London, the action on the Government Benches to this and the previous item of business might have been very different.
Can the Minister give an assurance that as soon as what should be an extremely quick check on national security and other concerns has been carried out by the Home Secretary, Parliament will see the report before anyone else? In particular, can she give an assurance that there will be no opportunity for Maxwellisation, which would allow those who were rightly criticised in the report to get their story into the press before the report is made public and made available to Members of Parliament?
Victoria Atkins
I am not going to draw analogies between the facts of this terrible, terrible case and the headlines and facts that have emerged in relation to Princess Diana. I think both cases and both people deserve their own moment. The previous urgent question concerned the late princess. This UQ concerns Mr Morgan, so I will confine myself to him. In terms of the process, at the risk of repeating myself, the report has been prepared by the panel. The panel has taken eight years to gather evidence. One can only imagine—I am speculating, because I have not seen it—what the product will be after eight years’ worth of work. That is why, in accordance with the terms of the inquiry, the Home Secretary will make arrangements for it to be laid in Parliament. Of course that means that Parliament will see it.
In relation to the Maxwellisation process, I do not know the process that the panel has gone through, but the Home Secretary has a duty under section 6 of the Human Rights Act 1998 in relation to threats to life, but that is the only consideration that will be in her mind—that, and national security. We have no interest in editing this report—none whatever. We want the truth to come out.
Charlotte Nichols (Warrington North) (Lab) [V]
Five police investigations failed to find the person or persons responsible for Daniel’s murder, but they did find evidence of police corruption. Police officers and News UK reporters are alleged to have corrupted these investigations in the 1980s, the 1990s, and the years after 2000. Throughout these 34 years, Daniel’s brother, Alastair Morgan, has led the campaign for justice for Daniel. The Daniel Morgan independent panel was promised access to Metropolitan Police Service files, but not to any material held by News UK. Given News UK employees’ alleged involvement in the cover-up of Daniel’s murder, will the Home Office now re-establish the Leveson part 2 inquiry, which has the necessary power to investigate News UK, or do the Government intend to allow potentially guilty parties in relation to this case to go free?
Victoria Atkins
I want to bring the hon. Lady’s attention back to this urgent question, which is about the report that the panel has drawn up following eight years of research and investigation. We want the report to be published and the truth to come out. When we receive the report, we will, in accordance with the terms of the inquiry, publish it and make arrangements for it to be laid before Parliament. There is nothing further that I can add to that because we have not yet received the report. We await it, along with everyone else, and look forward to the panel providing us with it.
Chris Bryant
On a point of order, Madam Deputy Speaker. I know that I should not comment on what has just happened, because that would be to keep the debate going—I have got a genuine point of order coming—but I would briefly point out that national security can be used to cover anything, even a mention of the Metropolitan police.
My serious point of order—I hope the Minister listens to it—is that there are, I think, at least eight named day written parliamentary questions on the Order Paper for answer tomorrow. The Home Office has been particularly bad at replying on the named day to named day parliamentary questions of late, and it would be enormously helpful to re-establishing trust if the Minister could ensure that they are all answered tomorrow. I do not know whether you have any means, Madam Deputy Speaker, of relaying that information to the Minister.
Madam Deputy Speaker (Dame Eleanor Laing)
The hon. Gentleman is, of course, very clever in his making of a real point of order and seeking to continue the argument that has just taken place during his urgent question. I will ignore the part of his point of order that was not a point of order, and answer him quite simply by saying that I have relayed the points that he has made to the Minister by means of raising my eyebrows, and the Minister, by means of nodding her head in a most ladylike and professional fashion, has shown me that she has heard the point of order.
The serious part of the hon. Gentleman’s point of order is that when questions are submitted for a named day, the Department to which they are submitted ought to pay attention to that and not merely to ignore it. Mr Speaker has said many times over these last few months that many questions are taking too long to be answered. I have every confidence that the hon. Gentleman’s questions will be answered on the correct day and that, if they are not, he will raise the matter again, and whoever is in the Chair will look upon the matter with great seriousness.
I now very briefly suspend the House, this time for only two minutes, in order that arrangements can be made for the next item of business.
Proceedings | Time for conclusion of proceedings |
|---|---|
New Clause 23; remaining new Clauses, new Schedules and amendments relating to the subject matter of clauses 6 to 14 and Schedule 1 | Three hours after the commencement of proceedings on the motion for this Order |
New Clause 25; remaining new Clauses, new Schedules and amendments relating to the subject matter of Clauses 109 to 111 and Schedules 21 and 22 | Four hours after the commencement of proceedings on the motion for this Order |
New Clause 2; remaining new Clauses, new Schedules and amendments relating to the subject matter of Clause 88 and Schedule 16; remaining new Clauses, new Schedules and amendments to Clauses and Schedules; remaining proceedings on Consideration | Five hours after the commencement of proceedings on the motion for this Order |
Finance Bill
Monday 24th May 2021
(3 years, 6 months ago)
Commons ChamberRead Full debate Finance Act 2021 View all Finance Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 24 May 2021 - large print - (24 May 2021)
19:21 - The House divided: - Ayes: 261 / Noes: 364 - Question accordingly negatived.
19:33 - The House divided: - Ayes: 268 / Noes: 357 - Question accordingly negatived.
20:21 - The House divided: - Ayes: 268 / Noes: 357 - Question accordingly negatived.
22:01 - The House divided: - Ayes: 218 / Noes: 358 - Question accordingly negatived.
22:12 - The House divided: - Ayes: 261 / Noes: 365 - Question accordingly negatived.
22:30 - The House divided: - Ayes: 365 / Noes: 261 - Question accordingly agreed to.
James Murray (Ealing North) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Eleanor Laing)
With this it will be convenient to discuss the following:
New clause 6—Review of impact on corporation tax revenues of global minimum rate of corporation tax—
‘The Chancellor of the Exchequer must within six months of Royal Assent lay before the House of Commons an assessment of the effect on corporation tax revenues in 2022 and 2023 of a global minimum corporation tax rate set at 21%.’
This new clause would require the Government to publish an assessment of the revenue effect of a global minimum corporation tax rate of 21%.
New clause 12—Review of impact of Act on investment—
‘(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the changes on—
(a) business investment,
(b) employment,
(c) productivity,
(d) GDP growth, and
(e) poverty.
(3) A review under this section must consider the following scenarios—
(a) the United Kingdom reaches an agreement with OECD countries on a minimum international level of corporation tax, and
(b) the United Kingdom does not reach an agreement with OECD countries on a minimum international level of corporation tax.
(4) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.’
This new clause would require a report on the effect of the changes in the Act on investment, comparing scenarios in which (a) the United Kingdom reaches an agreement with OECD countries on a minimum international level of corporation tax and (b) the United Kingdom does not reach an agreement with OECD countries on a minimum international level of corporation tax on various economic indicators.
New clause 22—Eligibility for tax reliefs—
‘(1) For the purposes of Clauses 9 to 14 and 109 to 111 no tax reliefs shall apply to companies registered or with subsidiary companies registered in countries or jurisdictions listed in the EU list of non-cooperative jurisdictions for tax purposes.
(2) The Secretary of State shall also have the power to list additional jurisdictions or countries as non-cooperative jurisdictions for the purposes of subsection (1) that he/she perceives to be non-cooperative jurisdictions for tax purposes.’
This new clause would stop companies registered, or with subsidiary companies registered, in tax havens from benefiting from the UK Government tax reliefs in this Bill.
Amendment 1, in clause 9, page 4, line 2, at end insert
“provided that any such company which has more than £1 million in qualifying expenditure must also make a climate-related financial disclosure in line with the recommendations of the Task Force on Climate-related Financial Disclosures within the 2021/22 tax year.”
This amendment would, in respect of companies with qualifying expenditure of over £1 million, add a condition relating to climate-related financial disclosure to the conditions that must be met in order for expenditure to qualify for super-deductions.
Amendment 29, page 4, line 2, at end insert
“provided that any such company must also not be liable to the digital services tax”.
Amendment 30, page 4, line 2, at end insert
“provided that any such company which has more than £1 million in qualifying expenditure must also—
(i) adhere to International Labour Organisation convention 98 on the right to organise and collective bargaining, and
(ii) be certified or be in the process of being certified by the Living Wage Foundation as a living wage employer.”
Government amendment 2.
Amendment 31, page 5, line 15, at end insert—
“(11) Expenditure shall not be qualifying expenditure under this section if it is incurred by a company which has at any time been involved in arrangements giving rise to a liability for diverted profits tax, or which would give rise to such a liability but for the effect of section 83 of Finance Act 2015.
(12) For the purposes of subsection (11), involvement in arrangements shall include being connected within the meaning of section 1122 Corporation Tax Act 2010 to any company involved in such arrangements.”
This amendment would bar multinationals with a history of corporate tax avoidance from accessing super-deductions.
James Murray
The vaccine has given us all hope, but we know that the health crisis from covid is far from over, and the impact on jobs, businesses and the economy resulting from the pandemic will be with us for a long time to come. People across our country and British businesses that have been struggling want to be able to get back on their feet. This Bill should have offered them the support they need to do so, but instead the Government chose to make half of all people in the UK pay more income tax, and its headline measure for businesses, quickly and with good reason, earned the nickname, “the Amazon tax cut”. This Amazon tax cut was proudly announced by the Chancellor as the new super deduction—a £25 billion tax cut that he has said represents the biggest two-year business tax cut in modern British history. What he was less keen to make clear is that this tax cut is not targeted at British businesses that have been struggling in the outbreak, but stands to benefit some of the biggest multinational tech firms that have done very well indeed over the past year or so.
As we have heard during previous debates on the Bill, small and medium-sized businesses can already benefit from the annual investment allowance. That allowance, extended by clause 15, offers a 100% tax break on investment up to £1 million, and we know that it will benefit almost all businesses already. The Financial Secretary to the Treasury has said exactly that. He stated very clearly in a written ministerial statement on 12 November last year that the annual investment allowance:
“Simplifies taxes for the 99% of businesses investing up to £1 million on plant and machinery assets each year.”
We pushed the Government on this matter in Committee of the Whole House, when the Financial Secretary claimed:
“The super deduction benefits all businesses that are in a position to take advantage of the eligible deduction it provides”.—[Official Report, 19 April 2021; Vol. 692, c. 764.]
He will know, however, that the 99% of businesses already benefiting from the annual investment allowance will benefit only marginally from the new super deduction.
The real winners of the super deduction were identified in Committee of the Whole House by my right hon. Friend the Member for Barking (Dame Margaret Hodge), who made the powerful argument that it will most benefit
“the companies with oven-ready capital investment plans, benefiting from the increased demand that they have enjoyed over the last torrid year—companies such as…the notorious tax avoider Amazon.”—[Official Report, 19 April 2021; Vol. 692, c. 751.]
As that phrase reminds us, Amazon already avoids paying much corporation tax in the UK at all by shifting profits to low-tax countries overseas—I will return to that point shortly—but it is depressing that, through his super deduction, the Chancellor is finishing the job Amazon started and wiping out the last little bit of tax it pays in this country.
As the House may remember, we asked the Government to look again at this matter in Committee of the whole House. Our amendment at that stage would have explicitly prevented the biggest tech firms from taking advantage of the Chancellor’s tax break, as well as other big firms that do not support workers’ rights and the living wage. At the time, the Financial Secretary to the Treasury objected to our amendment on the basis that it sought to
“restrict the relief only to certain companies”—[Official Report, 19 April 2021; Vol. 692, c. 742]
and that it imposed “burdensome conditions” on companies that want to benefit from it. That latter phrase told us plenty about the Government’s views on people’s rights at work. The conditions the Minister saw as “burdensome” are the rights to organise and to be paid a living wage. When even basic rights at work and a living wage are seen as burdensome, it is perhaps no wonder that this Government broke their promise to include an employment Bill in the Queen’s Speech earlier this month.
It is clear that we will need to push Ministers over workers’ rights on future days—from banning the shameful practice of fire and rehire to ending exploitation by rogue umbrella companies—as cross-party amendments tabled to this Bill by right hon. and right hon. Members seek to achieve. Today, we have made it very straightforward for the Government, through amendment 29, to focus specifically on preventing the very biggest tech firms—those companies liable to pay the digital services tax—from benefiting from the super deduction. This should be easy. Only a very small number of very large multinational firms that have done very well over the past year are liable for the digital services tax. The detail of that tax means that businesses are liable only when a group’s worldwide revenues from digital activities—such as providing social media platforms, search engines or online marketplaces—are more than £500 million, and when more than £25 million of these revenues are derived from UK users.
The vote on this amendment will come down to the very simple question of how Members of this House believe public money should be spent. As the Bill stands, the Government’s biggest business tax cut in modern British history will finish the job Amazon started, wiping out the last bit of tax it had to pay on the few parts of its business the profits of which it has been unable to shift overseas. A vote in favour of our amendment 29 would stop Amazon and a small number of similar firms benefiting from a giveaway of public money—public money that could be better spent for so many purposes, including to support British businesses that have been struggling throughout the past year. I urge Conservative Members to consider how they vote on amendment 29.
Before we come to that vote, I will turn to our new clause 23, through which we seek to push the Government finally to back President Biden’s plans for a global minimum corporation tax rate. I have explained how the Government’s super deduction will wipe out Amazon’s remaining tax bill in the UK, and how the amount it was due to pay in the first place was paltry compared with what it should be paying. Despite its business success in the UK, profit shifting to Luxembourg meant Amazon’s corporation tax contribution in the UK in 2019 was less than 0.1% of its turnover. People are fed up with large multinational companies avoiding their tax. It goes against the fairness that must be at the heart of our tax system, and in this year of all years, when so many British businesses are struggling to get back on their feet while Amazon’s business booms, it is clearer than ever that change is long overdue.
We have heard brazen claims from the Government about their work to combat international tax avoidance. In the debate in Committee of the whole House on this Bill, the Minister went so far as to claim that the Government have “led the international charge” in a number of ways, yet since the Biden Administration announced their proposals for a global minimum corporate tax rate, we have seen that, not for the first time, actions from the Government fail to match their words, with the UK now the only G7 country not to back the US plan. This is a once-in-a-generation opportunity to grasp the international agreement on the global taxation of large multinationals that has evaded our country and others for so long, yet rather than stepping up, our Government are stepping away.
The Financial Secretary to the Treasury (Jesse Norman)
The hon. Gentleman advances the extraordinary claim that the UK is the only country among the G7 not to have backed the Biden plan. Will he put in the Library the evidence for that claim?
James Murray
I am very happy to put in the Library references to comments from the other G7 countries indicating their support, but what I ask the Financial Secretary to do is put in writing the support from the UK Government for the plans proposed by President Biden, which he should be able to do today. He should act, because the British people want the Government to act. He need only look at polling carried out at the end of April by Yonder, formerly Populus, which showed overwhelming public support for action to tackle global corporate tax avoidance: three quarters of respondents thought that
“The UK should play a leading role.”
The polling also showed that less than a third of people
“trust Rishi Sunak and Boris Johnson to tackle global tax avoidance”.
The public are right to be sceptical, because the Government have shunned ample opportunities to come out in favour of President Biden’s plans; indeed, since we began debating the Bill, I have put them to the Financial Secretary and his colleagues three times. On Second Reading, I urged the Exchequer Secretary
“to confirm to the House that she and the Chancellor back plans for a global minimum corporate tax rate and that they will do all they can to make this a reality.”—[Official Report, 13 April 2021; Vol. 692, c. 197.]
She did not respond. In case his colleague’s lack of response was simply an oversight, I asked the Financial Secretary in Committee of the whole House
“to confirm whether the Chancellor backs plans for a global minimum corporate tax rate”—[Official Report, 20 April 2021; Vol. 692, c. 897.]
He refused to do so, saying only that the Government
“welcome the renewed commitment that the US Administration have made in this area”.—[Official Report, 20 April 2021; Vol. 692, c. 914.]
In a debate the following week, I put the question to him again, as simply and directly as possible:
“does the Chancellor back the plans proposed by the US President?”—[Official Report, 28 April 2021; Vol. 693, c. 415.]
The Financial Secretary replied:
“I do not think it is appropriate for Ministers to comment on tax policy in flight”.—[Official Report, 28 April 2021; Vol. 693, c. 418.]
It is very hard to conclude anything from that pattern of responses other than that the Government are not backing these proposals to succeed.
We know that much of the discussion around President Biden’s plans and the proposals formulated in recent years by the OECD and G20, with which his plans largely align, has centred on the so-called pillars 1 and 2 of any agreement. In broad terms, pillar 1 relates to where profits are taxed, while pillar 2 relates to a global minimum corporate tax rate. Both are important to developing a fairer tax system, both feature in President Biden’s proposals, and the Opposition want to see progress on each.
We have been trying to understand why the Government are so reluctant to get behind President Biden’s plans. There was a suggestion in the Financial Times last week that what the UK wants is more movement on where large multinationals pay taxes—pillar 1—before it will agree to support the President’s global minimum corporate tax rate, pillar 2. The paper quoted a UK Treasury official:
“The core UK proposition is that we’ve got to solve the digital tax issue…It’s not primarily about a minimum tax”.
To quote the chief executive of Tax Justice Network, that argument is “absolute nonsense”. Many commentators have joined him in taking a very sceptical view of what the UK claims its position to be; they point out that President Biden’s plans include steps to make progress on pillar 1, and that although any estimates are necessarily rough, pillar 1 would bring in only a few per cent. of the estimated £14 billion that a global minimum corporate tax rate at 21% under pillar 2 would raise.
A report by Bloomberg, however, implied that the real reason behind the Government’s position may be cynically to disguise their real agenda: a desire to keep alive the possibility of a race to the bottom in the future. That would be such a damaging and short-sighted approach. People are fed up with the race to the bottom. We thought that even the Chancellor had had a conversion when he admitted to the BBC’s “Today” programme around the time of the Budget that years of Conservative economic policy had failed, telling the BBC that
“there was an idea”
that corporation tax cuts
“could help spur investment, and what we’ve seen over the past few years is that we haven’t seen a step change in the level of capital investment that our businesses are doing as a result of those corporation tax decreases.”
After years of people being frustrated with tax avoidance by the biggest multinational companies, the new global deal finally within reach would be a game changer. It would raise billions of pounds a year for investment in our British public services and industry, it would stop British businesses being undercut by large multinational firms that shift their profits overseas, and it would change the behaviour of Governments around the world by calling time on the race to the bottom with tax rates. That is why a global minimum corporate tax rate is so important.
This is a once-in-a-generation opportunity. It would be a shameful failure for our Government, at the G7 meeting that we are hosting in Cornwall next month, to fail to lead on securing a global deal. It is crucial that we show support and help to build momentum behind the Biden Administration’s ambitious plans.
Madam Deputy Speaker (Dame Eleanor Laing)
The House has become familiar with having a time limit for every item of business, but I hope that we can manage to consider this stage of the Bill without a time limit. I appeal to Members who are taking part to have consideration for other Members, and not to speak for too long. How long is too long? More than five minutes is too long, but if somebody takes five and a half minutes because they are making some important points, that would be fine. If the occasional person take interventions and it comes to six and a half minutes, that would be fine. But if people take longer than is necessary, I will have to impose a time limit, which makes for a less good debate. Let us try to behave like parliamentarians and not take too long. That puts a tremendous amount of pressure on Stephen Hammond.
Stephen Hammond (Wimbledon) (Con)
Thank you, Madam Deputy Speaker. I am sure the House will benefit from your strictures towards my speech, and I welcome the opportunity to make a short contribution on the amendments. As the hon. Member for Ealing North (James Murray) rightly says, the OECD-Biden proposals are an attempt to ensure a multinational, legal framework to ensure that multinational countries pay tax in the countries from which they derive that revenue. Unlike him, I think any sensible look at history will show that this Government have led the way on this since 2010. There can be no suggestion that they have not led the way on ensuring that multinationals should not be able to shift profits to avoid taxation. They have tried to lead the arguments on securing, over many years, a multinational, multilateral agreement on where revenues and profits are derived and how those are taxed. Across the House, we ought to recognise that the Government have been trying to achieve that and that they support it. It has been true since 2010. One of the former Chancellors, George Osborne, led the way on the matter.
The OECD proposals, as the hon. Gentleman put it, are in two pillars, as we all recognise. Pillar one rightly seeks to address the matter of base erosion, as the UK Government have done historically and continue to do. Pillar two, however—I think he failed to recognise this point—would go well beyond what is normally considered to be within the ability of national states, in terms of using the flexibility of fiscal policy to ensure that investment and incentives are properly rewarded within their economies, and may well have some perverse effects on a number of multinational industries, such as the insurance industry. Given your strictures, Madam Deputy Speaker, I shall not give my long peroration on that matter.
However, the key point is that there is a difference between what the Government have been trying to achieve—a multilateral, multinational agreement on the need for a combined approach, which I have no doubt that the Prime Minister and the Chancellor will wish to speak about at the G7—and a legal, minimum international tax rate. It is right that Governments still retain the ability to set fiscal measures according to their economic circumstances. Therefore, I wholeheartedly support—as the Government do—the international agreed approach to ensure that we tax multinational companies on where they derive their revenues and profits.
The problem with new clause 23 is that it talks about a review of the impact of the global minimum tax, but in reality, it is superfluous, because many of the consequences of setting a tax rate of 21% can easily and readily be calculated. The OECD discussions on the precise nature of the agreement are still under review. Therefore, speculating about how that might assess and impact on different economies could hinder the global efforts to achieve that aim.
Finally, as I am sure the Financial Secretary will wish to assure the House, the Government have already agreed that as, when and if there is a global agreement on minimum taxation, they will—when they are a party to that—ensure that the Office for Budget Responsibility assesses the impact for the UK economy and globally. So while this new clause is an interesting amusement for the House tonight, it is superfluous and I wholeheartedly encourage the Government not to accept it.
The hon. Gentleman spoke a bit about the need for investment and for addressing the historical UK underperformance in that area. We all agree with that. As we seek economic recovery post-pandemic and, in the longer term, as we build a cleaner, greener and stronger economy, clearly, the problem of underinvestment has to be addressed on a long-term, sustainable basis. However, it is clear that what the Chancellor has done, with what is popularly known as a super deduction, is likely to bring forward investment in the economy at just the time it is needed. There is an element of saying that, of course, we want to concentrate that on any number of small businesses that may not benefit from investment relief and this may or may not be at the margin, but it may or may not be at the margin that it has the greatest impact. I think the super deduction, which the Opposition seek to criticise, will do exactly that. They want the OBR to assess the impact in other areas of the Finance Bill, but the OBR has already made an assessment of this particular measure in the Bill, which is that it will derive at least 10% extra investment in the UK economy. At this stage of our economic recovery, that seems to me to be fundamentally important, so I hope that the Government will push ahead with the super deduction, as they are doing in this Finance Bill, and even consider it on a longer-term basis as well, because it is hugely important that we address the under-investment in both physical and human capital. Therefore, Government amendment 2 to clause 9, which will allow leased buildings to qualify for that super deduction, seems to be eminently sensible.
Given your stricture, Madam Deputy Speaker, although I could share with the House another 15 minutes of brilliance, I shall now sit down.
Alison Thewliss (Glasgow Central) (SNP)
I will also bear in mind what you have said, Madam Deputy Speaker, and keep my comments fairly brief.
I wish to start with the words of the US Treasury Secretary, Janet Yellen. She said:
“Competitiveness is about more than how US-headquartered companies fare against other companies in global merger and acquisition bids…It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”
That is something that this Government ought to be getting behind, as it makes absolute sense. It is exciting to see that the Biden plan for a global minimum corporation tax rate is gathering pace. It is reported that the G7 is close to a deal, perhaps paving the way for an OECD deal later on in the year. The action is described in the Financial Times as
“the largest shake-up in corporate taxation for a century.”
As the shadow Minister set out, the Government have been ducking questions on this and ducking responsibility. It feels to me at the moment that an agreement will take place in spite of the UK Government’s hesitancy—less global leadership, more like pulling teeth. Why would the UK Government be in favour of the types of profit shifting that this international co-operation is trying to stamp out? Why would they let our businesses be undercut? Why would they forgo valuable tax revenues?
Our new clause 12 is asking the UK Government to prepare a report on an OECD agreement, which seems very much like the direction of travel, as it would cover 135 countries and the largest corporations in the world. It is important that the UK Government fully understand the impact of such an agreement on each and every part of these islands: on business investment, employment productivity, GDP growth and poverty. The impact of not reaching a deal has been included in new clause 12, too, as it is important that we can fully understand the impact should the UK pursue some kind of crazy isolationist stance against this global growing consensus.
The SNP has great sympathy with new clause 22 and amendment 31. Those using tax havens and with a history of corporate tax avoidance should not seek to obtain benefit from schemes intended to support businesses that already pay their fair share. I ask Treasury Ministers what safeguards they intend to put in place if they do not accept these sensible and logical amendments.
I am glad that, in Government amendment 2, there is some recognition of the issues facing those who have background plant and machinery in leased properties, allowing them to qualify for the super deduction. I remain hugely frustrated that there is yet to be any wider support and any wider recognition of the many businesses both involved in leasing and those that lease machinery themselves. I seek assurances from Ministers that they will continue to hold the door open on this issue and to look at it, because there are so many companies that would benefit from the super deduction if it were not for the fact that they have always leased machinery. They contribute hugely to the productivity of this country and there should be some recognition of that within the Government’s proposals.
Dame Margaret Hodge (Barking) (Lab) [V]
I wish to speak to amendment 31, which stands in my name and in the names of hon. and right hon. Members from across the House. I shall try to keep my comments brief, too. I will go back to first principles and try to convince Ministers that what we propose is simply fair, just and practical.
Eighty-five per cent. of the British public pay their tax without question through the pay-as-you-earn system. For many of those hard-working taxpayers really struggling to keep their families going, particularly after the pandemic, it is simply unconscionable to watch the big corporations that have made so much money during the pandemic—the Googles and the Amazons—continue to create financial structures that have no other purpose than to help them avoid paying corporation tax. Shifting their profits simply to avoid tax is not only unfair but utterly immoral.
John McDonnell (Hayes and Harlington) (Lab) [V]
I have to say that my right hon. Friend the Member for Barking (Dame Margaret Hodge) has eloquently put forward the case for these proposals, both those from the Opposition Front Bench, which I fully support, and her own, but I think she has been too kind to the Government. Like her, I have sat for over two decades listening to the sophistry from Conservative Ministers explaining the various complications of doing anything to tackle tax avoidance, and they have been dragged kicking and screaming to take what little action there has been. I have also sat here year on year while they argued that cuts in corporation tax were the way to increase investment. Now, at least, they have admitted that they were wrong on that.
However, instead of cutting corporations’ taxes by cutting corporation tax, they are now simply doing it through the super deductions. These are super tax deductions to super tax avoiders. We can name them: Amazon, Vodafone, Virgin, Starbucks and many others. I sat in the Chamber when the global crash happened over a decade ago, and we discovered the intricate corporate structures that the banks used to avoid their taxes—the shell companies based in tax havens from the Channel Islands to the Caribbean. Barclays bank had more than 100 subsidiary companies located in the Cayman Islands alone. As these corporations became increasingly financialised, they became increasingly unprincipled about paying their dues to society.
I have tabled a simple amendment saying that super deductions should not go to companies that are failing to fulfil their duty as taxpayers in our country and that are using tax havens. The reason is simple: these corporations benefit from the workers they employ, and the taxes are needed to pay for their education and training. It is ironic that we are also often using our tax system to subsidise the low pay that these corporations pay their employees. They also benefit from the infrastructure. That is why they should be paying their way within our country itself.
In this struggle over the last 20 years or so, it is worth paying tribute to those who have campaigned so hard: my right hon. Friend the Member for Barking and all those activists, academics and journalists. I pay tribute to groups in the UK such as: Tax Justice Network; UK Uncut, which took direct action; Tax Justice UK; and those journalists and researchers who helped to expose the Panama papers and the Paradise papers. One of those journalists was the Maltese investigative journalist Daphne Caruana Galizia. She was assassinated in 2017 for the work she did to expose tax avoidance and money laundering.
My new clause 22 is very straightforward: no company should be eligible for the tax reliefs in the Bill if they are located, or have subsidiary companies located, in tax haven jurisdictions. The most authoritative list of tax havens or secrecy jurisdictions is the European Union’s blacklist of non-co-operative jurisdictions for tax purposes. That should be the basis of our approach. We are outside the EU now, so we must go further. Subsection (2) gives the Secretary of State powers to list additional jurisdictions that do not co-operate in disclosing information to Her Majesty’s Revenue and Customs. In this way at least we can ensure that we are not, in effect, acting as subsidisers for tax avoiders or laundering tax reliefs into their coffers. It is a simple amendment.
I support the Labour Front Bench amendments and the other amendments that would have a similar effect, but I have had enough. I am sick to death of sitting here listening to excuses from Ministers about failing to act when so much needs to be paid through a fair taxation system. So many of our constituents are having to endure continuing austerity because of the lack of tax revenues. They are living in poverty, unfortunately, as a result of the failure to have a fair taxation system that redistributes wealth in our country.
Danny Kruger (Devizes) (Con)
I rise with great enthusiasm for the proposals set out by the Government, in particular on the super deduction. We heard from my hon. Friend the Member for Wimbledon (Stephen Hammond) about the benefits that super deduction will bring to tax receipts eventually and to growth in the immediate term for our national finances.
I want to talk quickly about a benefit that will be felt locally in Devizes. I spoke today to the boss of Wadworth brewers, the brewers behind the legendary 6X and Bishop’s Tipple, with which you will be familiar, Madam Deputy Speaker. They are not tax avoiders, as the right hon. Member for Hayes and Harlington (John McDonnell) just described them; they are local employers who drive growth and employment in my constituency. They will use the super deduction to invest in more buildings, more jobs, more brewing and more beer in Wiltshire, and I am absolutely delighted to welcome the proposal on their behalf.
There is a real problem that the super deduction proposal seeks to address, which is that, sadly, low corporation tax has not driven the sort of private sector investment we need. I therefore support the rise in corporation tax, which will be imposed on profits on the biggest firms. We live in a topsy-turvy world where we see Joe Biden proposing 15% corporation tax, the Labour party proposing 21%, and my Conservative Government proposing 25%. I recognise the value of that, however: we have to pay the bills of the pandemic somehow and I appreciate that this is the right way. We will still have the lowest corporation tax in the G7. That will make us, with the super deduction and the other measures that have been set out, the best country in the world in which to invest and to bring a business.
Let me finish by stating my support for the world-leading efforts the Government are making to ensure that big tech pays its fair share of tax. We have just heard from the right hon. Member for Barking (Dame Margaret Hodge) that she thinks we should back Biden. I think we should back Britain. We should back what this country and this Government are doing to lead the debate on fair taxation. The key challenge for us is to ensure that the tax that is gathered through whatever global agreement we can make is paid in the right places; it would be a bit of a shame if we achieve a global minimum tax that was all paid in California. I welcome what the Government are doing, and I look forward to the Minister’s response and to the announcements that I hope will be forthcoming ahead of the Cornwall summit. I absolutely back everything the Government are doing through this Bill.
Christine Jardine (Edinburgh West) (LD)
Again in this place, we are talking about the challenges that have been created by the coronavirus—the challenges to our businesses, to individuals and to those who have been excluded from Government support—and the taxation that will have to be used to try to rebuild. In the Finance Bill that the Government have laid before us, I believe that they have missed important opportunities to do that for the benefit of all our constituents. I would echo what the hon. Member for Ealing North (James Murray) said when laying out new clause 23 and when speaking about Biden’s proposals. We have to look at this crisis in a way that we have never approached any crisis before, and on a scale that we have never done with any crisis before. We have to look for measures that will be enacted on a scale that we have never seen before.
I would also like to express my support for the amendments tabled to address and, indeed, stop the malpractice that is rife. These include an amendment tabled following the inquiry by the all-party parliamentary loan charge group into how contracting should work, to stamp out the malpractice and mis-selling to public and private sector freelance and locum workers by unregulated umbrella companies. Those practices have created a climate where tax avoidance schemes are rife and are being mis-sold.
These amendments follow the powerful report by the loan charge APPG, as I have said. BBC Radio 4 has estimated the cost to the Treasury—£1 billion a year in lost tax revenue—and The Guardian has reported that the hidden cost of umbrella companies in the UK may actually be more than £4.5 billion a year. These are some of the opportunities that I believe the Government are missing.
There are also specific amendments before us tonight about measures that would require the Chancellor to review separately the effectiveness of furlough and the self-employment income support scheme, the impact of the Finance Bill on small businesses and the impact of the Bill on transitioning to zero-carbon domestic flights by 2030. All of these, I believe, are opportunities that the Government are failing to take.
The coronavirus has caused the worst economic crisis in three centuries and brought real hardship to our constituents up and down the country in all lines of work. The furlough scheme and SEISS have helped countless people so far, and millions continue to depend on them, but the Government need to think again and review their decision to end the schemes in September. They need to think about extending them into next year. We have all been glad to see cases dropping and restrictions being eased thanks to the vaccine and the NHS, but unfortunately this does not mean that the crisis is behind us.
Covid has left businesses saddled with debt and more vulnerable than ever, especially small businesses, and many are worried that they will not make it through the year. Their employees are rightly worried about their future. As experts warn us about the potential dangers of the new Indian variant, there are worries that the final step of the reopening road map might need to be delayed, or that we might not have seen the last of social distancing.
For all those reasons, it is essential to give workers, self-employed people and small businesses certainty about the future and keep job support in place at least until the end of the year. Even at this late stage, the Chancellor must correct the injustice against the 3 million excluded, who have spent more than a year with no help at all, by finally bringing them under the umbrella of Government support.
I would also like the Chancellor to review the impact of the Bill specifically on small businesses and whether it will offer them adequate help with their debt, rent arrears, solvency and ability to employ people. Small businesses are, as countless Prime Ministers have said, the backbone of our economy and the heart of our local communities. They create the jobs that we all rely on, with 16.8 million people working in small businesses and accounting for six out of 10 private sector jobs. Local shops, cafés, pubs, restaurants, hairdressers and florists all serve our communities and bring life to our town centres and high streets. If allowed not just to survive but to thrive, they can be the engines for growth and jobs in the months and years to come. At the moment, they are struggling under record amounts of debt and months of rent arrears; the collective debt burden is more than £100 billion. According to the Federation of Small Businesses, something like a quarter of a million of its members could close by the end of this year. On top of that, they have been badly hit by the terrible EU trade deal. That is why the Chancellor must adopt a revenue compensation scheme that could help those struggling with their finances and fixed expenses to stay afloat. At the very least, the Government should be undertaking a review to assess the state of UK small businesses and offer the necessary support off the back of that.
Opportunities are also being lost to transition to a zero-carbon economy by 2030. These are all opportunities with which this challenge of many lifetimes has presented us, and which we should seize in order to help individuals, businesses, families and communities up and down the country to recover. The opportunity was there with this Finance Bill, but I do not believe that the Government have grasped it in the way that they should. I ask them to reconsider and accept the amendments.
Anthony Browne (South Cambridgeshire) (Con)
I, too, will abide by your strictures, Madam Deputy Speaker, to keep my speech as short as possible.
When I was an economics correspondent a very, very long time ago, tax competition between countries was all the rage. There was a sort of mainstream consensus that it was a good thing because it helped give countries an incentive to be an attractive place to do business, but in the last couple of decades it has become clear how easy it is for international companies to run circles around national rules and reduce their tax bills by shifting profits to low-tax jurisdictions, and we end up with this outrageous, unconscionable position of some of the world’s largest companies paying some of the smallest corporation tax rates. That causes anger across the UK and on both sides of this House; we are all aligned in the objective of ensuring that big companies pay a fair share of tax.
This Government have been doing an awful lot, as the hon. Member for Ealing North (James Murray) recognised, to try to tackle this issue both within the UK and internationally, including through measures such as the diverted profits tax, the digital services tax and changes on tax to subsidiaries. When I was chief executive of the British Bankers Association, I was involved with a lot of the implementation of those rules.
We need to take measures internationally as well; this is an international problem, so ideally we need an international solution. The difficulty, though, is getting an agreement between a large number of different countries. Normally these sorts of discussions go through the OECD, which is so big that it is difficult to get agreement and progress is absolutely glacial. That is why, on things such as the digital services tax, the UK has opted to act unilaterally before an international agreement can be agreed. I very much welcome the fact that the initiative is now being led by the G7, because we are far more likely to get agreement from seven major countries, and then to expand that out to the G20 and then to the OECD.
As we have heard tonight, particularly from my hon. Friend the Member for Wimbledon (Stephen Hammond), these are complex negotiations. There are two interlinked pillars at the OECD: the scope of the tax and the level of the tax if there is a global minimum rate of corporation tax. As my hon. Friend the Member for Devizes (Danny Kruger) said, there is no point in agreeing a global level of corporation tax if all we are doing is taxing companies in California; the two parts of the negotiations are intertwined. I very much welcome the fact that Government are involved in these negotiations. I completely respect that they may wish to negotiate more in private than in public, as that is often the best way; I know that their intentions are absolutely right.
That brings me to new clause 23. It is the wrong review at the wrong time. The new clause asks the Government to review the corporation tax set at 21%, but, as the hon. Member for Ealing North said, it actually looks like Joe Biden and the US are now looking at 15%, so this proposal is already out of date and it has not even been voted on yet. It is also at the wrong time because what we do not want to do in the middle of an international negotiation is tie our hands, display all our cards and show what we are doing. It could create a dynamic in the negotiations that would actually set back the UK’s ambition to ensure that companies pay a fair rate of tax. I therefore fully support the Government in rejecting the new clause. I also fully support them on reaching a strong global agreement to ensure that the world’s biggest companies pay their fair share of tax.
I hope that that was less than five minutes.
Madam Deputy Speaker (Dame Eleanor Laing)
Definite brownie points for the hon. Gentleman.
Dan Carden (Liverpool, Walton) (Lab)
It is great to follow so many passionate and powerful speeches from my own side of the House in this debate. I am perplexed at the situation Ministers have got themselves into, seemingly exposed by the US President on their real agenda on taxation. In the last year, the pandemic has not just shone a light on the deep inequalities in our society; it has driven and deepened those inequalities like never before. Millions of people have been plunged into insecurity while a small number of the very richest have seen their fortunes surge, with 24 new billionaires in the last year, despite everything else that has been going on. Key workers have put their health and lives on the line for the benefit of others to ensure that their neighbours were fed, people were treated when they were sick and society kept moving, while some bosses at companies such as British Gas and British Airways used the pandemic cynically to drive down pay and terms and conditions through shameful fire and rehire tactics, and all the while the Government have stood by and done nothing. While millions were excluded from Government support and then ignored, if you knew Ministers or had donated to the Tory party, there were billions of pounds of public money in lucrative contracts, handed out without competition or transparency.
So if the Finance Bill was an opportunity to fix a rigged system that was failing communities up and down the country, the track record of this Government tells you that they are incapable of taking that opportunity. The decades-long race to the bottom on corporation tax may finally be coming to an end with the proposal to raise the headline rate in 2023, but alongside it measures in this Bill will do more harm than good when it comes to fair taxation and plugging the hole in the nation’s finances. As we have heard, the super deduction is a £25 billion giveaway to big business. TaxWatch calls it “The Amazon Tax-Cut” because it could entirely wipe out the UK corporate tax bill of Amazon UK Services Ltd. The Times reports that it will allow companies to write off investments in swimming pools, interior decoration and Jacuzzis against their tax bills.
Ministers just are not serious about making tech giants pay their fair share of tax. In fact, Ministers are now rowing back on key commitments they made to tax transparency. Since 2016, the UK has had the power to lift the lid on multinational company accounts through country-by-country reporting, but it is clear that the Government have reversed their original commitment to do so. Instead Ministers are now actively blocking the OECD from publishing the data at an international level, signalling what the Tax Justice Network called a dangerous “regression into tax havenry”.
The UK has been moving in the wrong direction, backing secrecy over transparency, tax havens over progressive taxation and multinational corporations over small and medium-sized UK businesses. That is an agenda that no doubt delighted President Trump, but the election of President Biden now means that the US has done an about turn, and it is time Ministers caught up.
The US is now leading on international tax reforms that the UK has been sabotaging for years—tax reforms that would stop multinationals hiding profits overseas and establish a global minimum tax rate of up to 21%. These are reforms that would raise billions from tech giants and stop Amazon, Apple, Google, Alphabet and Facebook from shifting their profits from the country they were made in to tax havens. While every other G7 country has responded positively to President Biden’s plan, the UK Government continue to block the best opportunity in a generation to curb corporate tax abuse.
The Government, no doubt emboldened by the Trump regime, have been on the wrong side of tax transparency and tax reform for a number of years, but the pandemic has exposed the grave cost of an economic system that prioritises the interests of corporate giants over people and local communities, because wealth does not trickle down—it never has. Rather, it is sucked up, away from those who do the work and who contribute to society, and towards those who set the rules, reap the rewards and, all too often, avoid paying their fair share. That should change now.
Miriam Cates (Penistone and Stocksbridge) (Con) [V]
It is a pleasure to speak on Report of the Finance Bill. Over the past 14 months, the Government’s main concern has been to protect the UK from the worst impacts of the global pandemic. We have seen a comprehensive public health response to slow the spread of coronavirus, and more recently to deliver mass vaccinations on an unprecedented scale, but the Government have also delivered a comprehensive financial response to secure jobs and livelihoods, and to protect the economy. This response has been hugely successful and the most recent Office for Budget Responsibility forecast suggests that the UK economy will recover six months earlier than previously thought. However, essential though this financial response has been, it has cost the taxpayer £407 billion, the majority of which has been debt. This year, we have borrowed a staggering 17% of GDP.
As we emerge from the pandemic, it is imperative that we begin to plan how that debt will be repaid and the deficit reduced. One of the tools at our disposal is to raise levels of taxation, and it is right that any increases should fall on the broadest shoulders. While many small and medium-sized enterprises in my constituency have struggled this year, some of the UK’s biggest businesses have made significant profits. It is only large, often international, companies with profits of over a quarter of a million pounds a year that will be required to pay the highest rate of corporation tax, as stipulated by clause 6.
It is not only the UK that is reconsidering business taxation. Current global efforts to update corporation tax frameworks in response to modern challenges are ongoing, and we have seen reports today of those international negotiations and the positive steps that are being taken to address the current practice by some multinational companies of shifting profits to low-tax jurisdictions. I absolutely support the efforts to end that practice, but I oppose new clause 23, which would compel the Government to publish, within six months of enactment, a review of the impact on corporation taxation revenues of a global minimum rate. Since those matters are still subject to international negotiation, any assessments mandated by the new clause would be purely speculative and a complete waste of resources.
Taxation is not a penalty and should not be an ideology. It is a tool—a mechanism that we can use to ensure that the state can afford to pay for the infrastructure and services that citizens expect. Taxation levels must balance the requirements of those services with the rights of individuals and businesses to have as much agency as possible over their own financial resources. There is no absolute right or wrong level of taxation. Tax rates should change with the times and challenges we face.
The Opposition have spent the past year calling for more taxpayers’ money to be spent on supporting businesses, welfare and health, and they have often rightly framed that demand in moral terms, highlighting the impact of the pandemic on those who have been hardest hit. But all resources are limited, even the state’s. Just as public spending has a moral dimension, so does public debt. It is morally wrong to leave difficult decisions for future generations, rack up eye-watering interest payments for our children and grandchildren, and risk the security of our economy. That is why we must have a plan for reducing our debts. Increasing corporation tax for the largest businesses is an important part of that.
I said that taxation policy is a tool—a mechanism for raising money—but it can also be a catalyst for growth and investment. With the introduction of the super deduction and freeports, which will be discussed when we debate the next group of amendments, I am confident that, unamended, this Finance Bill will kick-start our recovery and help businesses across the country to build back better.
Zarah Sultana (Coventry South) (Lab)
I remember when the pandemic first hit and the Chancellor said that we would all be in it together. Well, the reality has not turned out that way. It has been the story of the many and the few. For the many, it has meant food bank use rocketing—it is up 33% on a year ago. Universal credit claimants have doubled in my constituency and child poverty now affects more than one in three children in Coventry South—nearly 7,000 kids in my constituency alone—and nearly 4.5 million across the country.
While the majority have struggled with falling wages, unemployment and rents that they cannot afford, for a wealthy few it has been a bonanza. Last week The Sunday Times rich list revealed a record growth in UK billionaires, of whom there are now 171 in total. Their wealth stands at £600 billion—up nearly 25%. Amazon, which this year has raked in record revenues of £38 billion across Europe, paid nothing in corporation tax. This is not just a broken economic model—it is not just unfair and unequal—it is rigged. It is redistribution, but not in the way that we might traditionally understand: it is taking from the many and giving it to the few. That is what is happening when we see that food bank use is up 35% and billionaire wealth is up 25%. This Conservative Government not only refuse to tackle that but aid and abet it.
There is nothing in the Bill to tackle the tax loophole that means that income earned through wealth, owned overwhelmingly by the rich, is taxed at a lower rate than income earned through work. There is nothing in the Bill to fairly tax the obscene profit that companies such as Amazon have made during the pandemic, with the Government refusing to embrace a windfall tax. There is nothing in the Bill to provide the necessary investment in Her Majesty’s Revenue and Customs to tackle tax avoidance and evasion by the super-rich and big businesses. Instead, the Government are standing by as the tax gap stands in excess of £35 billion.
What is in the Bill is £15 billion more in annual cuts to Government Departments and a super deduction tax cut in capital spending that the rich are already reported to be using to purchase jacuzzis. To top it all off, there is the Tory Government’s refusal to embrace plans to tackle global tax avoidance. The plans put forward by the US could prevent the likes of Amazon, Google and Facebook from dodging tax and refusing to pay their fair share, and end the race to the bottom on corporate tax rates. Even at a moderate rate of 21%, such a measure could raise £13.5 billion for the UK Treasury, according to Tax Justice UK.
We should not really be surprised by the Government as they are on the side of big business and the super-rich. For a decade they have been cutting taxes while cutting the budgets of schools and hospitals throughout the country. They are also funded by a third of UK billionaires and, of course, they are led by the super-rich, too—not just an old Etonian Prime Minister who complains that his £150,000 salary is not enough, but a Chancellor who went from an elite private school to Oxford to investment banking, before becoming the wealthiest Member of Parliament in this House and using his power to cut the services of the working class.
Instead of this rigged and rotten system, we could make the super-rich pay their fair share to fund our public services and end poverty for all. That is the least the Government should be doing, so they should back the plan for a global minimum corporation tax. They should also back my proposed new clause, which would shine a light on the scandal of tax dodging. Instead of entrenching inequality, the Government could be building an economy for all.
Richard Thomson (Gordon) (SNP)
I rise to speak in favour of new clause 12, which was tabled in my name and those of my Scottish National party colleagues.
We have previously welcomed the planned future increase to the corporation tax rate and we also very much welcome, as have other speakers in the debate, the news reported today in the Financial Times that the G7 nations, or at least some of them, seem to be close to an agreement on minimum rates of corporate taxation. Like other speakers, I take this opportunity to praise and put on the record my admiration for the Biden Administration for having brought the situation about. It is imperative that the UK Government rise to the moment and seize the opportunity to embrace the emerging consensus on global taxation and ending the race to the bottom on corporate tax rates. For a global minimum tax rate for companies will reduce the opportunities for companies to minimise their tax liabilities by funnelling revenues through other jurisdictions. That will help to ensure that more tax gets paid in the jurisdictions where those revenues have been earned. In the process, that helps to uphold living standards and ensure that a fair contribution is paid to the common good by our corporate citizens for the public goods they consume.
New clause 12 follows our efforts at previous stages of the Bill’s progress in trying to oblige the Government to review the impact of the proposed corporation tax changes on all parts of the UK in respect of investment, employment, productivity, GDP growth and poverty, and to compare the difference between actual and forecast outcomes in the event of a deal with other OECD countries on a minimum level of corporation tax, such as I have mentioned, and in the event that such a deal cannot be reached. I also find much to support in new clause 22, as well as amendments 30 and 31.
Frankly, it should be taken as a given that any company qualifying for tax reliefs should be domiciled in the tax jurisdiction offering those reliefs. It should have an exemplary history when it comes to paying taxes that are due on its activities in that jurisdiction and an exemplary record of behaviour towards its employees, in terms of recognising the right to organise their labour and paying a living wage for that labour.
To conclude, in difficult times or in better times, there is nothing that sticks in the collective craw more than large corporate entities that seek to take almost as much from society as they give in return, and which pay much less than they are able and often end up paying proportionately far less than many of their smaller competitors. I am very happy to support these amendments.
Kate Osborne (Jarrow) (Lab)
In March, the Government had the opportunity to set out a plan to build a fairer, healthier, greener Britain. Instead, the Chancellor has chosen to continue down the path of further inequality and insecurity by writing off the tax liabilities of huge multinationals such as Amazon and Google. These big tech firms have made huge profits during the pandemic, and now the Government are enabling them to hide their money from the very people who have sustained them.
The Chancellor’s super deduction incentive is not the innovative idea that he might like to portray it as. The Government’s plan to rapidly increase corporation tax after many years of cutting it means that the super deduction is an incentive to prevent businesses from pushing investment to the end of the period. It will make no difference to investment in the long run. All it does is change when businesses will decide to invest, rather than encouraging them to invest more. The super deduction is not targeted at British businesses that have been struggling. It is targeted at multinationals such as Amazon and Google, which will be able to use it to write off their entire remaining UK tax bill.
The Treasury will lose tens of billions through this tax cut, which makes even more confusing its argument that it has not been possible to find the smaller sums required to give our NHS workers a well-deserved pay rise. It is essential that the income from wealth is taxed at the same level as income from work, and that multinationals such as Amazon are forced to redistribute their huge profits into our communities by paying their fair share of tax. Multinationals paying their tax does not just result in more spending on our public services; it also means that British firms that pay tax here will not be undercut by companies such as Amazon, which can shift profits overseas to take advantage of very low rates of corporation tax elsewhere.
The online shopping boom that sprung from the covid lockdowns has led to Amazon creating more than 1,300 jobs in Gateshead. While job creation in my constituency is welcome, shocking employment practices have been reported at Amazon fulfilment centres in the UK and across the globe. Do the Government really believe that all large corporations should be entitled to tax breaks, regardless of how well or how badly they treat their employees? I join Unite the union in demanding that workers at Amazon have the right to join a trade union without fear of reprisal.
Nothing angers the British public more than multinationals such as Amazon and Google and others paying ultra-low levels of tax. If the Government were serious about their levelling-up agenda, I am sure they would be happy to support new clause 22, which would prevent subsidiary companies registered in tax havens from benefiting from UK tax relief, and new clause 31, which would prevent multinational corporations with a history of corporate tax avoidance from benefiting from the super deductions in the Bill.
Claudia Webbe (Leicester East) (Ind) [V]
When we look at our world today—a world in which half of global wealth belongs to the richest 1%, a world in which large corporations possess more financial power than many post-colonial countries, and a world in which British Amazon warehouse workers earn in eight weeks what the company’s chief executive makes in one second—it is clear that we need to radically reassess how we tax large corporations.
It is therefore shameful, as my hon. Friend the Member for Ealing North (James Murray) made clear, that the British Government are the only G7 Government not to support US President Biden’s plans to halt the race to the bottom on corporation tax. However, I do not believe that even these plans for a global minimum rate of corporation tax for large multinationals go nearly far enough. We should be much, much bolder than the 15% or 20% threshold that is being discussed. After all, we are talking about corporations that have made super profits out of this pandemic and are paying low wages to our workers. The fact that our Government are not even willing to engage with this most basic of proposals reveals how unserious they are about reining in the rampantly unequal power of large corporations.
We know that tech giants currently pay a negligible amount of tax. A report by Fair Tax Mark found that for the Silicon six of Facebook, Apple, Amazon, Netflix, Google and Microsoft, the gap between the expected headline rates of tax and the actual tax paid between 2010 and 2019 was $123 billion. This is as unsustainable as it is unjust.
It is important to bear in mind that billionaires exist when and where workers are exploited, as has been cruelly demonstrated by the testimony of Amazon workers who have bravely and painfully disclosed the conditions under which they are forced to work. Rather than blocking international efforts to address this crisis, the Government must properly tax large corporations and invest to build a radically fairer country. That means not only rejoining the international plan led by President Biden but making the case that the minimum threshold be increased. It is important to remember that in the period post world war two, the top rate of corporation tax was actually as high as 52% for large companies—this, after all, was introduced by a Conservative Chancellor—but in the 1980s it was reduced to 30%. Since 2010, the Conservatives have cut corporation tax from 28% to 19%—by more than most among relatively rich countries. This shows that they would rather raise funds by squeezing the British people than reduce the corporate profits of wealthy shareholders.
The super deduction is wasteful and open to abuse. Are we going to see, as has been reported by The Times and others, tax breaks handed out for investing in swimming pools and jacuzzis as opposed to targeting support at British businesses that have been struggling during the pandemic, or even as opposed to targeting investment to end child poverty? Currently one in two children in my constituency are living in poverty—that is 42% of children who could be saved. Child poverty is a political choice, and this Bill is the proof of that. Are we going to see this measure as opposed to targeting investment to end the starvation wage that workers in Leicester’s garment industry receive while making clothes to fund the super-bonuses of retail brands such as Boohoo and others? Quite simply, the super deduction will allow multinationals such as Amazon to write off their tax liabilities.
As we recover from the coronavirus, we must learn the lessons from the 2008 financial crash. The 99%—the many—must never again be forced to bail out the super-rich. The Government must recognise that in our country of deep and unequal wealth, the ultra-rich and large corporations should be asked to contribute their fair share. Corporation tax is a tax on profits, not people. Cutting it means more profits in the pockets of wealthy shareholders and less in those of nurses and other essential frontline workers. To enable much-needed investment, an increased tax on company profits is necessary and long overdue, and it should be raised above the Government’s 25% limit, which is still the lowest of the G7 countries. Above all, it is vital that we enter the debate around taxing the super, ultra-rich and large corporations with much more ambition, as it is one of the most powerful weapons in the Government’s arsenal to combat the rampant inequality that defines our era.
Jim Shannon (Strangford) (DUP) [V]
I am grateful for the opportunity to highlight a number of issues during the Report stage of the Finance Bill. I am always pleased to see the Minister in his place and I hope that I can put forward some points to which he will be able to reply.
I want to refer to clause 6, in part 1. I have spoken on this issue on numerous occasions, and I am thankful for the clarification the Government have sought to provide. However, I am still left disappointed at the rationale as regards corporation tax. The hon. Member for Leicester East (Claudia Webbe) referred to this as well. The measure sets the charge for the main rate of corporation tax at 19% for the financial years beginning 1 April 2022 and 1 April 2023. These changes mean that from 1 April 2023 the main rate of corporation tax for non-ring-fenced profits will be increased to 25%, applying to profits over £250,000. A small profits rate will also be introduced for companies with profits of £50,000 or less, so they will continue to pay corporation tax at 19%. Companies with profits between £50,000 and £350,000 will pay tax at the main rate, reduced by a marginal relief providing a gradual increase in the effective corporation tax rate.
The impact assessment that the Government have produced highlights the issue that I want to speak about. It states that there is no impact on families, but goes on to say:
“However, if businesses struggle or are unable to pay increased Corporation Tax, this could impact on their family formation, stability or breakdown. To support, HMRC can provide a Time To Pay arrangement.”
The issue is clear, at least in my mind and, I suspect, in the mind of many others: businesses have already struggled. While rates and wages may have been paid, and we are grateful for those schemes, the fact is that many small businesses have still had to pay out rent for equipment that they were precluded from using to make a profit, so their income was massively affected and many people’s personal savings were totally wiped out. They then took out a coronavirus business interruption loan to help them to make it through. We are beginning to come to the other side—thank the Lord for that—where they are seeking to rebuild, but instead of a meaningful reduction, there is merely a stay of execution with corporation tax.
That will affect many businesses and, by extension, many homes and families. It seems that it could well mean the end of many of our small businesses; while that is sad on a personal level, it is devastating on an economic level. We must remember that small and medium-sized businesses are the backbone of our economy. The Financial Secretary and his Conservative Government have been committed to helping small businesses. All those small and medium-sized businesses are the backbone of the whole United Kingdom—they certainly are in my constituency of Strangford.
I repeat what I have said before in this Chamber: there is no point in carrying businesses thus far, only to allow them to flounder now before any repayment is made. The Government have admitted that there will be a reduced incentive to incorporate businesses that would usually seek to take this step. All this has an effect on the long-term income to our economy. I know that the Government want a stronger economy; we all do, and I believe that we need some help.
Northern Ireland is well placed to be a central hub for business. We have much to offer, yet people can go south of the border to lower corporation tax and greater incentives. Along with my colleagues in the Democratic Unionist party, I have often argued for a reduction in corporation tax to attract businesses to Northern Ireland. I believe that the corporation tax rate repels investors, so I urge the Financial Secretary to look at the issue again. I understand that historically he has wanted a UK-wide rate of corporation tax. However, I want a UK-wide customs market, and that is not the case—ask the local small grocer who cannot even get in dog treats to sell because of the Northern Ireland protocol. There are differences made by this insidious protocol that affect our corporations and small businesses alike. It is clear that if the Financial Secretary insists on one size fits all, it must be applied in every aspect of manufacture, delivery and retail.
The Northern Ireland Assembly is establishing a working group on the consequences of creating our own corporation tax band and its effect on our block grant; maybe the Financial Secretary could highlight where those discussions have taken us so far. I believe that there is an opportunity for him to step in and do the right thing for the UK with a view to the long term. That is what I am requesting, even at this very late stage.
The UK is stronger together. I believe that the United Kingdom of Great Britain and Northern Ireland will always be stronger together. That has become the mantra of our Government, and I agree with it, but it needs to be more than words: action must follow the words and show our strengths. I believe that a reasonable rate of corporation tax across the board is a step to strengthen the Union, not cause more division.
Jesse Norman
I am grateful to all Members who have taken part in this debate. Let me pick up on several issues that have been raised, starting with the super deduction. You will be aware, Madam Deputy Speaker, as I think some Opposition Members are not, that it has been described by the CBI as
“a real catalyst for firms”,
while the British Chambers of Commerce said:
“We particularly welcome the massive ‘super deduction’ investment incentive.”
They are absolutely right. It is a terrible shame that the Labour party has decided to try to tarnish the super deduction, a measure from which many capital-intensive businesses around this country will benefit, especially in the north, the north-west, the north-east and the midlands. As my hon. Friend the Member for Devizes (Danny Kruger) rightly picked up, it is a measure that benefits local businesses up and down the UK. He picked Wadworth, a well-known brewer, and rightly so, but there are many, many other businesses for which that is also true. He was absolutely right to highlight that.
Let me come on to questions of wider taxation, if I may. There seems to be an astonishing level of ignorance among Members on the Opposition Benches. They seemed to be unaware that the tax gap—the difference between the amount of tax actually collected and the amount of tax that could potentially be collected—is at its lowest rate in our recorded history, at 4.7%. It may be of some interest if I point out to them—they can reflect on this—that in 2005-06 under the Labour Government it was 7.5%, so it has fallen dramatically, I am pleased to say. Tax that was not being collected by the Labour Government at that time is now being collected by the Conservative Government of the present day, and a very good thing that is too. That is a record on which they should spend some time pondering. The fact of the matter is that this Government have always made it plain that they will be very tough—as tough as they can be—in order to collect the tax that is due and to make sure that corporations and individuals pay it wherever they are due to.
James Murray
I thank so many Members for their contributions to this debate, which has focused on the importance of fairness in the tax system, supporting British businesses and the need for the Government to step up and help to strike a global deal to stop tax avoidance.
We heard from my right hon. Friend the Member for Barking (Dame Margaret Hodge), who spoke with great experience about how the UK should be a prominent voice leading the charge to support President Biden’s proposals. She said that deliberately allowing tax-avoiding large multinationals to benefit from the super deductions is unbelievably foolish. My right hon. Friend the Member for Hayes and Harlington (John McDonnell) spoke about the unfairness of certain firms getting a super deduction. We also heard passionate contributions from my hon. Friends the Members for Liverpool, Walton (Dan Carden), for Coventry South (Zarah Sultana), for Jarrow (Kate Osborne) and for Leicester East (Claudia Webbe) about their and the public’s disbelief that the UK appears to be blocking the best opportunity in a generation to strike a deal on global tax avoidance, especially with the UK hosting the G7 summit in June.
We also heard from Conservative Members. The hon. Member for South Cambridgeshire (Anthony Browne) seemed rather eager to welcome the fall from 21% to 15% as a minimum, rather than wanting to help the US Treasury, which has publicly said that “15% is a floor” and that we
“should continue to be ambitious and push that rate higher.”
The hon. Member for Devizes (Danny Kruger) spoke about backing Biden and backing Britain. That is what our approach seeks to do. His Ministers are backing Bermuda.
Unfortunately, the Minister gave no reassurance in his speech that the Government are committed to taking a lead on this once-in-a-generation opportunity for a global deal on tax avoidance by a few large multinational firms that undermine British businesses and fail to pay their fair share. We were hoping that, today, the Government might finally indicate their support for President Biden’s plans, but instead we heard more of the same nonsensical justification for inaction. Through the vote on our new clause, we will push them to review and be transparent about the impact that a global minimum corporate tax rate no lower than 21% would have.
We were also hoping that the Minister might have indicated his support for our very simple amendment that would stop Amazon and a few other tech giants from benefiting from the tax break that the Chancellor announced at the Budget. He and his colleagues failed to address that point, so we will seek a vote on that amendment to see if any Conservative Back Benchers feel uneasy at their Ministers effectively finishing the job that Amazon started, wiping out the last bit of tax that Amazon would have to pay on the few parts of their business whose profits they have been unable to shift overseas.
This debate has exposed the failure of this Bill and this Government to be on the side of the British people and of British businesses trying to get back on their feet. Ministers have resisted stepping up to the challenge of stopping a few large multinational firms that are not paying their fair share of tax. We urge any Government Members who are uncomfortable with the position that their Government are taking to join us in voting for new clause 23 and amendment 29.
Question put¸ That the clause be read a Second time.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to consider the following:
Amendment 24, page 63, line 9, leave out clause 109.
This and the other amendments relating to clauses 109 to 111 would prevent the creation of freeport tax sites in the UK.
Amendment 25, page 63, line 31, leave out clause 110.
This and the other amendments relating to clauses 109 to 111 would prevent the creation of freeport tax sites in the UK.
Amendment 26, page 64, line 1, leave out clause 111.
This and the other amendments relating to clauses 109 to 111 would prevent the creation of freeport tax sites in the UK.
Abena Oppong-Asare
I rise to speak to new clause 25, tabled in my name, and those of the Leader of the Opposition and my hon. Friends. The new clause sets out a number of tests that we believe the Government must apply to each and every freeport created in the UK. Before I come to the detail of those tests, I will make a couple of brief points about the Government’s intentions behind freeports. As I said in Committee, Labour wants every area to succeed, whether or not it has a freeport. We want good new jobs to be created right across the country, and our great British industries to be protected and supported. We want to see the UK at the forefront of new green manufacturing and technology, and we want a genuine re-distribution of power and opportunity to places that have been denied that for so long.
The Government clearly believe that freeports are a silver bullet for solving regional inequalities, and I simply remind them that they have been in power for 11 years now. Let me repeat that: 11 years. They must own the choices they have made, such as abolishing regional development agencies, cutting local authority funding, and pulling opportunities away from young people in some of the most deprived regions of the UK. Just recently, they scrapped the industrial strategy altogether. We need a proper plan that creates jobs and opportunities for everyone, regardless of where they live.
I will now turn to the new clause, and to the tests against which we believe our freeports should be judged if they are to succeed. First, freeports must create jobs, not simply move them from elsewhere. Too often, attempts at regional rebalancing have simply shuffled jobs around rather than creating them in the places that need them. We must end the scandal of people being forced to move to the other end of the country to find a decent job. Our test will be this: if someone lives near a freeport, will new opportunities be opened to them that did not exist before? Conversely, if an area does not have a freeport, can we be confident that it will not lose jobs as a result of this policy? Of course, any new jobs must be secure and well paid, with trade union rights—the kind of jobs we have not seen anywhere near enough of over the last decade.
Secondly, freeports must deliver improvements in training and skills for local residents. As we begin to recover from the pandemic, the need for re-training will become even more acute. We need a genuine skills guarantee for everyone, and freeports must play their part in that. Labour will be looking to see how companies operating in freeports work with their local communities to provide skills and training opportunities. Rather than a race to the bottom, freeports should be helping to boost skills and open opportunities.
Thirdly, freeports must produce tangible transport and infrastructure improvements beyond the port itself. Too many places still lack basic transport infrastructure, and too many people still find it difficult to get around. The investment that the Government are making in freeports must go towards boosting connectivity for everyone in those areas. We want every community to benefit from affordable and reliable public transport.
Madam Deputy Speaker (Dame Rosie Winterton)
We were having a little difficulty getting hold of the speaker at No. 2 on the list, so I will call Richard Thomson and then come back to David Simmonds.
Richard Thomson
I rise to support new clause 25. It is a pleasure to follow the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) and I would like to echo much of what she said.
We have had freeports before in the UK, as recently as 2012, and our EU partners still have them, with 72 free zones across the EU territory. Some contributors in these debates have taken an excessively, I think, dim view of freeports. I would like to take a more balanced view, but I still think we are absolutely right to proceed cautiously, and that is why I am happy to support new clause 25. Given the incentives on business rates that are on offer, the potential national insurance exemptions and the exemptions on customs duties, it is absolutely vital to make sure that the economic activity attracted to freeports is not simply being displaced from elsewhere, and that the activity is new, adding value and resulting in economic output that is greater than would otherwise have been the case.
Therefore, when we are measuring that impact, it is important to make sure that the Government do not get to mark their own exam paper by choosing their measures of success after the fact. That is why it is important to be able to report back on job creation, skills and productivity, the impact on tax revenues, the levels of financial criminal activity that have resulted around a development and the details of the resourcing needed to ensure compliance with the law, and also to understand the extent to which the mix of industries that will have grown up around a freeport development match those sought in the original bids.
The Scottish Government have sought to build on the freeport model with a green port version of it that embraces all the potential benefits of freeports, while ensuring that the principles of fair work are enshrined at their heart—the principles of fair work and fair pay through a real living wage—and putting environmental concerns to the fore, through placing carbon reduction at the heart of these developments. These proposals for green ports from the Scottish Government already have widespread buy-in from business, industry and investors in Scotland. The Scottish Government stand ready, armed with the fresh mandate they received from the Scottish people earlier this month, to press ahead as soon as the UK Government are willing to do so.
At the conclusion of the Committee stage, the Minister gave—I hope he will not mind me describing it in this way—a somewhat editorialised account of the development of freeports and green ports in Scotland. We could back and forth roundabout that, but I would much rather move forward, just as the Scottish Government would. I hope the Minister would like to do that, too, and will commit to working as quickly as possible with the Scottish Government to bring green ports to fruition in Scotland.
David Simmonds (Ruislip, Northwood and Pinner) (Con) [V]
My constituency is not one of those that has the prospect of playing host to a freeport, or indeed being very close to one, but it is a subject of interest to my constituents for a number of reasons. I want to set out briefly what those are and why it is so important that the Government are pressing ahead in this direction.
My constituents are part of outer London, a part of the country which for many years and many generations has had an enormous economic pull factor, including for people like me. I grew up in the south Wales valleys. Following the disappearance of a lot of the heavy industry that was there, and despite a huge amount of effort by the Westminster Government and significant investment by what was then the European Economic Community to develop things such as roads, it is a place that has taken a very long time to see a significant financial and economic regeneration. While I remain sceptical, as many in the House are, about the tax situation of freeports in general, it seems very clear that they are a fantastic opportunity to play a big part in the economic regeneration and levelling up of parts of our country that have really struggled.
As a Conservative politician, it seems to me clear that a policy that is about ensuring people have access to work, a policy that is part of a wider agenda of raising people’s earnings and addressing things from child poverty to health inequalities, which still blight some parts of our country, and a policy that is very much about setting the principles of what we want to see as our economy develops, rather than taking a laissez-faire approach—we want to see the wealth not simply created, but spread and shared—is absolutely the right way forward. Freeports can be a significant part of achieving that.
It is absolutely right, as we have heard from a number of Members, that we have a balanced approach to the use of freeports. I think the port of Tilbury was the last of the UK freeports, but they are in common use around the world, The feedback is clearly very mixed about their economic impact. However, it is very consistent that they act as a draw, as a focus for a local economy, that helps to contribute to creating jobs and opportunities. As a country, we need to do that in places that have simply not had the opportunity for that in the recent past.
My constituents, who have significant concerns, for example, about the pressure on land to be released for housing to provide homes for the people who are currently being drawn in large numbers into our capital—contributing to significant housing waiting lists and significantly rising house prices, sometimes meaning that the children of people who have grown up and live locally are simply not able to settle in that area—see a direct benefit, too, to the whole country having the opportunity of economic levelling up. I therefore see this as a direct benefit to my constituents. It is important to the medium to long-term future of our country, and it is absolutely an inherent and appropriate part of the regeneration and levelling up strategy that we have for the whole of the United Kingdom. I absolutely 100% support this direction of travel and I commend it to the House.
Dr Jamie Wallis (Bridgend) (Con)
It is a pleasure to contribute to today’s debate on freeports, to voice my continued support for this commitment and to speak against the adoption of new clause 25. For me, new clause 25 typifies the stark contrast that exists between the sides of this House when it comes to delivering for the British people, with the Conservative side supporting a Government focused on delivery and the other side persistent in pursuing yet more division and delay.
As colleagues have already said, freeports will be central to the levelling-up agenda, attracting new businesses and jobs, creating opportunity and investment across areas of Britain. This policy is key to regenerating communities across the UK and I hope that may include my own constituency of Bridgend. Following the closure of the Ford factory in Bridgend, the establishment of a freeport in the Port Talbot and Bridgend area could mean a great deal to my constituents and the whole of south Wales, with the creation of up to 15,000 jobs. It is for those reasons that my constituents would expect me to back the Government tonight.
I am sure Opposition Members do not want to delay the investment associated with the measures in clauses 109 to 111. By implementing them, we will help to unlock employment in areas previously left behind and allow them the opportunity to prosper. The additional reporting requirements for freeports outlined in new clause 25 would impose unnecessary onerous processes, with little to no benefit over and above what has already been put in place; they would just cause further delay.
In Wales, as we know from oral questions to the Secretary of State for Wales in this House last week, the Welsh Labour Government have dragged their feet time and again and have refused to collaborate on this issue with Ministers here. The result is that, although bids have been received and locations have been identified in England, we still do not know what support, if any, a freeport in Wales will get from the Welsh Government.
We were elected to deliver and to get on with the job of making a success of post-Brexit Britain. Clauses 109 to 111 achieve just that. I will therefore be supporting the Government this evening.
Madam Deputy Speaker (Dame Rosie Winterton)
Speaker no. 5 has withdrawn, so we go straight to Andrew Jones.
Andrew Jones (Harrogate and Knaresborough) (Con)
That was slightly unexpected, Madam Deputy Speaker. Thank you very much indeed.
The competition for having a freeport from colleagues around the House before the decisions showed how widely welcomed this policy was. We saw colleagues’ delight when their areas were successful. It is clear that freeports are part of a broader levelling-up agenda, which is at the heart of the Government’s policy and has significant public approval. When knocking on the doors of Hartlepool, I found support for initiatives to boost the economy of that area. I do not represent a freeport area in Harrogate and Knaresborough, but there is clear support, and it is therefore surprising that the Labour party is not more aligned behind it.
A well-designed freeport policy can boost trade. The key to that is the alignment of local bodies, whether the ports or the businesses, with local authorities to grow opportunity. Of course, all that is underpinned by tax reliefs and tax incentives. It is most important that we get tax reliefs on buildings and plant purchase right. If the policy does not deliver, we will have wasted public money and we will have seen the displacement of economic activity, rather than incremental economic activity. Even more significant, of course, would be the missed opportunity. The areas that are receiving freeports are those that have not had the chance that other parts of the country have had over the past decades. I know that my right hon. Friend the Minister knows that.
The Labour party has said measures are necessary before it can even consider supporting the policy, but there are already measures in place to monitor, collect and review data. The Treasury always monitors and reviews its policies. I have seen that from my own experience, but it is a truth that we all know. Therefore, new clause 25 addresses a concern that is, frankly, already solved; it is not necessary. On transparency, costings will be published at the next fiscal event—in other words, in the usual way. On data collection for freeports, we will be collecting data on reliefs, monitoring effectiveness and so on. The main question now is not about monitoring; it is about how those running the freeports can make them bigger, seize the opportunities and maximise the chances available.
As this health crisis morphs into an economic one, the focus is moving to recovering livelihoods as well as saving lives. All the levers that can drive growth must be pulled and freeports are clearly a part of that. It was very good to see the proposals in the Finance Bill. I will be supporting them strongly this evening.
John McDonnell [V]
I am glad you are sitting down, Madam Deputy Speaker, because I do not want to shock you. I want to see if we can try something different tonight. Let us try and undertake some rational policy making. Let us try and base policy on evidence, shall we?
I have tabled a number of amendments—Nos. 24, 25 and 26—as a humble seeker after truth, basically, because I do not think the Government have made the case for freeports. I also think that the risks of this policy are huge. It could accelerate tax avoidance in this country on a massive scale and cause economic damage to the neighbouring areas of freeports. We are shovelling huge tax giveaways to corporations and developers for, as far as I can see, literally no return to society.
In its analysis of the Chancellor’s Budget, the Office for Budget Responsibility said of freeports:
“Further details have been announced in the Budget but came too late to be incorporated into our forecast.”
The OBR have therefore not made a comment—we await it. Freeports were not assessed by the OBR. However, it is not just the OBR that does not know the answer about the effects of freeports; neither do the Government. My hon. Friend the Member for Oxford East (Anneliese Dodds) asked the Treasury on 16 March what estimates it had made of the total annual cost of tax reliefs granted to the freeports. The Chief Secretary to the Treasury replied on 22 March to say—rarely have I seen this from a ministerial response—that
“it is not appropriate to comment on estimates at this stage.”
This is in the middle of policy making! He continued:
“they will therefore be scored at a future fiscal event.”
Therefore, what we are being asked to do tonight is sign off a blank cheque that will be filled in at a later date.
This is just irrational. Shoddy policy making on this scale is becoming all too familiar with this Government, but this is a bit of a shocker. It is just not good enough, so it would be really useful if tonight the Minister took us through the answers to a few simple questions. What are the annual costs of the proposed tax reliefs when the freeports are set up? What is the estimate of increased economic growth that will come from them? What is the estimate of increased job creation stimulated by the freeports? What is the estimate of increased tax revenues to the Exchequer as a result of this policy? And, to reinforce that, where is the evidence? If there are answers to those questions, where have they come from? Have they been independently assessed?
We are asking questions about the future, but we should look back, because this is not a new policy. Those of us who have been in the House a while—and that does not take long—can recognise this as a rebranding of the enterprise zones policy that the Conservative party wheeled out in the 1980s under Michael Heseltine and also in the last decade, when George Osborne fronted it up. Let me remind the House what the Public Accounts Committee said in May 2014. Its report was pretty damning about George Osborne’s enterprise zones, describing them as “particularly underwhelming”. The Committee criticised the Government for over-optimistic claims about job creation. The job numbers did not materialise—it is as simple as that. The Centre for Cities think-tank found that the jobs that were created were “overwhelmingly low skilled” and therefore low paid.
Enterprise zones were not just a disaster; they raised people’s hopes and shattered them in many areas around the country, and in many ways led to some of the disillusionment with politics and Government overall. Tax breaks for corporations in underinvested areas just does not make an industrial strategy. My view is that the Government should be investing, but in a planned upgrading of the infrastructure of this country, not making areas fight for scraps in this form of pork barrel politics.
The Conservatives’ strategy of tax breaks for developers and big business as a way of stimulating growth failed in the 1980s and again in the 2010s, and it risks failing again in the 2020s. The Government are asking us all to take a leap in the dark, and having twice before witnessed that leap in the dark, I think the result will be the same—it will be failure. I know that a number of Members, including some Ministers, have said it will be different because of Brexit and claim that being outside the EU gives greater freedoms than were available to enterprise zones, but if that is the case, why can they not quantify them and put that evidence in front of the House, in some form of rational policy making? The UK Trade Policy Observatory, based at the University of Sussex, has pointed out that as UK import tariffs are already low, any further tariff reduction would
“have next to no benefits”.
I am pleased that Labour’s Front-Bench team is behind new clause 25, which my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare) moved eloquently, as it is welcome. If passed, it would at least have the effect of creating a robust framework for the House to assess the success or failure of freeports policy, but surely no Members of this House who consider themselves to be serious, rational policy makers can vote for something like this proposal, which is so lacking in any evidential base.
Jacob Young (Redcar) (Con)
It is a pleasure to follow the right hon. Member for Hayes and Harlington (John McDonnell), although he will forgive me for not taking any economic advice from him. He talks about economic assessment with no sense of self-awareness that he was the man responsible for the 2019 Labour party manifesto. I believe I am the first Member to speak who shall represent a freeport area, so, on behalf of the people of Teesside, may I say thank you to the Government for designating us a freeport zone?
I wish to speak against new clause 25, which would only delay the implementation of our new freeport policy. I direct Members to my recently updated entry in the Register of Members’ Financial Interests, as a member of the new—currently shadow—Teesside freeport board. If we consider the intentions behind new clause 25, we will see that they are ones that Teessiders know all too well. Labour never wanted our new freeports, despite them being in places such as Redcar and Cleveland, Middlesbrough and Hartlepool, places that Labour used to say it cared about. True to form, new clause 25 is the Labour party in desperation to see our freeport policy fail, so that it can simply say, “I told you so.”
The same attitudes were shown in Labour’s position on the EU referendum, and the people of Teesside have already shown them how they feel about that. Our new freeport in Teesside will create 18,000 jobs over the next five years, and since the freeport designation in the Chancellor’s Budget, we have already seen the announcement of more than 2,000 jobs coming to Teesside, with GE picking Teesside as the destination for its new wind turbine blade manufacturing, supporting the Government’s plan for a green industrial revolution. Adding more bureaucracy, form filling and complications through new clause 25 would only delay those new jobs and prevent us from getting on with the task at hand, which is the transformation of Teesside.
In Redcar and Cleveland we are proud of our area’s industrial heritage and the vital role the steelworks and foundries have played in the past, providing those raw materials to build the railways, ships and bridges that were once the envy of the world, and in many cases still are. The fires in our furnaces were the beating heart of the industrial revolution, and now with hydrogen, wind power and carbon capture all promised and planned within our freeport zone, it will be Teesside’s innovation and technology that leads our green industrial revolution.
When Labour lost Hartlepool, the front page of The Northern Echo held a column from a former Labour MP saying that Labour needs to listen. Well, now would be a good time to start, but instead, here we are again, with the public supporting our freeport policy and Labour voting against it. Labour Members may not want any election advice from me, but I have some for them anyway: stop dwelling on problems and start looking to the potential and to solutions. Stop standing in the way of our freeport policy and work with us to make it a success. Stop talking Teesside down and start helping us to turn it around, and vote against new clause 25 tonight.
Robin Millar (Aberconwy) (Con)
It is a privilege to follow my hon. Friend the Member for Redcar (Jacob Young). Like him, I shall take this opportunity to make a few brief remarks in support of freeports, although, as hon. Members would expect, they will be in support of a freeport in Wales, and north Wales in particular. In doing so, I shall speak against new clause 25.
Freeports and free economic zones are a common feature of international trade, with dozens utilised by our closest allies. Not only have they propelled many of the world’s previously impoverished nations to prosperity, but there are well-established international frameworks for their operation. Indeed, the OECD code of conduct for clean free trade zones is an example, to which this Government have already pledged compliance.
The measures set out in new clause 25 are simply unnecessary, and the additional costs, such as the paperwork proposed, will only reduce the attractiveness of Britain’s ports. Let us make no mistake: the ultimate bearer of extra costs will be not multinational business, but the workers of this country who will miss out on prosperity from export-driven work.
Wales occupies a vital position in UK trade. If we consider just the Republic of Ireland, we will see that in 2019, two thirds of goods carried from the Republic of Ireland came via Wales, and four fifths of goods carried to the Republic of Ireland went via Wales. I also note that Holyhead is on the international trade routes that link Dublin to Moscow, such is the strategic importance of the location and role of Wales—particularly of north Wales. It is essential, therefore, that we create an environment there that is attractive to investment and private finance. According to the British Venture Capital Association, Wales has one of the lowest average investments from venture capital in the UK, accounting for just 3.3% of all funding over the period 2016 to 2018.
A freeport offers a structured environment for investment. Whether linked with the advanced manufacturing cluster of north-east Wales—Wales’s hottest economic growth spot—or the green energy projects and innovation found on Ynys Môn, or the leading telecoms research at the University College of North Wales, the structured reliefs and incentives of a freeport offer businesses and investors a clear and attractive proposition and are a clear demonstration of the Government’s commitment to the area.
This Finance Bill makes clear the Government’s aim of growth, development and levelling up for Wales. It also presents an exciting opportunity for co-operation and collaboration with the Welsh Government. With their assistance on, for example, the additional reliefs possible for the planning laws within their control, there is an opportunity not only to deliver a freeport in Wales, but to create one of the most attractive freeport models for investment in the UK.
In conclusion, our United Kingdom is an island nation and a trading nation, and our prosperity has always come from across the seas. Freeports are an essential step towards stronger trade and exports in a global Britain, and this Finance Bill will deliver that. In Wales, we know that, although we are outward-looking, our strength comes from within. For centuries, we have exported our goods and resources around the globe. North Wales slate has roofed the world, and copper from the Great Orme in Aberconwy was used to forge bronze-age implements used in areas ranging from Brittany to the Baltic.
A freeport in Wales—in north Wales—is an opportunity to ensure our connection to a global economy, to bring investment and growth that will bring jobs, and to secure our tradition of global export for another generation. I shall be voting against new clause 25.
Jesse Norman
I thank all Members who have commented or spoken in this debate on freeports. As the House will know, freeports are a very important part of the Government’s policy to level up the British economy and to bring investment, trade and jobs to parts of the country that in many cases have not had the economic vibrancy that we as a nation would have wished. They symbolise and reinforce the opportunities provided by this country’s status as an outward-looking trading nation, open to the world.
Abena Oppong-Asare
I thank all Members who have spoken for their contributions. In particular, I thank my right hon. Friend the Member for Hayes and Harlington (John McDonnell), who raised a number of concerns—including on tax avoidance and the potential damage to nearby areas—about how freeports will operate.
The Government Members who spoke in the debate are obviously more optimistic about the potential impacts of freeports on the communities that they represent. In respect of the comment made by the hon. Member for Redcar (Jacob Young), let me say that no one is talking Teesside down. I am very clear that we want to make sure that everyone will succeed, whether or not they have a freeport in their area. Why is that a bad thing?
We believe that our new clause and the tests it contains set out a reasonable way to assess the impact of freeports on their local areas and the country as a whole. We on the Opposition Benches are ambitious for our country, but we need to see clear evidence that freeports are going to be effective in meeting the challenges that we face. I therefore call on Members to support our new clause, because it is the right thing to do.
Question put, That the clause be read a Second time.
Mr Deputy Speaker (Mr Nigel Evans)
With this it will be convenient to consider the following:
New clause 1—Equality impact analysis—
‘(1) The Chancellor of the Exchequer must review the equality impact of sections 87 to 89 and schedule 16 and 17 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the impact of those sections on—
(a) households at different levels of income,
(b) people with protected characteristics (within the meaning of the Equality Act 2010),
(c) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, and
(d) equality in England, Northern Ireland and in different regions of England.
(3) A review under this section must provide a separate analysis in relation to each of the following matters—
(a) the temporary period for reduced rates on residential property,
(b) increased rates for non-resident transactions, and
(c) relief from higher rate charge for certain housing co-operatives etc.
(4) In this section “regions of England” has the same meaning as that used by the Office for National Statistics.’
This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of sections 87 to 89 and schedules 16 and 17 of the Bill on equality in relation to households with different levels of income, people with protected characteristics, the Treasury’s public sector equality duty and on a geographical basis.
New clause 24—Review of impact of 2% non-resident surcharge—
‘(1) The Chancellor of the Exchequer must review the impact of section 88 and schedule 16 of this Act on tax revenues, residential property prices, affordability of residential property, and the volume of property purchases by non-residents, and lay a report of that review before the House of Commons within six months of the passing of this Act and once a year thereafter.
(2) The review under this section must include an assessment of what those impacts would have been if the provisions in the Draft Registration of Overseas Entities Bill had been in force.’
This new clause would require the Government to report on the effect of the 2% stamp duty land tax non-resident surcharge on tax revenues, property prices and affordability, and the volume of property purchases by non-residents, and also to assess what the impacts would have been if the Draft Registration of Overseas Entities Bill were in force.
Government amendments 4 to 6.
Government new clauses 17 to 20.
New clause 3—Review into the effects of replacement of LIBOR—
‘(1) The Chancellor of the Exchequer must undertake a review within six months of the passing of this Act of the effects of sections 128 and 129.
(2) This review must consider—
(a) the implications for tax revenue,
(b) effects on financial stability, and
(c) effects on businesses that use LIBOR as a benchmark, including businesses offering supply chain finance.’
This new clause would require a review into the effects of the provisions of the Bill about replacing LIBOR.
New clause 4—Assessment of environmental impact of Act—
‘(1) The Chancellor of the Exchequer must review the effectiveness of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must assess the effects of the provisions on—
(a) the achievement of the Government’s targets to reduce carbon emissions, and
(b) the United Kingdom’s progress towards net-zero emissions.’
New clause 5—Equality impact analyses of provisions of this Act—
‘(1) The Chancellor of the Exchequer must review the equality impact of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the impact of those provisions on—
(a) households at different levels of income,
(b) people with protected characteristics (within the meaning of the Equality Act 2010),
(c) the Government’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, and
(d) equality in different parts of the United Kingdom and different regions of England.
(3) A review under this section must include a separate analysis of each section of the Act, and must also consider the cumulative impact of the Act as a whole.’
New clause 7—Analysis of effectiveness of provisions of this Act on tax avoidance and evasion—
(1) The Chancellor of the Exchequer must review the effectiveness of the provisions of this Act in accordance with this section and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must—
(a) assess the effects of the provisions in reducing levels of artificial tax avoidance,
(b) assess the effects of the provisions in combating tax evasion and money laundering, and
(c) estimate the role of the provisions of this Act in reducing the tax gap in each tax year from 2021 to 2024.’
New clause 8—Review of public health and poverty effects—
‘(1) The Chancellor of the Exchequer must review the public health and poverty effects of the provisions of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the effects of the provisions of this Act on the levels of relative and absolute poverty in the UK,
(b) the effects of the provisions of this Act on socioeconomic inequalities and on population groups with protected characteristics as defined by the 2010 Equality Act,
(c) the effects of the provisions of this Act on life expectancy and healthy life expectancy in the UK, and
(d) the implications for the public finances of the public health effects of the provisions of this Act.’
New clause 9—Review of changes to coronavirus support payments etc—
‘(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to coronavirus support payments etc by this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) business investment,
(b) employment,
(c) productivity,
(d) GDP growth, and
(e) poverty.
(3) A review under this section must consider the following scenarios—
(a) the coronavirus job retention scheme and the self-employment income support scheme are continued until 30th September 2021, and
(b) the coronavirus job retention scheme and self- employment income support scheme are continued until 31st December 2021.
(4) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.’
This new clause would require a report comparing the effect of (a) the coronavirus job retention scheme and the self-employment income support scheme being continued until 30 September 2021 and (b) the coronavirus job retention scheme and self-employment income support scheme being continued until 31 December 2021 on various economic indicators.
New clause 10—Review of changes to VAT—
‘(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to VAT by this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) business investment,
(b) employment,
(c) productivity,
(d) GDP growth, and
(e) poverty.
(3) A review under this section must consider the following scenarios—
(a) the extension of temporary 5% reduced rate for hospitality and tourism sectors is continued until 30th September 2021, and
(b) the extension of temporary 5% reduced rate for hospitality and tourism sectors is continued until 31st December 2021.
(4) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.’
This new clause would require a review comparing (a) the extension of temporary 5% reduced rate for hospitality and tourism sectors being continued until 30 September 2021 and (b) the extension of temporary 5% reduced rate for hospitality and tourism sectors being continued until 31 December on various economic indicators.
New clause 11—Review of effect on tax revenues—
‘(1) The Chancellor of the Exchequer must review the effects on tax revenues of the provisions of this Act, and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must—
(a) consider the expected change in corporation and income tax paid attributable to the provisions, and
(b) make an estimate of any change attributable to the provisions in the difference between the amount of tax required to be paid to the Commissioners and the amount paid.
(3) The reference to tax required to be paid in subsection 2(b) includes taxes payable by the owners and employees of Scottish limited partnerships.’
This new clause would require a report on the impact of the provisions of the Bill on narrowing the tax gap, assessing the impact of: (a) the expected change in corporation and income tax paid attributable to the provisions and (b) any change, attributable to the provisions, in the difference between the amount of tax required to be paid to the Commissioners and the amount paid. In particular, this includes taxes payable by the owners and employees of Scottish limited partnerships.
New clause 13—Review of impact on GDP—
‘(1) The Chancellor of the Exchequer must review the impact in parts of the United Kingdom and regions of England of the changes made by this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must compare estimated GDP in each of the next five years under the following scenarios—
(a) these provisions are enacted,
(b) these provisions are not enacted, and
(c) the UK fiscal stimulus package, as a percentage of GDP, mirrors that of the United States.
(3) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.’
This new clause would require a report on the impact on GDP of the provisions in the Bill, comparing them with the impact of copying the level of fiscal intervention in the US.
New clause 14—Report on Part 2—
‘(1) The Secretary of State shall, before 1 April 2023, publish a report on the impact of the provisions in Part 2 of this Act.
(2) The report in subsection (1) shall include consideration of the impact on—
(a) the rate of plastic recycling in the UK generally,
(b) the rate of PET plastic recycling in the UK,
(c) the rate of Polypropylene plastic recycling in the UK, and
(d) the rate of HDPE plastic recycling in the UK.
(3) The report in subsection (1) shall include consideration of the impact on—
(a) the volume of plastic used in the UK,
(b) the volume of PET plastic used in the UK,
(c) the volume of Polypropylene plastic used in the UK, and
(d) the volume of HDPE plastic used in the UK.
(4) The report in subsection (1) shall include consideration of the impact on—
(a) the volume of plastic stockpiling in the UK,
(b) the volume of PET plastic stockpiling in the UK,
(c) the volume of Polypropylene plastic stockpiling in the UK, and
(d) the volume of HDPE plastic stockpiling in the UK.
(5) The report in subsection (1) shall consider whether—
(a) £200/tonne provides an economic incentive to change the content of packaging for those types of plastic specified in subsection (2),
(b) the economic incentive in subsection (5)(a) remains in the event of lower than average oil prices, and
(c) a tax escalator might be more efficacious.’
This new clause would require a review of the efficacy of the proposed plastic packaging tax, with respect to whether the proposals will (a) increase use of certain plastics and (b) provide an incentive to recycle in the event of lower than average oil prices.
New clause 15—Review of impact on climate emissions—
‘(1) The Chancellor of the Exchequer must review the impact on climate emissions in parts of the United Kingdom and regions of England of the changes made by this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions of the Act on progress towards the Government’s climate emissions targets.
(3) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.’
This new clause would require a report on the effects of the Bill on progress towards the UK Government’s climate emissions targets.
New clause 16—Review of impact of section 104—
‘(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by section 104 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on the volume of gambling, including—
(a) the number of people who take part in gambling,
(b) the amount of money spent on gambling, and
(c) the gross gaming yield.
(3) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.’
This new clause would require a report on the effects of section 104 on the volume of gambling.
New clause 21—Impact of Act on human and ecological health and wellbeing—
‘The Chancellor of the Exchequer must review the impact of the provisions of this Act on human and ecological health and wellbeing, including the wellbeing of future generations, and lay a report of that review before both Houses of Parliament within six months of the passing of this Act.’
This new clause would require the Chancellor of the Exchequer to review the impact of the Finance Bill on human and ecological health and wellbeing, including the wellbeing of future generations.
New clause 26—Review of coronavirus job support schemes—
‘(1) The Chancellor of the Exchequer must lay before Parliament within three months of the passing of this Act a report on the impact of sections 31 to 33 of this Act.
(2) The report must consider the effects of the following two scenarios—
(a) the coronavirus job retention scheme and the self-employment income support scheme are continued until 30th September 2021, and
(b) the coronavirus job retention scheme and self- employment income support scheme are continued until 31st December 2021, and the following categories of workers are made eligible for the schemes—
(i) limited company directors,
(ii) self-employed workers earning more than 50% of their income from employment, and
(iii) self-employed workers with profits over £50,000.
(3) A review under this section must consider the effects of the provisions on—
(a) employment,
(b) GDP growth,
(c) personal debt, and
(d) poverty.’
New clause 27—Review of effect on small businesses—
‘(1) The Chancellor of the Exchequer must lay before Parliament within six months of the passing of this Act a review considering the effects of this Act on small businesses that have been subject to restrictions on trading as a result of the pandemic.
(2) The review must consider the following issues—
(a) debt,
(b) rent arrears,
(c) solvency, and
(d) the ability of small businesses to employ individuals.’
New clause 28—Review of effect on carbon emissions—
‘The Chancellor of the Exchequer must lay before Parliament within six months of the passing of this Act a review on the effect of the provisions of the Act on—
(a) a transition towards zero-carbon domestic flights by 2030,
(b) any reduction in the share of the UK’s carbon emissions coming from international flight travel, and
(c) the number of individuals booking more than three international flights a year.’
New clause 29—Review of effect on supply chain and other workers—
‘(1) The Chancellor of the Exchequer must lay before Parliament within six months of the passing of this Act a review considering the effects of the provisions of this Act on the following categories of—
(a) workers, employees and self-employed individuals in the supply chain sector,
(b) employees on zero-hours contracts and agency workers, and
(c) office workers in different income deciles that have worked remotely since March 2020.
(2) The review must include an assessment with regard to—
(a) employment income, and
(b) socioeconomic inequalities.’
New clause 31—Review of section 21—
‘(1) The Chancellor of the Exchequer must review the impact of section 21 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the impact of section 21 on levels of tax avoidance,
(b) the impact of section 21 on levels of tax avoidance if section 61O of ITEPA 2003 were amended to prohibit the operation of umbrella companies, and
(c) the impact of section 21 on levels of tax avoidance if section 61O of ITEPA 2003 were amended to mean that an umbrella company would not be an intermediary but would still be able to operate, provided that the following conditions were met—
(i) the worker had no material interest in the umbrella company;
(ii) the umbrella company received the monies from the agency and used the entire amount to process as earnings, including the total cost of employment, less a transparent intermediary margin;
(iii) at the end of the engagement, any outstanding holiday pay was paid;
(iv) all employment rights, including agency workers’ rights, were maintained; and
(v) no payment was given to any other party.’
Amendment 23, page 2, line 15, leave out clause 5.
This amendment would ensure that the thresholds for the personal allowance and for the higher rate of income tax rise in line with inflation as per the Income Tax Act 2007.
Amendment 27, in clause 15, page 9, line 16, at end insert—
“(3) The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons a report—
(a) analysing the fiscal and economic effects of Government relief under the annual investment allowance scheme and the changes in those effects which it estimates will occur as a result of the provisions of this section, in respect of—
(i) each NUTS 1 statistical region of England and England as a whole,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland, and
(b) assessing how the annual investment allowance scheme is furthering efforts to mitigate climate change, and any differences in the benefit of this funding in respect of—
(i) each NUTS 1 statistical region of England and England as a whole,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland.”
This amendment would require the Chancellor of the Exchequer to analyse the impact of changes proposed in Clause 15 in terms of impact on the economy and geographical reach and to assess the impact of the investment allowance scheme on efforts to mitigate climate change.
Amendment 28, in clause 19, page 13, line 12, at end insert—
“(3) The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons a report—
(a) analysing the fiscal and economic effects of Government relief in relation to R&D tax credits for SMEs and the changes in those effects which it estimates will occur as a result of the provisions of this section and schedules 3 and 4, in respect of—
(i) each NUTS 1 statistical region of England and England as a whole,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland, and
(b) assessing how R&D tax credits for SMEs are furthering efforts to mitigate climate change, and any differences in the benefit of this funding in respect of—
(i) each NUTS 1 statistical region of England and England as a whole,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland.”
This amendment would require the Chancellor of the Exchequer to analyse the impact of changes proposed in Clause 19 in terms of impact on the economy and geographical reach and to assess the impact of R&D tax credits on efforts to mitigate climate change.
Amendment 32, in clause 21, page 13, line 33, after “(1B)” insert “or (1C)”.
Amendment 33, page 14, line 9, at end insert—
“(1C) This subsection is satisfied where—
(a) the worker has no material interest in the intermediary,
(b) the worker—
(i) has received,
(ii) has rights which entitle, or which in any circumstances would entitle, the worker to receive, or
(iii) expects to receive,
a chain payment from the intermediary.
(c) If any of the conditions A, B or C in this subsection apply, then this exempts the person within the chain from being an intermediary.
(d) Condition A is that the services are supplied by or through a third person (“the agency”) where all income received and receivable for those services wholly constitutes employment income subject to Chapter 7 of Part 2 of ITEPA 2003.
(e) Condition B is that the worker is employed under a contract of employment within the meaning of section 230(2) of the Employment Rights Act 1996 and is ordinarily or habitually employed by the intermediary prior to being engaged by the Client, either directly or via an agency, and has been engaged by the Client on a secondment basis.
(f) Condition C is that all of the following apply—
(i) the worker is employed by the intermediary under a contract of employment within the meaning of section 230(2) of the Employment Rights Act 1996,
(ii) the worker, if engaged via an agency, has not given notice of an agreement with the intermediary that paragraphs (1) to (8) of regulation 32(9) of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 shall not apply,
(iii) all income received and receivable by the worker wholly constitutes employment income from the intermediary,
(iv) the total of the payment elements paid to the worker during the entire engagement are equal to or greater than the sums of chain payments made to the intermediary during the engagement,
(v) the intermediary is not in breach of Section 54 of the Pensions Act 2008, and
(vi) the intermediary is not in breach of Paragraph 3A of Schedule 1 of the Social Security Contributions and Benefits Act 1992.
(g) A “payment element” means any of the following—
(i) secondary Class 1 National Insurance Contributions, as defined by section 6 of the Contributions and Benefits Act,
(ii) apprenticeship Levy as defined by Part 6, section 98, of the Finance Act 2016,
(iii) pension contributions, which shall mean contributions paid into registered pension schemes by their employers that are subject to the exemption provided by Section 308 of ITEPA 2003,
(iv) intermediary margin, which shall mean a fixed fee deducted from the chain payment, the amount of which has been declared to the contractor prior to becoming an employee,
(v) holiday pay, which means any amounts paid to the worker under the Working Time Regulations 1998 either during or upon termination of the engagement,
(vi) net employment income, which shall mean employment income paid to the worker after deduction of Income Tax under PAYE, Class 1 primary National Insurance Contributions, and Student Loans deductions,
(vii) allowable expenses, which shall mean any reimbursement of expenses to the worker by the intermediary permitted as per Chapter 2 of Part 5 of ITEPA 2003.
(h) In (1C)(g) “secondment” shall mean the provision of any worker by means of a resource augmentation service or temporary transfer of an official or worker to another position or employment away from their primary job with the Intermediary.
(i) Where the fee-payer, defined in 61N(2), has been provided with information from the intermediary that gives them reasonable belief that any of the Conditions A to C are met, then section 61N(5) does not apply, and the client cannot become the fee-payer under 61NA subsections (3) and (4).
(j) The amendments made by this subsection (1C) have effect in relation to deemed direct payments treated as made on or after 6 April 2022.”
Amendment 34, page 14, line 9, at end insert—
“(1C) This subsection is satisfied where—
(a) the worker has no material interest in the intermediary,
(b) the worker—
(i) has received,
(ii) has rights which entitle, or which in any circumstances would entitle, the worker to receive, or
(iii) expects to receive,
a chain payment from the intermediary.
(c) If any of the conditions A, B or C in this subsection apply, then this exempts the person within the chain from being an intermediary.
(d) Condition A is that the services are supplied by or through a third person (“the agency”) where all income received and receivable for those services wholly constitutes employment income subject to Chapter 7 of Part 2 of ITEPA 2003.
(e) Condition B is that the worker is employed under a contract of employment within the meaning of section 230(2) of the Employment Rights Act 1996 and is ordinarily or habitually employed by the intermediary prior to being engaged by the Client, either directly or via an agency, and has been engaged by the Client on a secondment basis.
(f) In (1C)(e) “secondment” shall mean the provision of any worker by means of a resource augmentation service or temporary transfer of an official or worker to another position or employment away from their primary job with the Intermediary.
(g) Where the fee-payer, defined in 61N(2), has been provided with information from the intermediary that gives them reasonable belief that either of the Conditions A to B are met, then section 61N(5) does not apply, and the client cannot become the fee-payer under 61NA subsections (3) and (4).
(h) The amendments made by this subsection (1C) have effect in relation to deemed direct payments treated as made on or after 6 April 2022.”
Government new schedule 1.
Government amendment 3.
Government amendments 7 to 22.
Abena Oppong-Asare
I rise to speak to new clauses 2 and 24, tabled by the Leader of the Opposition, other hon. and right hon. Friends and myself.
New clause 2 draws attention to the announcement made by the Chancellor in 2019, when he was Chief Secretary to the Treasury, on implementing a non-resident stamp duty surcharge at 3%. As hon. Members will have noted, the Finance Bill introduces a non-resident surcharge at 2% rather than 3%. In Committee, I asked the Minister why the Government had watered down that commitment; I do not believe I have received an answer. We believe that this means that the Government will lose out on about £52 million a year in revenue, which they said they would have spent on tackling homelessness and rough sleeping. Perhaps the Minister could use his closing speech to clear up any confusion. Why have the Government moved from a 3% to 2% non-resident surcharge, and what assessment has been made of the impact on tax revenues and the housing market?
I turn to new clause 24. In Committee of the whole House, my hon. Friend the Member for Ealing North (James Murray) asked the Financial Secretary to the Treasury to explain whether the Government will meet their own deadline of introducing legislation to set up a register of overseas entities by 2021. The Minister’s response was that
“the Government plan to introduce the Bill in due course.”—[Official Report, 20 April 2021; Vol. 692, c. 914.]
Since that debate in Committee of the whole House, we have had the Queen’s Speech—the Government’s opportunity to lay out their legislative plans for the year ahead. I listened carefully to that speech and read the accompanying notes, but I heard no mention of the registration of overseas entities Bill.
It is now more than five years since David Cameron first announced proposals to introduce a beneficial ownership register for UK property owned by overseas companies and legal entities. Since then, we have had more announcements, consultations and draft Bills, but still no indication from the Government of when they intend to introduce this vital piece of legislation. The failure to include it in this year’s Queen’s Speech means that it is now beyond doubt that the Government will miss their 2021 deadline.
It is worth considering what that means more broadly. First, let us look at the scale of the problem. In 2014, the National Crime Agency received around 14,000 reports of transactions that were believed to involve illicit activity. By 2020, that had risen to over 62,000 reports. Of course, the true scale of the problem is extremely hard to quantify, given the lengths that individuals and organisations go to hide their illegal activities.
In 2019, Transparency International UK said:
“The London property market is highly vulnerable to corrupt wealth flowing into it.”
Its analysis found that since 2008, £100 billion of properties have been bought in London alone by overseas companies in secrecy jurisdictions and high-risk corruption countries—both indicators for illicit wealth. In 2017, it identified that 160 properties worth over £4 billion were purchased by high-corruption risk individuals. The tidal wave of dirty money is poisoning the housing market for ordinary people. There is growing evidence that the purchase of UK property to launder illicit finance from abroad has a direct impact on housing prices. As Transparency International UK—among others—has shown, attempts to clamp down on corruption around the world have led to a rise in property prices here as illicit finance flows into the UK market to avoid detection in its home country.
This is not just about luxury properties. There is a ripple effect, where activity at the top causes a rise in prices throughout the market. As demand outstrips supply in high-value areas, buyers look out to more affordable places. This leads to a cycle of rising housing prices—my hon. Friends know this story very well. Illicit finance also distorts the supply of housing as developers increasingly focus on luxury property targeted at international investors, who have no intention of living in the properties. So dirty money, from crime and corruption abroad, is pricing people out of their local communities in cities across the country.
This has a direct effect on the housing crisis. The Government know this, of course. They have committed to act and set up a register of beneficial ownership for UK property owned by overseas entities. This would let the disinfectant of sunlight into the murky world of high-end property bought by shell companies and overseas bodies. As the Government stated:
“It is intended to act as a deterrent to those who would seek to hide and launder the proceeds of bribery, corruption and organised crime in land in the UK.”
The fact the Government are aware of the problem but are still failing to act is inexplicable.
Our new clause 24 requires the Government to review how the Registration of Overseas Entities Bill could work alongside the non-resident surcharge to mitigate the housing crisis. But what we really need is for the Government to introduce this Bill as soon as possible and begin the process of implementing this important legislation. I will end by paying tribute to the Members from across the House who have campaigned on this issue relentlessly. I know they will share our disappointment that the Government are still not taking the action that we all agree is needed. I urge the Government to correct this wrong and get on with doing what they have committed to do.
Mr David Davis (Haltemprice and Howden) (Con)
I rise to speak to amendments 32 to 34 and new clause 31 tabled in my name and those of other right hon. and hon. Members. The Government’s historic IR35 policy has dated from long before this Minister was in his office. Far from rationalising the collection of tax from contractors, it has created and has now unwittingly extended a wild west of umbrella companies that operate without regulation and where malpractice is rife. This malpractice has seen contractors forced to operate through non-compliant umbrella companies that maximise their profits by using sleight-of-hand tactics. This includes: misrepresenting tax thresholds; skimming off pension contributions and other payments such as the apprenticeship levy; forcing contractors to opt out of their rights as agency workers; and withholding billions in holiday pay that is legally due.
The Government policy to date has triggered the increased proliferation of mini umbrella companies. BBC Radio 4’s “File on 4” found that 48,000 of these companies had been created in the past five years. The fact that policies in this area are flawed is proven beyond doubt by the fact that HMRC is having to de-register 22,000 of these umbrella companies. The frauds involved here cost the taxpayer hundreds of millions of pounds every year in lost tax, but as well as that, the boom of these non-compliant companies means that legitimate umbrella firms are being run out of business by them. The illegitimate umbrella companies making most of their profits through appropriating funds through tax scams, withholding holiday pay, skimming from the apprenticeship levy and the like are driving those honest firms out of business. There exist comparison websites for contractors to see which umbrella company they can do best with, and of course the ones that look best to them are the ones that make them money through illegitimate mechanisms.
Catherine West (Hornsey and Wood Green) (Lab)
Does the right hon. Gentleman agree that some well overdue changes to Companies House’s approach would be very welcome, and that the Government are taking an awful long time to get round to it?
Mr Davis
I have a lot of sympathy with what the hon. Lady says. There are many ways to attack the issue; I will mention one or two, including my proposals to build in some changes to that effect. There are many ways to make sure that these scams cannot happen, but we need to undertake some of them. To pick an example that I was not going to cite, we understand that something like 40,000 Filipino employees have been taken on as cheap frontmen for these companies as directors. Those sorts of things do not serve our economy or the contractors well.
John Spellar (Warley) (Lab)
Is there not also a responsibility on the Government as a client to insert in the contracts with their main contractors a clause stating that if such practices are found within their supply chain, they will not be considered for future contracts? The Government could do that quite rapidly, quite apart from HMRC catching up with what is going on.
Mr Davis
The right hon. Gentleman is right. The first phase of IR35 was about contractors for Government, so the whole wild west that I have described was actually created for public services.
To come back to my point about illegitimate contractors forcing the legitimate ones out of business, it is quite understandable that ordinary contractors will be attracted to a scheme that seems to offer them the best terms, yet they will be unaware that in doing so they risk unwittingly entering unintentional tax avoidance schemes. That is one of the problems that troubles me most.
These contractors, remember, are not fat cats, big bankers or city slickers. They are hard-working, decent people such as locum nurses and supply teachers—contractors whose work is vital. To take up the right hon. Gentleman’s point, the FT reported that NHS locum workers returning during the height of the pandemic were targeted by firms mis-selling these schemes. Ordinary and comparatively low-paid workers do not have the advantage of expensive tax advisers. They cannot be expected to navigate the minefield of extremely complex tax law if we allow these predators to play unfettered within it.
Sammy Wilson (East Antrim) (DUP)
Does not the situation get even worse once these tax avoidance schemes have been identified and shown to be illegal? It is very often the people who were conned into operating with umbrella companies who are penalised, while the umbrella companies walk away with no investigation and there is no means of holding them to account.
Mr Davis
That is entirely right. Indeed, one of the flaws that HMRC exhibits is that although it very often has real-time information on the issues, it acts only much later. That doubles or quadruples the problem for the ordinary person who is effectively a victim of these schemes, who suddenly finds years later that they have vast sums to meet—and, indeed, the shame of being held up as a tax avoider, if not evader.
The Government should take action to clean up this wild west, for example by providing guidance and templates for the preferred model of working. This is not so difficult. Why cannot we lay out a template for ordinary contractors and legitimate umbrella companies that says, “This is how you should do it, and this is what we expect”? Failing that, my amendments give the Government and Parliament three clear and simple options.
Ideally, the Government will take note and enact new clause 31. It would review—it does not require law to do this—the whole operation of umbrella companies and off-payroll working. For me, that is the de minimis position. My preferred option is that the Government should introduce regulation into this problematic sector to clear up some of the most egregious aspects, including mis-selling and malpractice. They should require—this deals with the Companies Act point to some extent, but it is the simplest way of doing it—umbrella companies to meet five strict requirements: they should pay all holiday pay due; maintain all employment rights; ban kickbacks to third parties; end the skimming off of excess profits through sleight-of-hand tactics; and, finally, ensure that the worker himself has no material interest in the umbrella company. That would not deal with the propriety issues of the Companies Act, but it would deal with the main, most socially damaging aspects of the wild west we have now.
Alison Thewliss [V]
I rise to speak to new clauses 9, 10, 11, 13, 14, 15 and 16, which are in my name and those of my colleagues. It is certainly a very large grouping of amendments, and I will not speak to all of them, you will be glad to hear, Mr Deputy Speaker, but I will highlight a couple of them.
First, I want to speak about the very large amendments and new schedules concerning Northern Ireland and VAT. It concerns me greatly that we are looking at this huge new swathe within the Finance Bill that has not been considered at any other point in the Bill’s passage and that we have been given very limited time to delve into it at very short notice. That speaks to some of the complexity that Brexit has imposed on Northern Ireland. There needed to be a great deal more scrutiny of the measures prior to now, and the Government should not be bringing forward huge swathes of new schedules at this very late stage of the Bill.
I am very keen on new clauses 4, 5, 8 and 21, because Finance Bill scrutiny is limited after we have passed the Bill. We do not really think very much about the environmental impact, the equalities impact, the public health impact or the impact on poverty, and we do not think very much about the significant impact on the environment of the measures in the Bill. We do not do enough within Finance Bills to understand the full impact of the measures we have, and I would support a full range of other mechanisms to do so, which I will come back to on Third Reading.
I want to touch on the worthy amendments that those on the Labour Front Bench have tabled. The hon. Member for Erith and Thamesmead (Abena Oppong-Asare) talked knowledgably about the issues around financial crime. Some of the evidence we heard in the Treasury Committee during our inquiry highlighted the fact that that is a hugely under-investigated and under-prosecuted crime. There is still very little progress by the Government in closing loopholes in Scottish limited partnerships or in other areas. As she pointed out, we had pre-legislative scrutiny of the draft Registration of Overseas Entities Bill in the Joint Committee with the Lords. Now the Bill has disappeared, but the problem has not. There are still huge numbers of people using the UK, within the property sector in particular, to launder dirty money. The Government are not acting on it. The longer it goes on without action, the more we have to ask who is benefiting if the Government are choosing not to act.
On our new clause 9, I was in a meeting earlier with representatives of Lloyds Banking Group where Philip Grant, one of its representatives, made an excellent point about the asymmetric economy that we are currently in. There are some who can restart their businesses and some who cannot yet get restarted. Some of those will not be restarted for quite some time yet to the point where they do not know if they will be able to break even. The economy has not restarted and opened up for everybody. Many sectors of the economy will not be back to normal for quite some time.
Our new clause 9 calls for a report on the extension of the self-employment income support scheme and the coronavirus job retention scheme until September and until the end of the year respectively. For those who are watching and are unfamiliar with Finance Bills, if they are wondering why we keep talking about reports and reviews, the rules of Finance Bills are such that we cannot just ask for the extension in a simple way. We are not allowed to do that—it is part of the restrictions that these Bills have—so we ask for reports. However, we do very much see merit in asking for action rather than just reports.
Some sectors have been able to modify and their staff are working as they were before the coronavirus pandemic, while some are working partly or entirely from home. Yet, as we all know, there are other sectors that are still waiting—culture, hospitality, conferences, events, weddings, tourism and travel. Employers who may already be carrying a significant burden of debt and arrears without having their cashflow back to normal still have to pay more of their employees’ wages, eventually tapering off to nothing at all coming from a Government contribution. Many businesses may decide that it is just too much of a cost and that they cannot continue to employ those people or cannot continue with their business. We know that the scheduled end of the schemes last year caused job losses. The Treasury must not make the same mistakes again, and at least carrying out such a report would help us to understand the consequences of the UK Government’s actions in this area.
We are not out of the woods yet with this pandemic, and it is vital that the UK Government take all the steps they can to strengthen support rather than pulling it. We in the SNP cannot forget, although the UK Government clearly have, about the millions of people excluded from support schemes altogether. It is unjustifiable that the year has come and gone with so many people left without a single penny piece in Government support, many in sectors that have not yet come back and may not for some time.
Further to this, we call again in our new clause 10 for a review of the extension of the 5% reduced rate for hospitality and tourism. This was a call that we made before the Chancellor announced it last year. The VAT rate for tourism has been too high for too long, and this year, when we are being strongly encouraged to holiday at home, it makes absolute sense to extend this provision, which many people have not had sufficient opportunity to benefit from. The provision would also cover events, including funfairs, which have had a very tough year, with many traditional fairs up and down the country being cancelled. Maintaining the VAT reduction could help to provide a much-needed stimulus to an events, tourism and hospitality sector that is crying out for such a boost. I am sure that if we had this power in the Scottish Parliament we would be using it, so I encourage the Minister to act or to devolve the power and let us get on with the job.
On our new clause 13 on stimulus, we agree with the principle of boosting it like Biden. One of the mistakes of the crash is that it was used to set us on a course of austerity. This has had a huge and devastating impact on all our constituents. We need to know from the UK Government what will be the impact of future austerity plans they might have compared with investment. While this Government have the levers in their hands, they should be clear about the impact that their action or inaction will have.
Our new clause 14 returns to some of the issues that we have with the technicalities of the plastic packaging tax. We are trying to be helpful to the UK Government in this regard. I genuinely hope, against previous experience, that they will at least listen to these concerns and make provisions that will maximise both the recyclate and the tax take. Not all plastics are equal, and the Government should recognise that in the provisions they put forward. Some lend themselves more to being recycled and can be brought to 100% reusable content, and some are very far away from that. We should not treat them all the same.
On our new clause 16, we have been concerned for some time about problem gambling, and my hon. Friend the Member for Inverclyde (Ronnie Cowan) has campaigned doggedly on the issue, along with the all-party parliamentary group for gambling related harm. It would therefore be useful to understand the impact of clause 104 on the volume of gambling and whether further fiscal measures are required to tackle the harm that is done to people.
I would like to touch on some of the amendments tabled by the right hon. Member for Haltemprice and Howden (Mr Davis) on the loan charge and related issues. The loan charge continues to be a running sore for many, and I ask the UK Government to consider the merits of the amendments and what more can be done to support people. Stopping the malpractice of umbrella companies would be another step forward in closing loopholes and protecting those who may be tempted to sign up to, or coerced into signing up to, such schemes in the future. Those promoting such schemes always seem to be a step ahead, and the Government should not let them get further steps ahead and become a dot on the horizon.
There are many amendments in the group that I would like to speak to, and many have significant merit and should be considered by the Government. The flaws in this process mean that many of them will not even be considered or voted on tonight, but I urge the Government to take up those that they can.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I rise to support the amendments standing in the names of my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), myself and my colleagues.
Let me start by making it very clear, as my right hon. Friend—wherever he is—did so well earlier, that we have a problem here, and I am surprised that the Government do not really want to recognise it and are avoiding it. The unacceptable practices of umbrella companies have now become very clear. Contractors are being forced into schemes and are being forced by recruitment agencies to use umbrella companies, which they may not wish to do and may be concerned about. Opting out of the conduct of employment regulations is often mandatory, which removes the rights contractors had as agency workers. We are seeing kickbacks, problems over holiday pay and the skimming of the assignment rate. We are also seeing mini umbrella companies, which some contractors sign up to, believing them to be compliant, only to then discover that they are employed by a company with a different name and owned by a director in, say, the Philippines—my right hon. Friend mentioned “File on 4”, which has raised this issue.
The problem is that the worse the level of malpractice, the greater the rewards and kickbacks for the agencies, reducing the revenue for the Treasury. I have huge respect for my right hon. Friend the Financial Secretary, who is on the Treasury Bench and who will respond to all of this, and I am sure he and his colleagues in the Treasury are alert to this issue and understand that it is a major problem, but I cannot quite understand why we are not using this Finance Bill to start putting some of this right.
John Spellar
Has it not been a systemic problem with the Inland Revenue that these schemes have been cropping up for decades, and that it takes years to deal with them? They are spreading like wildfire, and they are spreading even faster now with social media—it used to be through the pubs and clubs. Ministers need to be on the Inland Revenue’s back saying, “Why are you not dealing with these problems?” There is a timing issue in this.
Sir Iain Duncan Smith
I agree with the right hon. Gentleman. The point I am trying to make to my right hon. Friend the Financial Secretary and others on the Treasury Bench is a fairly gentle one: this is something that we can rectify, and we have the capacity to rectify it. We should think of what will happen if it goes much further. We should think of the loan charge and the huge human problems that were caused by that and the attempt by the Treasury to use retrospective legislation to grab money back. Who got hammered in all that? Not the organisations that were doing these things, but the individuals who were led to believe they were in the right set-up. It is always going to be them who get hammered. I thought the purpose of Government was to protect the vulnerable and deal with those who are abusing them.
Dr Julian Lewis (New Forest East) (Con)
It really is enormously frustrating for those of us who, time and again, have made representations to Treasury Ministers on behalf of victims of the loan charge, only to be knocked back by ripostes relating to tax avoidance schemes, that now, when people who have suffered from the loan charge are urging colleagues on this side of the House and no doubt on the other side as well to take steps to ensure that people are not trapped in these schemes in the future, the Government do not want to give them that added layer of protection, so they seem to be wanting to hit them in both directions.
Sir Iain Duncan Smith
I am grateful to my right hon. Friend. I will not risk repeating what he has said, but it is the reality. I was one of those who gave evidence to the review of the loan charge set-up because it was quite clear that it was causing huge problems for many decent people in my constituency. I am sure it was the same for Members on all sides of the House; I do not for one moment pretend that it was a problem for my constituents alone.
I recommend to my right hon. Friend the Financial Secretary some of the amendments and new clauses that we have been speaking about. I will not go through all of them, but I do want to make this point. Amendment 33, which allows an umbrella not to be an intermediary and still operate, provides strict conditions. My right hon. Friend the Member for Haltemprice and Howden laid out those five conditions, which are critical. I recommend those to the Financial Secretary; I am not going to repeat them, because we would just go on doing that all night.
I want to deal with amendment 34 in a bit more detail. The important thing about amendment 34 is that, in reality, all inside-IR35 workers could easily be paid via a recruitment agency payroll—that is the key bit here—and umbrella companies are of benefit to recruiters, not to workers. Under the original drafting of the off-payroll rules, an umbrella company could classify as a payment intermediary, so payment would have to be made to the umbrella net of tax, reducing an incentive to exist. The behavioural effect will mean agencies will put workers on payroll if they are not outside IR35. The key thing is that this would give the sector a year to re-gear and provide its service as agencies in a payroll payment bureau-type manner, instead of the Government taking other decisive action, including banning certain practices and statutory regulation.
I am trying to be reasonable about this to the Government. I do think that this is really important. I am going to conclude on this. Overall, if we look at the purpose of the amendments and new clauses in this area, I think they set out what the problem is. The people who will get hurt by all of this in the end, when the Treasury finally decides to do something about it, will be the people who were the victims of this, not those who set these schemes up.
There are five points here that are critical: the whole purpose is to stop overnight aggressive tax avoidance schemes introduced and encouraged by some unscrupulous agencies; stop overnight the exploitation of contractors, forced into schemes that adopt malpractice to skim moneys from contractors; stop overnight the kickbacks being used that encourage malpractice; provide sunset clauses to ensure that the sector has until 6 April 2022 to prepare for the changes; and make agencies and clients liable for any malpractice, thereby removing the incentives to encourage it.
These are very simple, basic points. We are not asking for a revolution; we are asking for sense. I know exactly where this is going because in 29 years I have seen this time and again—do not move; later on, blame somebody else; and back comes the Treasury to say, “We’ll now get that money back”. I think the loan charge—I come back to this—is the biggest example of where, when things goes wrong, it is those who have suffered who end up paying the penalty, not those who skimmed off the top and are now living somewhere outside the reach of Her Majesty’s Treasury. I simply say to the Financial Secretary, with all due deference: please, please give consideration to this and at least have a proper review so that we may engage with this in due course and settle it.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
First, I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
I rise to support my colleagues on the Front Bench and new clause 24 about the surcharge on overseas buyers: the extra stamp duty that is charged. Although we are seeing a 2% uplift, it is not what was originally promised, and even that, I would say, is still not enough to prevent people from speculating, particularly in my constituency and elsewhere in London, on the expensive London housing market and overheating that housing market.
I came across this level of investment in my early days in this place—I have now been here for 16 years—when I discovered that whole blocks of new developments were being bought up overnight. I could not work out who was doing it. I then managed to inveigle my way on to the distribution lists of some of the estate agents, which were advertising the properties in Hong Kong and Dubai, and they sold over a weekend.
These were not homes for local people. They were often bought up by finance companies overseas and sold on. The original reason for the extra stamp duty surcharge was to try to curtail that to some extent, but I do not think it is enough. Foreign investors are buying homes, which are becoming commodities; they are advertised with yield—it is simply about increasing the rent. As the shadow Minister, my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare), highlighted, at least £53 million and counting in revenue has been lost from the Exchequer at a time when we need it more than ever. The excuse is often that developers need the money because they cannot operate without that cash-flow model. I think they would adapt pretty quickly. In my constituency, there are blocks that local people have kept their eye on, wanting to try to buy, only to find they have already been sold en masse overseas. A stamp duty increase would help a little bit.
The stamp duty holiday has been helpful to many people, but all that contributes to fuelling demand for housing while the Government are not increasing supply. Those rising house prices put homeownership out of reach of so many of my constituents and people up and down the country. It is having a major dampening impact on people’s lives and livelihoods and on the economy in the long term. It does nothing for private renters and nothing for those in desperate need of affordable housing.
We are now able to go out and do our normal roving surgeries on doorsteps, and I will give some examples of people I have met in the last week alone. Faisal works in the NHS. He has three children in a two-bedroom council flat, and he has been bidding to move to a bigger property for 10 years, but such is the demand in my constituency that someone in housing need does not get to move. If they are homeless, they now get stuck in a hostel room for years, whereas only five or so years ago it was for about six months. Jane—not her real name—and her husband live with two large teenage boys in a two-bedroom flat. I have known her for some years, having seen her at surgeries. I happened to be on her doorstep the other day, and she made sure that I saw how big her boys have become. She has been coming to see me since they were toddlers, yet she still cannot get rehoused. This is no criticism of Hackney Council, which is doing a fantastic job of trying to build, and is building, affordable social housing, but it cannot keep pace with the demand. In the last week alone, two women I knocked on the doors of were sharing beds with their 12 and 13-year-old sons respectively.
One of the saddest cases is an NHS porter I met less than 10 days ago who shares a room in a private rented home with his 16-year-old daughter. He works. He could not qualify for affordable housing even if he wanted to, because he has no recourse to public funds, despite propping up our NHS in one of the most challenging years in its history. He is doing all the right things—working, trying to be a good father—but he cannot afford private rents. That is not surprising: it is at least £1,500 a month to rent a two-bedroom flat in my constituency; £750,000 to buy a two-bedroom flat; and rent for a three-bedroom house is not much shy of £3,500 a month.
We need to increase stamp duty immediately, while monitoring its effect, and we should increase it further for overseas purchasers. We should not have a housing market that has led to homes being owned by finance vehicles or absentee landlords who have no interest in it being a home but simply see it as an investment. Homes should be homes. Investment is all very well, but this is really damaging the future prospects of children in my constituency, some of whom will never have not only their own bedroom but maybe even their own bed between now and when they hopefully earn enough money to leave home, although frankly we are a long way off their earning enough money to buy a £750,000 flat. The Government really need to step up. They talk about levelling up, but that is certainly not happening for many people in my constituency.
Caroline Lucas (Brighton, Pavilion) (Green) [V]
I am grateful, Mr Deputy Speaker, for the opportunity to speak in this debate. There are many amendments in this group to commend, and they have been powerfully set out by colleagues who have spoken before me, most recently the hon. Member for Hackney South and Shoreditch (Meg Hillier), but I want focus on new clause 21, which would require the Chancellor of the Exchequer to review the impact of the Finance Bill on human and ecological health and wellbeing, including the wellbeing of future generations. I am very grateful to colleagues for their support.
New clause 21 reflects the urgency of shifting to an economic system fit for the 21st century—a modern economic system, designed to serve people and planet for the long term, rather than one that prioritises economic growth at all costs and short-term profit. We have seen where that has got us. In the words of a report by leading economists for the OECD,
“the dominant patterns of economic growth…have generated ‘significant harms’ over recent decades—including rising inequality and catastrophic environmental degradation.”
This new clause is about how we tell whether the provisions in the Finance Bill are genuinely building back better. It is about what the most important measures of economic success are for making such judgments. It makes the case that the health and wellbeing of people and nature should be our top priority. At the very least, the Treasury should be assessing all its policies against those benchmarks.
New clause 21 also highlights the need for the Treasury to fully consider the impacts of fiscal measures on future generations. It thereby complements the aims of the Wellbeing of Future Generations Bill, which the noble Lord Bird introduced last week as a private Member’s Bill in the other place. At the moment, the Treasury continues to put short-term economic and political gain ahead of the long-term health of our biosphere. That is an utter betrayal of future generations and is unforgivably wasteful from a public spending point of view.
If we are serious about levelling up, building back better or indeed about climate leadership, we have to switch to long-term preventive spending, and we need to do it fast. I want briefly to offer some further evidence of why we should be assessing each and every provision of the Finance Bill for their impact on human and ecological health and wellbeing. The case for new clause 21 is made splendidly by the Treasury’s own Dasgupta review of the economics of biodiversity, which calls for
“an urgent and transformative change in how we think, act and measure economic success to protect and enhance our prosperity and the natural world.”
Then there is Public Health England’s recent programme of work, called “Inclusive and sustainable economies: leaving no one behind”, which states:
“Never has the interdependence between health and the economy been closer, or the need for a fairer and more inclusive economic system been clearer.”
It explains how poor areas and populations are at risk of becoming still poorer, and how that will hold them back. Therefore, as we aim to build back better, we also need to build back fairer and more sustainably. Crucially,
“This means addressing the most fundamental of determinants—the economy which creates jobs and wealth—and protecting the environmental sustainability of future generations by doing this within the means of our planet.”
A new report, “Rebuilding prosperity” from the University College London Institute for Global Prosperity sets out proposals for a new way of thinking about what the economy does for people, and a new way of collaborative decision making to secure livelihoods and shared prosperity for people everywhere. Zara Mohammed, head of the Muslim Council of Britain, has recently written about the lessons from the pandemic and the importance of not going back to so-called normal. She says:
“We must build a society based on the principles of social justice; reduce inequalities of income and wealth; and build a wellbeing economy that puts achievement of health and wellbeing at the centre of its strategy.”
The OECD report that I mentioned echoes that approach and makes an unequivocal call for Governments to change the way the economy works in the wake of the covid-19 pandemic. It says that we need a paradigm shift in the way developed countries approach economic policy, so that instead of focusing on gross domestic product, we prioritise environmental sustainability, improving wellbeing, reducing inequality and strengthening economic resilience.
Finally, the UN climate science report from earlier this year, “Ten new insights in climate science 2020”, very clearly sets out the stakes:
“A COVID-19 recovery strategy based on growth first and sustainability second is likely to fail the Paris Agreement.”
We cannot judge whether this Finance Bill puts us on course for a fair and green recovery if our main measures of success are things such as GDP growth and labour productivity. There are plenty of alternatives that recognise the priority that should be given to human and ecological health and wellbeing as the goal of economic policy. The Dasgupta report, for example, proposes inclusive wealth instead of GDP. The New Zealand Treasury, famous for the world’s first wellbeing budget, uses a living standards framework, operationalised for budgetary and spending decisions across Government. Other countries in the Wellbeing Economy Governments alliance are embracing similar alternatives, and the Carnegie UK Trust proposes what its call GWE: gross domestic wellbeing.
Robust alternatives do exist. None of them is perfect, but none is anywhere near as flawed as using GDP growth as our main measure of economic success. The time for the Treasury to change is now. The UK, through the G7 and COP26, should be leading the world towards a wellbeing economy. One modest step should be adopting new clause 21, which recognises, as the Treasury’s Dasgupta review states:
“The solution starts with understanding and accepting a simple truth: our economies are embedded within Nature, not external to it.”
To conclude, we must, in Professor Dasgupta’s words:
“Change our measures of economic success to guide us on a more sustainable path”.
Andrew Jones
It is always a pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas), who brings a different perspective—or, as she might word it, a paradigm shift—to some of our debates, which is a positive thing. However, it is quite clear from all that the Government have said that improving our environment for future generations is at the heart of Government policy.
However, I am not going to comment on that. I am going to comment on the Finance Bill measures on which I have, I think, received more correspondence than on any other—namely, the stamp duty measures. In advance of the Budget, the correspondence was to ask for an extension to the stamp duty cut, and after the Budget it was to welcome it. If we pass the stamp duty measures—which obviously we are going to—we will have had a stamp duty cut in place for over a year, and we have definitely seen a boost in housing transactions. In March, there were over 173,000 transactions. I have taken that number from the non-adjusted monthly data published by HMRC, and it is the highest monthly total in its report, which details monthly levels right back to 2005. The £500,000 nil rate band until the end of June has therefore proved effective. My concern is that it has perhaps proved so effective that the market is in danger of overheating. We are seeing quite a bit of inflation, which obviously would need monitoring.
The introduction of a 2% non-resident surcharge will potentially have a positive impact on house price inflation. It would obviously not apply to those who come here to live and work, but would have a slight revenue-raising implication. The Opposition’s new clause 2 calls for the policy to be evaluated at different levels of surcharge. As I said earlier, all Treasury policies are evaluated regularly—I know that from my time there—and we also have the general commitment to transparency. I therefore do not believe that the new clause is necessary.
To focus on housing, it is simply too hard for people in many parts of our country to get on to the property ladder. I welcome the 95% mortgage guarantee scheme, which came into effect last month. However, we need to remember that it is not just one side of the argument that will move things forward, and we are obviously also seeing significant house building. It is the combination of boosting supply and facilitating demand that makes it easier for people to start on home ownership. Judging by my inbox, that remains what people want, although I recognise the point made by the hon. Member for Hackney South and Shoreditch (Meg Hillier) about the need for a greater supply of social housing as well. She made her points very powerfully.
I would like to make a couple of comments about the speeches from my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for Chingford and Woodford Green (Sir Iain Duncan Smith) on umbrella companies and IR35. It has been right to address off-payroll employment, which is not good for either the employee, when that is what they truly are, or the employer. It is also worth remembering that we should separate disguised employment from when contractors are truly adding value. They provide flexibility in our workforce for many companies and they bring expertise when it is needed and experience from solving problems in other businesses. That flexibility has been an ingredient in our economic growth.
Nevertheless, the points that my right hon. Friends made about umbrella companies were important. There are problems to solve, particularly in respect of the difference between the originators of the schemes and those who sign up to them in good faith. Although I have no doubt that we have problems to solve, I am not sure that the issue of umbrella companies should be dealt with in a Finance Bill—it is perhaps more of an unemployment issue than a finance one—but I look forward to hearing more on that from the Government in due course and, as my right hon. Friends said, that “in due course” should be sooner rather than later.
There are, of course, lots of other matters in the Bill, as we should expect, but I wish to comment on the issue of housing. I support the measures to promote home ownership, which has been falling for the past few years yet is an aspiration for so many. I am pleased to see that efforts are being made to turn that trend around.
Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]
I wish to speak to new clause 8, which was tabled in my name and the names of my colleagues. The new clause seeks to compel the Chancellor to assess the impact of this legislation on poverty, inequalities and, subsequently, our health.
Under the new clause, the Chancellor would be required to
“review the public health and poverty effects of the provisions of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.”
The review would have to consider:
“(a) the effects of the provisions of this Act on the levels of relative and absolute poverty in the UK;
(b) the effects of the provisions of this Act on socioeconomic inequalities and on population groups with protected characteristics as defined by the 2010 Equality Act;
(c) the effects of the provisions of this Act on life expectancy and healthy life expectancy in the UK;
(d) the implications for the public finances of the public health effects of the provisions of this Act.”
You will recall, Mr Deputy Speaker, that in February last year Professor Sir Michael Marmot published his review of health equity in England 10 years on from his initial study. His review revealed that instead of narrowing, health inequalities—including how long we are going to live and how long we are going to live in good health—have got worse. Most significantly, his analysis showed that unlike the majority of other high-income countries, our life expectancy was flatlining. For the poorest 10% of the country it was actually declining, and women were particularly badly affected. He showed that place matters: health-wise, living in a deprived area in the north-east was worse than living in an equivalently deprived area in London.
Sir Michael also emphasised that it is predominantly the socioeconomic conditions to which people are exposed that determine their health status and how long they will live. By analysing the abundant evidence available, he attributed the shorter lives of people who live in poorer areas such as my Oldham constituency here in the north-west to the disproportionate Government cuts to their local public services, support and income since 2010.
Shortly after Sir Michael published the report, covid hit. As the recent National Audit Office report outlined, it was always a question of when, not if, there was going to be a pandemic. Like many of us, Sir Michael has tried to point out the Government’s hubris not only in their pandemic management but in understanding why we have such a high and unequal covid death toll—the highest death toll in Europe and the fifth highest in the world.
In his covid review last December, Sir Michael summarised the four key pre-pandemic factors that have driven the high and unequal covid death toll. First, there were pre-existing and widening inequalities in social and economic conditions, particularly in power, money and resources. These inequalities in life have led to inequalities in health. Secondly, our governance and political culture was divisive, not just before but during the pandemic. Thirdly, there has been Government austerity over the past 10 plus years, including cuts in social security and local authority budgets. Finally, we had pre-existing and declining poor health.
Sir Michael has made a number of recommendations to build back fairer, including the need to recognise that our economy and health are linked. The improvement of our health and wellbeing must be a priority for the Government and an outcome of our economic policy, as others have said. New clause 8 is a practical means to ensure that that happens.
Ben Lake (Ceredigion) (PC)
It is a pleasure to follow the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), with whom I agree on the importance of the Government ascertaining how measures in this Bill may have a differential impact on different areas of the country, depending on different socioeconomic and health conditions.
I rise to speak to probing amendments 27 and 28, which stand in my name. They would encourage the Government to bring much-needed transparency and strategic thinking to the reliefs proposed by clauses 15 and 19. The amendments reflect Plaid Cymru’s constructive approach to this Bill and our priorities of building Wales’s economy and delivering on our net zero commitments.
Mr Deputy Speaker, you will be pleased to hear that I have no intention of detaining the House for very long this evening and so simply wish to reiterate some of the points I made in Committee. Before doing so, I wish to commend the amendments tabled by the right hon. Member for Haltemprice and Howden (Mr Davis) and the speech by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) on IR35 and umbrella companies. I very much hope that the Government will take them into consideration with some urgency.
Amendments 27 and 28 would require the Government to analyse the impact of changes to the annual investment allowance and research and development tax credits on the UK economy, their geographical reach and their impact on efforts to mitigate climate change. The amendments reflect a concern not only that existing tax reliefs are being used wastefully, but that we need to better support the levelling-up agenda and the decarbonisation of our economy so that we can achieve our legally binding net zero targets. I say that in the full knowledge that many other hon. Members have made these points far more eloquently than I could this evening. I particularly wish to commend the amendments standing in the name of the hon. Member for Brighton, Pavilion (Caroline Lucas), which would go some way to ensuring that any measures in this Bill would have decarbonisation and our net zero commitments very much at the heart of their endeavours.
More generally, the UK Government have a lacklustre record on the use of reliefs. Both the National Audit Office and the Public Accounts Committee have raised serious concerns in that regard, with the latter concluding that the Government do not fully know their cost and have failed to conduct due diligence to establish value for money, with some 204 reliefs currently uncosted. When we consider that estimates for the 158 reliefs that have been costed suggest that they could cost the taxpayer as much as £159 billion a year, we as parliamentarians are not only justified but duty bound to establish precisely how those reliefs will contribute to levelling up and decarbonisation efforts. I commend the hon. Member for Hackney South and Shoreditch (Meg Hillier) and the work of her Committee, which greatly enhances the quality of our scrutiny in this place.
With those words, I hope that the Government will urgently take on board our amendments, and those tabled by the Members to whom I have referred, to improve the transparency and effectiveness of tax reliefs to furthering what I think are common goals of levelling up and tackling the net zero agenda.
Sarah Olney (Richmond Park) (LD) [V]
I wish to speak to new clause 29, which stands in my name. The pandemic has introduced new ways of working right across our economy and we may need some time before we understand the full impact of these changes and the extent to which they represent permanent changes to how we work. Many of us, MPs included, have been fortunate enough to be able to utilise technology to continue our usual work and receive our full salary for it. Estimates put about 25% of the workforce in this category. I am one of many who hope that some of the changes we have been forced to adopt will be embedded in our normal ways of working as we move out of lockdown. On a national basis, it is possible that the use of digital meeting software may reduce the need for travel, both commuting and longer distance. It will also help workplaces become more accessible for those who have experienced obstacles, such as those with disabilities or those with caring responsibilities. But embedding emergency responses into everyday practice represents threats as well as opportunities, especially to workers. This new clause would require the Government to review the effects of this Finance Bill on certain categories of workers and to report to Parliament.
The workers I am particularly concerned about are those employed on precarious contracts, particularly in the distribution sector. One of the impacts of the stay-at-home order has been an enormous increase in online shopping and home delivery, with a corresponding increase in delivery vans on our roads. The impact that that is having on local congestion is a debate for another day, but tonight I want to draw attention to the contracts under which many of the drivers are working.
Catherine West (Hornsey and Wood Green) (Lab)
I rise to speak briefly in support of Labour’s new clause 24. We are often told, are we not, that the boldest measures are the safest. Unfortunately, the Government seem to have done a bit of a U-turn, or failed to be bold, going from a promised 3% to 2% on their non-residence surcharge. That is a hugely missed opportunity. It could really have helped the London property market, holding to account the wealthy as opposed to so many of those who struggle to get on to the property ladder.
I also want to talk about the register of overseas entities. First, I echo the words of my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), who talked so movingly about those in housing need in her constituency. That is something that many of us in London see, day in, day out, in our surgeries. In my case, I think of particular companies that, after properties are built, purchase a number of different apartments, selling them, for example, to the far east. Even people who have saved and saved cannot afford to purchase an apartment in that block, as opposed to those who buy an apartment to hold as an investment, even keeping it empty at a time when we have such desperate housing need. The Treasury should consider clamping down on this practice.
On the wider point that this measure could address if it were not so shy, consideration should be made of the cost of assets and the fact that the huge inflation of assets does not help savers or the young. There are so many young people in desperately insecure employment who will never get on to the housing ladder unless we start to address this terrible situation. We also know that with low interest rates it is almost impossible to save the amount of deposit that is needed. The Help to Buy scheme, which in some parts of the country has worked quite well, has not worked particularly well in many of our neighbourhoods. It simply has not been able to touch the sides of what is needed.
The second point I want to make on the amendment on the register of overseas entities is, once again, how disappointing it has been that we have failed to hold to account those abroad who seek, for various reasons, to hide their financial interests in the UK. We look at this in the context of the Sunday Times rich list from last Sunday, where we see 24 new billionaires in the UK while 4.3 million children in the UK are living in poverty. That desperately needs to be addressed, yet it is five years since David Cameron first promised, when he appointed his anti-corruption tsar, to actually do something about corruption and overseas finance. Instead we have this go-slow, whether on having proper credentials for registering businesses at Companies House, on some of the measures in the Bill or on going from 3% to 2%. Who stands to benefit from that? It is not our constituents; it is people abroad who clearly have some kind ear of the Government. That desperately needs to be addressed.
Having read Catherine Belton’s book “Putin’s People”, I hope the Minister is able dispel my fear regarding its allegation that £1 million has gone to the Tory party from Mr Temerko, who is a very wealthy Ukrainian businessman. That money is tied to a corrupt regime where the courts will do the bidding of the Government in Russia. That money is tied up. We should not be beholden to these people; we should be standing up to them.
I also want, while I am talking about the register of overseas entities, to comment briefly on the terrible situation with Belarus in the last 24 hours. The Treasury needs to be much more campaigning. I know that working for the Treasury is all dry facts and figures, but look at how important its work has been in saving our economy and saving our workers. Well, let us now look at how revolutionary it could be in holding to account some of the corrupt regimes that have their money tied up in London’s economy. Will the Minister look at whether he can work with the Foreign, Commonwealth and Development Office to bring forward sanctions against state-owned enterprises—some of which continue to have UK subsidiaries, such as BNK UK, which is the UK arm of the Belarusian state oil company—and outline how the Government can plan to stop the Belarusian Government from using the London stock exchange to raise money and sustain Mr Lukashenko’s grip on power? Furthermore, how can the Treasury, working together with the Foreign Office, examine the evidence for further sanctions against individuals who support and help to sustain the regime, such as Mr Mikhail Gutseriyev, who was mentioned today in the urgent question? I hope that the Treasury will work together with the FCDO to right this wrong.
Finally, a statistic to finish these few words. Despite the sanctions imposed last year by the Foreign Secretary, with which I agree, there are fewer Belarusian entities sanctioned now than in 2012. Only seven entities are currently designated, compared with 32 under EU sanctions in 2012. In the space of 12 months, this dangerous regime has stolen an election, employed brutal repression against its own people and hijacked a civilian airliner. I feel as though our economy is facilitating that, and we simply cannot let that pass. I beg that with the mention of the overseas register, the Treasury will work hand in glove with the FCDO to bring these people to book, and to establish a genuine and committed economy that, at its heart, cares about human rights.
John McDonnell [V]
We are at a stage in the Bill’s progress that is almost like a wash-up. We are trying to make last-minute appeals to the Government for action on a number of key issues, and all the appeals to the Government so far by the right hon. Members for Haltemprice and Howden (Mr Davis) and for Chingford and Woodford Green (Sir Iain Duncan Smith), my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Richmond Park (Sarah Olney) and others are on worthy causes that should be addressed, as are the amendments from the Labour Front Benchers.
We must remember the context of the Government’s surcharge policy. It was to spike the approach that the Labour party was making about a levy on overseas ownership, on exactly the grounds laid out by my hon. Friend the Member for Hackney South and Shoreditch about the desperate need for housing and to prevent housing from being used continuously as an investment asset for profit, rather than to put roofs over the heads of our families. I wholeheartedly support and welcome all those appeals, but even if with my Catholic upbringing I believe in the powers of conversion, I somehow doubt we have been able to convert the Minister to a sufficient level for him to accept the amendments. I hope to be surprised, but I doubt it.
I tabled amendment 23 not in the hope of converting the Conservative Government, but to enable me to express justifiable anger about the Government’s approach. The Government are attempting to legislate for a real-terms pay cut that will affect millions of low-paid workers through the freeze in the tax threshold. Those include many of my constituents who have had to make ends meet on 80% of their wages for much of last year. Yesterday—this has already been referred to—it was galling to see the other side of the coin. The Sunday Times rich list showed that during the pandemic more billionaires have been created in the UK than at any time in the past 33 years. The levelling-up policy that appeared last year was the levelling up of millionaires into billionaires.
The Chancellor should have used the occasion of the Budget and this Bill to level up capital gains tax to income tax rates, for example. It cannot be right that we tax work more than we tax income from wealth. Ahead of the Budget it was rumoured that the Chancellor was considering equalising capital gains tax and income tax. That would have been a much fairer way of raising revenue than increasing taxes for people on low and average wages, which the Government’s proposals on tax thresholds will do.
Child poverty has been mentioned, and in my constituency 42% of children are growing up in poverty—a figure that has sadly increased each year since 2015. Child poverty is often a consequence of low pay. The majority of children living in poverty in my constituency live in working households. We should be doing everything we can not just to protect but to boost the incomes of the low paid, not drag them into taxation or increase the taxes on them. The Bill will cut the income of someone working full time on the minimum wage. We know that 2 million workers rely on universal credit to top up their low pay, yet in a few months, the Government are going to cut universal credit by £20 a week.
Poverty has been rising in this country, and whether it is the £20 cut to universal credit, the stealth tax in the Bill, or this year’s paltry increase in the minimum wage, the Government’s actions will increase poverty still further, and increase suffering as a result. My amendment would ensure that the tax thresholds for the personal allowance and the higher rate were kept in line with inflation, as per the Income Tax Act 2007. I tabled it because I wanted to draw attention not to Labour party policy but to Conservative party policy, because in the last general election the Conservative manifesto pledged:
“We promise not to raise the rates of income tax”.
The manifesto continued:
“This is a tax guarantee that will protect the incomes of hard-working families across the next Parliament.”
I just hope that Conservative Members will have the good grace at least to acknowledge that clause 5 of the Bill breaches that pledge, and that incomes are not protected. More of people’s incomes will be hit by income tax, and that is especially harsh on the millions of public sector workers who now face from this Government a pay freeze, a 5% rise in council tax and now this stealth tax rise on their income tax.
Jesse Norman
I am grateful to all of those who have spoken in this debate. As the right hon. Member for Hayes and Harlington (John McDonnell) has just said, this has been something of a wash-up debate. It is fair to say that it is a bit of an omnibus group of measures pulled together, with many different clauses and issues on which colleagues have wanted to speak. That has made it wide-ranging, but if I may, I am going to focus on some of the key themes from across the various discussions we have had.
Let me start with the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) and the question of the non-resident surcharge, which was also highlighted by the hon. Member for Hackney South and Shoreditch (Meg Hillier). They may or may not be aware that in 2019 the Government carried out a public consultation on whether there should be a 1% non-resident surcharge, and decided on the basis of that consultation that the surcharge should be levied at 2%. That is twice as high as was originally contemplated in the consultation. That also should be seen in the context of the additional tax that people pay on second and third properties, many of which will fall into the scope of this measure. That is an important factor to bear in mind.
The hon. Member for Brighton, Pavilion (Caroline Lucas) revisited some of her key themes as regards the climate and environmental policy. I think that there is a misunderstanding at some very deep level of what the Government are doing, which includes: the Environment Bill; the 10-point plan that the Prime Minister has laid out; the net zero work that the hon. Lady highlighted, which was commissioned within and by the Treasury from a very eminent independent economist; and our work through the new UK Infrastructure Bank, which focuses on green policies and levelling up and for which I was pleased to visit new potential office sites in Leeds only on Thursday. It all amounts to a tremendous emphasis, particularly in the net zero review, on the long-term future of creating a sustainable and productive green economy in this country. It is very important to focus on that.
The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) talked about health inequalities. I remind her that the Government have made an enormous investment in the NHS, over and above the extraordinary interventions supporting the fabric of our society over the past 12 months. We will also have in place a new office for health promotion, designed to support better health and wellbeing across the country.
The hon. Member for Ceredigion (Ben Lake) called for greater transparency in relation to reliefs. I have a great deal of personal sympathy with his position; he is absolutely right about the importance of focusing on reliefs. To take a particular example that I know is of great interest to him, he will be aware that we have under way a review of R&D tax reliefs, an important part of policy.
The hon. Member for Hornsey and Wood Green (Catherine West) highlighted the situation in Belarus, which is not directly a matter for the Treasury or the Bill, but is obviously a topic of great importance and interest for all Members of this House, as today’s urgent question highlighted.
All those points are important to put on the record. I also want to pick up on the important speeches made by my right hon. Friends the Members for Haltemprice and Howden (Mr Davis) and for Chingford and Woodford Green (Sir Iain Duncan Smith).
My right hon. Friend the Member for Haltemprice and Howden focused on the prevalence of umbrella companies. It is important to say that there are legitimate reasons why an agency or an individual might wish to use an umbrella company. To contemplate a series of measures that might include a ban on umbrella companies would be a tremendous burden on the legitimate umbrella companies; my right hon. Friend mentioned that that was not his preferred option. It is important to point out that such companies can perform useful payroll functions for agencies, provide choice for individuals and have multiple engagements. Notably, the Low Incomes Tax Reform Group pointed out recently:
“For freelance contractors who cannot work for their clients on a sole trader or limited company basis…the option to be able to work through an umbrella can be very valuable.”
There is value to umbrella companies, but that is not to say that there is not also abuse. The Government are very focused on that: my right hon. Friend mentioned some of the measures that HMRC is taking to combat umbrella companies that are disobeying the rules or trading fraudulently, and we are committed to extending the remit of the Employment Agency Standards Inspectorate to support best practice in the area.
John Spellar
I think the Financial Secretary ought to face up to the reality, which is that many of the people under these companies are not what we would describe in any normal parlance as contractors: they are people working on Test and Trace in their thousands, for example, who should be employed directly either by Serco or by the agency that they work for. There are also great numbers of people in the health service under these companies; they should be employed either by an agency or by the health service. That is where the scandal is, and that is what he really ought to be dealing with—and very promptly.
Jesse Norman
It is a very dynamic marketplace, as the right hon. Gentleman will be aware. There are many different aspects to it with which the Government are seeking to engage. One thing that is quite important that I do not think he or others have noticed is that the changes to IR35 that the Government have made have in some quarters been widely welcomed. Let me give an example—it may not be the widest possible welcome, but it is quite noticeable—from the off-payroll advisory firm Qdos, which said:
“In recent months the tide has turned, with thousands of businesses now aware of the fact that IR35 reform is manageable”,
as it was manageable in the public sector some years before. It is important to recognise that that is also the case.
Meg Hillier
I have to challenge the Minister on IR35. He is speaking as though it is somehow all fine. It has decimated sections of the tech and IT industry in my constituency, where groups of people came together to deliver short contracts and were actually paying as much tax as the Exchequer was getting from them. I can provide figures if he would like to take this up further, but let us not pretend that it is all fine.
Jesse Norman
There is no suggestion on my part that it is all fine. One cannot make meaningful change to a market that is not performing as one would like and expect everything to be perfectly fine within weeks of the implementation of the measure. The point that I am making is that there are important players in the industry that recognise that—in the quote that I have given—“thousands of businesses” are
“now aware… that IR35 reform is manageable”,
and so it is.
As the hon. Lady will well know, under the previous arrangements there were people who were performing like employees—often working side by side with them—but not paying that tax, and it was important that they did so. If she doubts that, she might want to reflect on the question of what the tax revenue raised from those organisations is used for. The answer is that it is used to support the NHS, our public services and all the other things that the Government are trying to do to get this country through a difficult moment in our history.
Sir Iain Duncan Smith
The Minister accepts that there are now some significant abuses in the way that many—not all—umbrella companies operate. Do we need action by the Treasury to deal with this issue, or is he content that it will just resolve itself as things stand?
Jesse Norman
No, the Government have been clear that there needs to be an extension of the employment agency standards inspectorate in this area, and there may well be operational measures that HMRC needs to continue to undertake. My right hon. Friend will be aware that the Bill contains very considerable additional measures designed elsewhere in the tax system to curb the promotion of tax avoidance schemes, to improve the disclosure of those schemes and to combat organisations that would attempt to derive an unfair advantage of the kind that he has described, so we are absolutely not unaware of the importance of ensuring that people across the board pay appropriate levels of tax.
It is also worth saying that none of this really falls within the context of a Finance Bill, let alone the one that we have laid out in front of us. It is also worth saying that HMRC has used real time information in ways that were contemplated and discussed earlier in the debate in order to try to be more forward-leaning in this area. We recognise the concern and HMRC is highly active in it, but in many cases these umbrella companies do have a legitimate function, and it is important to recognise that.
I think that is it—thank you very much.
Abena Oppong-Asare
Once again, I thank all Members who have spoken. This has been a varied and wide-ranging debate, with Members focusing on different aspects of the Bill.
My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) spoke about the impact of overseas buyers buying properties in her community in bulk. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) spoke about the impact that dirty money is having on her local area and how other countries, such as the USA, are using sanctions to target corrupt individuals. Both are excellent champions for their constituents, who are too often at the sharp end of the housing crisis.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
Will the hon. Lady give way?
Abena Oppong-Asare
I am afraid that we have to make haste.
My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) spoke passionately about the impact of the Bill on poverty and public health. She is absolutely right to draw attention to the Government’s failure in this area. My right hon. Friend the Member for Hayes and Harlington (John McDonnell) spoke about the measures in the Bill that are hurting the lowest earners in our society. He has always been a champion for the lowest paid.
Other hon. Members, including the right hon. Member for Haltemprice and Howden (Mr Davis), spoke about the exploitation of workers through umbrella companies. As my hon. Friend the Member for Ealing North (James Murray) said earlier, we are extremely concerned about the Government’s approach to workers’ rights, including their broken promise to include an employment Bill in the Queen’s Speech. We also share Members’ concerns about people being forced into umbrella companies and losing rights as a result. I urge the Government to look carefully at this issue.
I thank the Minister for his answer to my question on the non-resident stamp duty surcharge. I am aware of the consultation in 2019 to seek views on the decision on 1%, which led to the 2% stamp duty surcharge. I also point out that the Chancellor made an announcement in that same year, when he was Chief Secretary to the Treasury, in relation to implementing a non-resident stamp duty surcharge at 3%, so this commitment has been watered down.
I am sure that we will return to this issue during future debates and I thank Members for the points they have raised today. I will end by returning to the issue of the register of overseas ownership. As I said earlier, the Government’s failure to introduce this legislation is extremely disappointing. We will push new clause 24 on this issue to a vote, but I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 24
Review of impact of 2% non-resident surcharge
‘(1) The Chancellor of the Exchequer must review the impact of section 88 and schedule 16 of this Act on tax revenues, residential property prices, affordability of residential property, and the volume of property purchases by non-residents, and lay a report of that review before the House of Commons within six months of the passing of this Act and once a year thereafter.
(2) The review under this section must include an assessment of what those impacts would have been if the provisions in the Draft Registration of Overseas Entities Bill had been in force.’—(Abena Oppong-Asare.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
“VAT | Return under a special accounting scheme.”; |
Jesse Norman
I beg to move, That the Bill be now read the Third time.
I thank right hon. and hon. Members who have contributed to the robust but, I would say, good-natured debate throughout this Finance Bill’s passage over the past two months. It has been a speedy but thoroughly effective process. Before I get into the bulk of my speech, I know that the right hon. Member for East Antrim (Sammy Wilson) wants to put a question to me, so let me recognise him.
Sammy Wilson
I thank the Minister for giving way. I tried to catch his eye earlier on; I do not think that he is deliberately avoiding me, but I did not get the chance to talk to him. New schedule 1 refers to VAT on distance selling. It covers 55 pages and was introduced tonight without much chance of consideration. It will affect businesses with a threshold of sales of £8,818, which will require them to register and to do special accounting. What assessment has been made of the likely impact of that on small businesses in Northern Ireland that sell goods into the EU?
Jesse Norman
I rather regret it, having invited the intervention. No, of course, to engage with this, I would not have recognised the right hon. Gentleman if I had not wanted to take the intervention and I certainly was not avoiding him earlier in the debate. He is right to point out that these provisions have been put into the Bill for the first time. I am pleased to say that they have been given proper consideration in the detail that has been put up, which he alluded to. There is a new measure relating to the distance selling threshold, which will affect a small number of businesses in Northern Ireland. By and large, this put into law, in relation to Northern Ireland, a set of measures that has already been adopted elsewhere in the United Kingdom, in recognition of commitments that we made to the EU as part of the process of striking our new trade arrangements. That is that, but if he wishes to have further conversation on that, I would of course be delighted to do so.
This Finance Bill comes at a crucial juncture for our economy and our public finances as the UK recovers from what is—we must never forget this—the greatest economic and social crisis since world war two and the greatest economic recession in 300 years. It delivers on the measures announced in the Chancellor’s Budget to protect jobs and livelihoods and to provide additional support to help people and businesses through the pandemic; to begin the process of fixing the public finances; and to lay the foundations of a resilient future economy. This Bill delivers on all those commitments, and I commend it to the House.
James Murray
People and businesses across our country need the Government to support them as they begin to get back on their feet after all the damage to people’s lives and livelihoods that the covid outbreak has brought. Six weeks ago, when we began to consider this Bill, it was clear that its provisions and those in the Budget that preceded it failed to provide that support.
We opposed the Bill on Second Reading, because far from helping people to get back on their feet, it would force half of all people in the country, including those earning only just enough to pay tax at all, to pay more from next year by freezing income tax personal allowances. That hit to household finances came alongside an immediate sharp council tax rise, a cut in universal credit later this year and a shameful real-terms pay cut for NHS workers after their unparalleled service over the last year and more. The sense of unfairness was made even more acute as the Bill, at the same time as hitting household finances, gave an immediate tax cut to some of the biggest multinational tech firms, which have done so well over the last year.
Throughout the Committee stage of the Bill, we tried to right some of these wrongs. We voted to reject the Bill’s plans to make all income tax payers pay more from next year, and we voted to stop the tech giants from benefiting from the Chancellor’s tax cut. We did not succeed in making changes to the Bill, despite giving Government Members today, in as straightforward a way as possible, another chance to exclude tech giants from their tax cut.
Throughout the debates on this Bill, we have also seen the Government reject opportunities to support decent, well-paid jobs, to end tax avoidance by large multinational firms and to back British businesses that have been struggling throughout the outbreak. It was telling that the Minister described workers’ rights and the prospect of paying a living wage as “burdensome conditions” when we suggested that they should be basic conditions of large companies taking the Government’s tax break.
As I said earlier today, it is no wonder that the promised employment Bill was absent from the Queen’s Speech earlier this month. The decision to drop it proves that the Government have no plan to tackle low pay or improve protections for working people. My colleagues and I will push the Government to honour their promises on workers’ rights and to go further, from banning the practice of fire and rehire, which has been deployed so shamefully during covid, to ending exploitation by rogue umbrella companies, as cross-party amendments tabled by right hon. and hon. Members earlier today sought to do.
It is also deeply frustrating and disappointing that, before today, Ministers had failed on three occasions since we began discussing the Bill to take up opportunities to back President Biden’s plans for a global minimum corporate tax rate. Today, they refused again, and they voted against our new clause, which would have required them to be transparent about the impact that a global minimum corporate tax rate on large multinationals would have in the UK. Britain should be taking a leading role in striking this global deal. It would bring in billions of pounds of tax every year, which could be invested in British public services and industry. It would level the playing field for British businesses that are currently undercut by a few large multinationals that shift profits overseas. It would also show the world that Britain believes in playing fair when we host the G7 summit next month.
The Government should have used the Bill to help people get back on their feet as we begin to emerge from covid. They should have been supporting British businesses that have been struggling throughout the outbreak. They should have begun building a country that lets neither workers be treated badly, nor a few large multinationals avoid paying their tax. Our tax system must have fairness at its heart, yet this Government are making households right across the country pay more tax, while letting Amazon pay no tax at all and leaving British businesses to be undercut by large multinational firms that shift their profits to tax havens overseas. That is not what our country needs. Those are not the actions of a Government who can claim to be on the side of the British people, and this is not a Bill that we can support.
Alison Thewliss
I want to begin, as others have done, with a few thank yous. I thank the Minister for so politely rejecting all our amendments. I thank those on the Opposition Benches for the good spirit in which they conducted themselves during the Bill. I thank our research team in Westminster—Scott Taylor and Jonathan Kiehlmann—and Mhairi Love in my office. I thank my hon. Friends the Members for Glenrothes (Peter Grant) and for Gordon (Richard Thomson), and I thank the Clerks of the Committee, Chris Stanton and Joanna Dodd, for their patience. I want to pay particular thanks to George Crozier, the head of external relations for the Chartered Institute of Taxation, the Association of Taxation Technicians and the Low Incomes Tax Reform Group, for being a continual source of support and advice, and for his patience in explaining many of the tax measures to those of us who are not as well versed in the tax system as he is.
This Bill fell short in a number of ways. The Government are always keen to talk about the power of the Union, but it is the power of the Union not to extend support schemes, not to cover the excluded, not to keep the universal credit uplift going, not to extend the VAT reduction to hospitality and tourism, not to provide the support and stimulus that this country so dearly needs, rather than further austerity coming down the road, and not to tackle the scourge of dirty money in our country—the ongoing scandal of tax avoidance and evasion. Instead, we would like to see more of Scotland’s priorities delivered by a Parliament closer to home—priorities to build a sustainable green recovery, to provide a much needed stimulus and to give us the full range of levers over our economy so that we can make a real difference to the lives of the people we are proud to have working and living in Scotland, wherever in the world they have come from. All of these things require Scotland to have the full power of independence, which is why I hope it will not be too much longer before we have all those controls in the Parliament in Scotland.
Question put, That the Bill be now read the Third time.
Business without Debate
East West Rail: Aylesbury Spur
(3 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Rob Butler (Aylesbury) (Con)
I very much welcome the opportunity that this Adjournment debate presents to raise a matter of great importance to my constituents—the Aylesbury spur of East West Rail. No, Mr Deputy Speaker, your ears have not deceived you: this is indeed a Member of Parliament from Buckinghamshire calling for a rail line in his constituency. I recognise that this may come as something of a shock to the Minister and perhaps even more so to the officials in his Department. But given the Transport Department’s sterling record in telling my constituents that a behemoth of a railway in their local area is absolutely essential to the future of the country, I rise in a mood of cautious optimism that they will similarly be able to sing the praises of a far more modest proposal that truly will be appreciated by the people of Aylesbury and the surrounding area.
I am no Dickens and this is no tale of two cities, but it is a tale of two railways. There is the big, bad, scary one: the one that destroys ancient woodlands, that has an insatiable appetite to gobble up billions of pounds of taxpayers’ cash, and that will make it harder, not easier, for us to be carbon neutral by 2050. Then there is the smaller, gentler, friendlier one: the one that will connect towns striving to succeed in the post-pandemic world, that can play a key role in an integrated local transport system with buses, cycling and walking, and that can support the next generation’s heartfelt desires for a greener, more sustainable future. We could call the bad one HS2 and we could call the good one the Aylesbury spur.
The Aylesbury spur is part of phase 2 of the excellent plan to restore the old Varsity line on which steam trains used to power between the two ancient university cities of Oxford and Cambridge. That line fell victim to the Beeching axe in the late 1960s. Even then, many thought the decision made little sense. There was therefore a good deal of enthusiasm when proposals were made for the new East West Rail line, complete with an integral Aylesbury spur.
Aylesbury has historically had a bit of bad luck with the railways. The town was once very well connected. The Metropolitan Railway used to call at Aylesbury, but by 1963 the service was curtailed to Amersham. The Great Central Railway used to carry high-speed express trains through Aylesbury, including the Master Cutler, named in homage to my university city of Sheffield and its Company of Cutlers. These services too were removed by 1968, leaving just one direct rail link, to London. So, in Aylesbury we have lost rail connections over the years. I respectfully suggest that it is now time to reverse that trend, and indeed that the Aylesbury spur is crucial to the success of the town in the future.
Aylesbury is almost unrecognisable from the traditional market town where I was born half a century ago. Even as the millennium approached, large estates such as Fairford Leys and Berryfields were but fields; now they are thriving communities enabling people from near and far to purchase their own property. In the past 10 years alone, nearly 10,000 homes have been built in Aylesbury Vale, with a concomitant increase in population of more than 10%. However, all this development has come at an enormous cost. It is no exaggeration to say that it has created a nightmare situation for residents. Infrastructure in the town is at breaking point, and the traffic is unequivocally the No. 1 concern. In fact, The Bucks Herald reported last year that Aylesbury has the eighth worst traffic congestion in the country. It was the only town in the top, or perhaps I should say bottom, 10; everywhere else was a city. Like many other residents in my constituency, I have whiled away the hours sitting in queuing traffic on the Tring Road, the Bicester Road or the Wendover Road trying to get from one side of the town to the other. This is all the more frustrating when we know that nearly 50% of the traffic that comes to the town does not actually stop there, but is passing through on its way somewhere else, in the meantime creating an absolute bottleneck.
However, worse is to come for our creaking road network, because the house building has not finished yet—far from it. Aylesbury Vale is expected to accommodate a further 32,000 homes by 2033, with 16,000 of them in and around Aylesbury itself. To have any chance of coping with the huge increase in population this entails, the town needs rapid, significant and sustained investment in infrastructure. The East West Rail Aylesbury spur would go a long way to plugging the gap.
Unfortunately, when funding was granted last year for the construction of phase 2 of East West Rail, to the great consternation of local residents and businesses, it did not extend down to my constituency, but only covered the line between Bicester and Bletchley. This is despite the inclusion of the Aylesbury spur in the Department for Transport’s own document making the case for phase 2 of East West Rail. Indeed, specific reference is made to the town in the text. Let me be clear: the Aylesbury spur is not described as a possible later addition, and it is not a dotted line on the diagram showing the route; it is a clear and integral part of the plan. There is even a very attractive photo of Aylesbury town centre on the East West Rail website, yet suddenly Aylesbury has been excluded from the funding announcement, prompting fears that the money will never come and that the spur will be left to wither and die.
Why this should be was all rather a mystery, because the business case for phase 2 of East West Rail, including the Aylesbury spur, has always been crystal clear. It has a benefit-cost ratio of between 1.3 and 2.4, depending on assumptions made about economic and housing growth in the Oxford-Cambridge arc. The spatial framework for the arc, which the Government have very recently published, would lead one to assume that the BCR is likely to be in the upper half of the range, but in order not to be accused of gilding a lily, let me use the bottom of the range—the figure of 1.3, which is the baseline of the Department for Transport’s national trip end model.
Let us now consider the rail line that has already been given the go-ahead and is under construction, HS2—the bad guy in this story. The full business case published in April last year gives a benefit-cost ratio of 1.2 for the two phases currently given parliamentary approval. That figure of 1.2 is, in other words, lower than the lowest point for East West Rail, but that HS2 figure is not the bottom of its range. It is a figure that includes what are known as wider economic benefits, defined as
“monetised elements where the evidence is developing”.
I think in layman’s language that means, “where we don’t really know yet”. To put it simply, the business case for this phase of East West Rail is stronger than the business case for this phase of HS2.
In addition to the economic benefit, by the Department for Transport’s own admission, the Aylesbury spur would enable my constituents to experience high-speed travel for themselves, rather than just watching trains zip across their beautiful landscape. The strategic case for phase 2 of East West Rail states that the current journey time by rail from Aylesbury to Milton Keynes—a distance of 20 miles as the crow flies—is nearly two and a half hours. It requires two changes and a trip on the London underground. However, with the construction of the Aylesbury spur, that journey time would be slashed to a dizzying 38 minutes. A reduction of 75% in travel time is surely in itself a compelling argument.
While I hope I have made a strong case for East West Rail’s Aylesbury spur, I recognise that there may still be a degree of confusion about why we could possibly want yet more devastation of countryside or disruption to our communities, given our experience with HS2. The answer is simple: the Aylesbury spur would not require such devastation or disruption. That is because the Aylesbury spur is not a brand-new line. This little spur does not need Florence the tunnel boring machine to growl its way beneath the Chilterns, and it will not necessitate ancient woodlands being ripped up or countless farmers to be deprived of their land, yet left waiting years for compensation. In fact, most of the track for the Aylesbury spur is already laid, and currently used for freight. It requires relatively minor adjustments to be converted for passenger use, the addition of some passing tracks, and to be joined with the rest of the EWR line near Calvert. While I am certainly no engineer, this does seem to be well within our country’s capabilities.
In fact, far from replicating the environmental disaster that is HS2, the Aylesbury spur of East West Rail provides another important opportunity to help us in our goal to reach net zero by 2050. This is a commitment that is already being embraced in Aylesbury, most particularly with our designs for a garden town. It has bold ambitions, with sustainable transport at its heart. Our current trial of e-scooters demonstrates our enthusiasm for new and innovative modes of transport. What is more, the Aylesbury spur could drastically reduce the pollution suffered by residents living along the town’s busiest roads. For while Aylesbury Vale generally has good air quality, there are two locations where concentrations of nitrogen dioxide exceed what are known as the objective levels. Unsurprisingly, both are on the arterial routes close to the town centre.
Providing a feasible alternative to travel by rail would enable residents and commuters to leave their cars at home—but not just residents and commuters, Mr Deputy Speaker, because we are just beginning English Tourism Week 2021. I want to see far more tourists coming to visit Aylesbury: to experience the heritage of our historic old town; to enjoy the marvellous performances by our local Unbound theatre company at the Queens Park Arts Centre; to see the uniquely painted Tudor walls in our fine museum; to eat, drink and dance in the restaurants, the bars and the clubs that are springing back to life post pandemic; to walk by the canal and wonder at the beauty of the Chiltern hills on a tricycle tour. Aylesbury is bursting with attractions and it is frankly selfish to keep them for ourselves. The Aylesbury spur would enable so many thousands more people to come from across the country to share in all that we have to offer.
I submit that it is absolutely right and reasonable for my constituents to say to the Government that if we must have all the disruption of HS2 and if we must endure new housing construction, then the least consolation would be to give us the railway that we do want, and indeed thought that we were going to get. It has support from residents, with a petition still collecting signatures. It is championed by Buckinghamshire Council, which has itself contributed millions of pounds to funding the scheme’s development. It is backed by Buckinghamshire’s local enterprise partnership and by Bucks Business First.
The station is there, most of the track is there, and the passengers are poised. Only last week, the Transport Secretary himself told this House that rail will shape our future. He said:
“No other form of transport can bind the nation so effectively and help us to level up our country, bringing new jobs and investment…as we build back from covid.”—[Official Report, 20 May 2021; Vol. 695, c. 888.]
I could not agree more, and, in Aylesbury, we want to be part of that bright new future. It would be odd indeed if, at a time when the Government have pledged to expand the rail network, not shrink it, the planned Aylesbury spur disappeared from the iron web of Great British Railways.
Aylesbury is the proud county town of Buckinghamshire, but our pride is worn lightly. We are humble in our request of Government. I began with a reference to Dickens, I end with one to Rev. W. Awdry: we have no need for the slightly arrogant big blue express engine, Gordon, hurtling across our countryside with a degree of disdain, for us a simple but enthusiastic Thomas the tank engine on a modest spur will suffice.
I respectfully ask the Minister to put a smile on the faces of my constituents and approve funding for the Aylesbury spur, and, in so doing, help level up our town. Make Aylesbury an even better place to live, work, visit and invest.
Mr Deputy Speaker (Mr Nigel Evans)
Greg Smith has sought and received permission to make a short contribution from the mover of the motion, Rob Butler, and the Minister responding, Chris Heaton-Harris, and I have been informed as per the rules.
Greg Smith (Buckingham) (Con)
I congratulate my hon. Friend and constituency neighbour the Member for Aylesbury (Rob Butler) on securing this debate. He has made the case for the Aylesbury spur incredibly eloquently, and I wish to add just a few very brief comments to support the case that he has made.
As my hon. Friend said, this is the railway that we do want in Buckinghamshire. Within the county of Buckinghamshire, the existing approved stretch of East West Rail is currently entirely in my constituency as it arrives from Oxfordshire and departs into Milton Keynes. But the Aylesbury spur is vital as it adds a level of connectivity to Buckinghamshire that is truly game changing. A massive part of the appeal of East West Rail to my constituents in the first place was not just connecting, via a new station in Winslow, Bicester to Bletchley, but having that vital link with the Chiltern line in the town of Aylesbury and access to the key services and attractions in around that town, not least Stoke Mandeville Hospital.
As my hon. Friend said, given the suffering we have faced in Buckinghamshire from the railway we do not want, HS2, and the significant disruption East West Rail has itself brought on the main line during that construction phase, it can be only fair and equitable for the full East West Rail connectivity to be delivered. As he outlined, the spur is on a line that is already in existence and being used for aggregate deliveries and freight.
The spur is the key to unlocking the full potential of this east-west connection, which is why, despite those disruptive and frustrating impacts building East West Rail has caused—the subject dominates so much of my time and I am grateful that the Minister has engaged with it in trying to help resolve things—I truly welcome the boost it will bring to the north of Buckinghamshire. It will reduce congestion and pollution, create new job opportunities and allow for that decisive step towards enhancing economic prosperity, particularly for our rural communities. My constituents need to know that their patience will be worth it and that they will reap the full benefits of restoring this vital link between some of the fastest-growing areas of the south-east. We have waited long enough. We really need the Aylesbury spur to be delivered.
The Minister of State, Department for Transport (Chris Heaton-Harris)
I congratulate my hon. Friends the Members for Aylesbury (Rob Butler) and for Buckingham (Greg Smith). My hon. Friend the Member for Aylesbury has made a compelling case for the spur and has done well to secure this debate on transport in his constituency. He made an informative speech on the potential for East West Rail to serve Aylesbury in the future and outlined the fantastic attractions that exist in his county town and constituency. Obviously, he is a strong advocate for a place he truly loves. I thank him for his kind words about the East West Rail project. I feel lucky in this instance that I am the sponsor Minister for a railway that people want, rather than for one that others do not.
I have listened carefully to my hon. Friend’s representations about the importance of East West Rail to his constituency and will try to address many of them now. As he knows, in January the Government demonstrated their commitment to supporting national and regional connectivity by announcing £760 million of funding to deliver the next stage of East West Rail between Bicester and Bletchley, reinstating direct rail services for the first time since the 1960s. This funding highlights the crucial underpinning role that East West Rail will play in supporting Government ambitions for the Oxford-Cambridge arc. It is part of our nationwide commitment to build back vital connections and unlock access to jobs, education and housing.
Alongside this important step forward, the design, development and delivery of this and future stages of East West Rail was changed. Instead of delivering East West Rail in sections—western and central—it will be delivered in “connection stages”. Connection stage 1 represents delivery of the scheme up to Bletchley and Milton Keynes. Connection stage 2 will take it further east, from Bletchley to Bedford. Connection stage 3 will deliver a brand new railway between Bedford and Cambridge. I understand my hon. Friend’s concerns and those of his constituents that the proposed spur connecting Aylesbury and Milton Keynes, which previously formed part of the western section, is not included as part of the three main connection stages. That does not mean that the Aylesbury spur will not go ahead by any means, but it is important that a strong economic case can be made for proceeding with that element of the East West Rail scheme, and that a reliable rail service can be introduced without jeopardising existing services.
As we level up our economy, I look to my hon. Friend to marshal the support and resources of organisations in his constituency. The Government’s response to the covid-19 pandemic has placed a great strain on finances, and led to many difficult decisions having to be made on the prioritisation of resources that meet the levelling-up agenda. Through partnership funding and regional commitment, I believe that a much stronger case can be made to deliver East West Rail services to Aylesbury. To match that regional commitment, the Secretary of State for Transport and I have instructed our officials in the Department to include financial provision for the design and delivery of the Aylesbury spur as part of the comprehensive spending review that will take place later this year.
As my hon. Friend will appreciate, there will be many competing demands from a wide variety of schemes as part of that process, and boosting the available funding through local contributions will make the Aylesbury spur an even more attractive proposition. As Rail Minister, I will continue to ensure that East West Rail works hard with its stakeholders to drive down costs and make the strongest possible case for the scheme to be delivered in full.
If we can work together to find a way to deliver the East West Rail Aylesbury spur, that will build on the investment already made by this Government in my hon. Friend’s constituency. That includes funding for the Stocklake and Aylesbury eastern link roads to support crucial housing development in the area, and £170 million has been awarded to Aylesbury’s housing infrastructure fund bid. Aylesbury has also benefited from the rural mobility fund. That demonstrates the Government’s commitment to investing in Buckinghamshire through both infrastructure and public transport and supporting those growth ambitions. As my hon. Friend may be aware, East West Rail is currently undertaking a non-statutory consultation on the future direction of the scheme, and I urge him and his constituents to respond to that.
I hope that I have kept the door open as far as I possibly can, without treading on the toes of my Treasury colleagues. I hope to work with my hon. Friend on completing the Aylesbury spur as we move forward in this Parliament.
Question put and agreed to.
Members Eligible for a Proxy Vote
Member eligible for proxy vote | Nominated proxy |
|---|---|
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab) | Bell Ribeiro-Addy |
Debbie Abrahams (Oldham East and Saddleworth) (Lab) | Chris Elmore |
Nigel Adams (Selby and Ainsty) (Con) | Stuart Andrew |
Bim Afolami (Hitchin and Harpenden) (Con) | Stuart Andrew |
Adam Afriyie (Windsor) (Con) | Stuart Andrew |
Imran Ahmad Khan (Wakefield) (Con) | Stuart Andrew |
Nickie Aiken (Cities of London and Westminster) (Con) | Stuart Andrew |
Rushanara Ali (Bethnal Green and Bow) (Lab) | Chris Elmore |
Tahir Ali (Birmingham, Hall Green) (Lab) | Chris Elmore |
Lucy Allan (Telford) (Con) | Stuart Andrew |
Dr Rosena Allin-Khan (Tooting) (Lab) | Chris Elmore |
Mike Amesbury (Weaver Vale) (Lab) | Chris Elmore |
Sir David Amess (Southend West) (Con) | Stuart Andrew |
Fleur Anderson (Putney) (Lab) | Chris Elmore |
Lee Anderson (Ashfield) (Con) | Stuart Andrew |
Stuart Anderson (Wolverhampton South West) (Con) | Stuart Andrew |
Caroline Ansell (Eastbourne) (Con) | Stuart Andrew |
Tonia Antoniazzi (Gower) (Lab) | Chris Elmore |
Edward Argar (Charnwood) (Con) | Stuart Andrew |
Jonathan Ashworth (Leicester South) (Lab) | Chris Elmore |
Sarah Atherton (Wrexham) (Con) | Stuart Andrew |
Victoria Atkins (Louth and Horncastle) (Con) | Stuart Andrew |
Gareth Bacon (Orpington) (Con) | Stuart Andrew |
Mr Richard Bacon (South Norfolk) (Con) | Stuart Andrew |
Kemi Badenoch (Saffron Walden) (Con) | Stuart Andrew |
Siobhan Baillie (Stroud) (Con) | Stuart Andrew |
Duncan Baker (North Norfolk) (Con) | Stuart Andrew |
Harriett Baldwin (West Worcestershire) (Con) | Stuart Andrew |
Steve Barclay (North East Cambridgeshire) (Con) | Stuart Andrew |
Hannah Bardell (Livingston) (SNP) | Owen Thompson |
Paula Barker (Liverpool, Wavertree) (Lab) | Chris Elmore |
Mr John Baron (Basildon and Billericay) (Con) | Stuart Andrew |
Simon Baynes (Clwyd South) (Con) | Stuart Andrew |
Margaret Beckett (Derby South) (Lab) | Chris Elmore |
Apsana Begum (Poplar and Limehouse) (Lab) | Bell Ribeiro-Addy |
Aaron Bell (Newcastle-under-Lyme) (Con) | Stuart Andrew |
Hilary Benn (Leeds Central) (Lab) | Chris Elmore |
Scott Benton (Blackpool South) (Con) | Stuart Andrew |
Sir Paul Beresford (Mole Valley) (Con) | Stuart Andrew |
Jake Berry (Rossendale and Darwen) (Con) | Stuart Andrew |
Clive Betts (Sheffield South East) (Lab) | Chris Elmore |
Saqib Bhatti (Meriden) (Con) | Stuart Andrew |
Mhairi Black (Paisley and Renfrewshire South) (SNP) | Owen Thompson |
Ian Blackford (Ross, Skye and Lochaber) (SNP) | Owen Thompson |
Bob Blackman (Harrow East) (Con) | Stuart Andrew |
Kirsty Blackman (Aberdeen North) (SNP) | Owen Thompson |
Olivia Blake (Sheffield, Hallam) (Lab) | Chris Elmore |
Paul Blomfield (Sheffield Central) (Lab) | Chris Elmore |
Crispin Blunt (Reigate) (Con) | Stuart Andrew |
Peter Bone (Wellingborough) (Con) | Stuart Andrew |
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP) | Owen Thompson |
Andrew Bowie (West Aberdeenshire and Kincardine) (Con) | Stuart Andrew |
Ben Bradley (Mansfield) (Con) | Stuart Andrew |
Karen Bradley (Staffordshire Moorlands) (Con) | Stuart Andrew |
Ben Bradshaw (Exeter) (Lab) | Chris Elmore |
Suella Braverman (Fareham) (Con) | Stuart Andrew |
Kevin Brennan (Cardiff West) (Lab) | Chris Elmore |
Jack Brereton (Stoke-on-Trent South) (Con) | Stuart Andrew |
Andrew Bridgen (North West Leicestershire) (Con) | Stuart Andrew |
Steve Brine (Winchester) (Con) | Stuart Andrew |
Paul Bristow (Peterborough) (Con) | Stuart Andrew |
Sara Britcliffe (Hyndburn) (Con) | Stuart Andrew |
Deidre Brock (Edinburgh North and Leith) (SNP) | Owen Thompson |
James Brokenshire (Old Bexley and Sidcup) (Con) | Stuart Andrew |
Alan Brown (Kilmarnock and Loudon) (SNP) | Owen Thompson |
Ms Lyn Brown (West Ham) (Lab) | Chris Elmore |
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab) | Chris Elmore |
Anthony Browne (South Cambridgeshire) (Con) | Stuart Andrew |
Fiona Bruce (Congleton) (Con) | Stuart Andrew |
Chris Bryant (Rhondda) (Lab) | Chris Elmore |
Felicity Buchan (Kensington) (Con) | Stuart Andrew |
Ms Karen Buck (Westminster North) (Lab) | Chris Elmore |
Robert Buckland (South Swindon) (Con) | Stuart Andrew |
Alex Burghart (Brentwood and Ongar) (Con) | Stuart Andrew |
Richard Burgon (Leeds East) (Lab) | Bell Ribeiro-Addy |
Conor Burns (Bournemouth West) (Con) | Stuart Andrew |
Dawn Butler (Brent Central) (Lab) | Bell Ribeiro-Addy |
Rob Butler (Aylesbury) (Con) | Stuart Andrew |
Ian Byrne (Liverpool, West Derby) (Lab) | Bell Ribeiro-Addy |
Liam Byrne (Birmingham, Hodge Hill) (Lab) | Chris Elmore |
Ruth Cadbury (Brentford and Isleworth) (Lab) | Chris Elmore |
Alun Cairns (Vale of Glamorgan) (Con) | Stuart Andrew |
Amy Callaghan (East Dunbartonshire) (SNP) | Owen Thompson |
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP) | Owen Thompson |
Sir Alan Campbell (Tynemouth) (Con) | Chris Elmore |
Mr Gregory Campbell (East Londonderry) (DUP) | Sammy Wilson |
Dan Carden (Liverpool, Walton) (Lab) | Chris Elmore |
Mr Alistair Carmichael (rt. hon.) (Orkney and Shetland) (LD) | Wendy Chamberlain |
Andy Carter (Warrington South) (Con) | Stuart Andrew |
James Cartlidge (South Suffolk) (Con) | Stuart Andrew |
Sir William Cash (Stone) (Con) | Stuart Andrew |
Miriam Cates (Penistone and Stocksbridge) (Con) | Stuart Andrew |
Alex Chalk (Cheltenham) (Con) | Stuart Andrew |
Sarah Champion (Rotherham) (Lab) | Chris Elmore |
Douglas Chapman (Dunfermline and West Fife) (SNP) | Owen Thompson |
Bambos Charalambous (Enfield, Southgate) (Lab) | Chris Elmore |
Joanna Cherry (Edinburgh South West) (SNP) | Owen Thompson |
Rehman Chishti (Gillingham and Rainham) (Con) | Stuart Andrew |
Sir Christopher Chope (Christchurch) (Con) | Mr William Wragg |
Jo Churchill (Bury St Edmunds) (Con) | Stuart Andrew |
Feryal Clark (Enfield North) (Lab) | Chris Elmore |
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con) | Stuart Andrew |
Theo Clarke (Stafford) (Con) | Stuart Andrew |
Brendan Clarke-Smith (Bassetlaw) (Con) | Stuart Andrew |
Chris Clarkson (Heywood and Middleton) (Con) | Stuart Andrew |
James Cleverly (Braintree) (Con) | Stuart Andrew |
Dr Thérèse Coffey (Suffolk Coastal) (Con) | Stuart Andrew |
Elliot Colburn (Carshalton and Wallington) (Con) | Stuart Andrew |
Damian Collins (Folkestone and Hythe) (Con) | Stuart Andrew |
Daisy Cooper (St Albans) (LD) | Wendy Chamberlain |
Rosie Cooper (West Lancashire) (Lab) | Chris Elmore |
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab) | Chris Elmore |
Jeremy Corbyn (Islington North) (Ind) | Bell Ribeiro-Addy |
Alberto Costa (South Leicestershire) (Con) | Stuart Andrew |
Robert Courts (Witney) (Con) | Stuart Andrew |
Claire Coutinho (East Surrey) (Con) | Stuart Andrew |
Ronnie Cowan (Inverclyde) (SNP) | Owen Thompson |
Sir Geoffrey Cox (Torridge and West Devon) (Con) | Stuart Andrew |
Neil Coyle (Bermondsey and Old Southwark) (Lab) | Chris Elmore |
Stephen Crabb (Preseli Pembrokeshire) (Con) | Stuart Andrew |
Angela Crawley (Lanark and Hamilton East) (SNP) | Owen Thompson |
Stella Creasy (Walthamstow) (Lab) | Chris Elmore |
Virginia Crosbie (Ynys Môn) (Con) | Stuart Andrew |
Tracey Crouch (Chatham and Aylesford) (Con) | Stuart Andrew |
Jon Cruddas (Dagenham and Rainham) (Lab) | Chris Elmore |
John Cryer (Leyton and Wanstead) (Lab) | Chris Elmore |
Judith Cummins (Bradford South) (Lab) | Chris Elmore |
Alex Cunningham (Stockton North) (Lab) | Chris Elmore |
Janet Daby (Lewisham East) (Lab) | Chris Elmore |
James Daly (Bury North) (Con) | Stuart Andrew |
Ed Davey (Kingston and Surbiton) (LD) | Wendy Chamberlain |
Wayne David (Caerphilly) (Lab) | Chris Elmore |
David T. C. Davies (Monmouth) (Con) | Stuart Andrew |
Gareth Davies (Grantham and Stamford) (Con) | Stuart Andrew |
Geraint Davies (Swansea West) (Lab/Co-op) | Chris Elmore |
Dr James Davies (Vale of Clwyd) (Con) | Stuart Andrew |
Mims Davies (Mid Sussex) (Con) | Stuart Andrew |
Alex Davies-Jones (Pontypridd) (Lab) | Chris Elmore |
Philip Davies (Shipley) (Con) | Stuart Andrew |
Mr David Davis (Haltemprice and Howden) (Con) | Stuart Andrew |
Dehenna Davison (Bishop Auckland) (Con) | Ben Everitt |
Martyn Day (Linlithgow and East Falkirk) (SNP) | Owen Thompson |
Thangam Debbonaire (Bristol West) (Lab) | Chris Elmore |
Marsha De Cordova (Battersea) | Bell Ribeiro-Addy |
Mr Tanmanjeet Singh Dhesi (Slough) (Lab) | Chris Elmore |
Caroline Dinenage (Gosport) (Con) | Stuart Andrew |
Miss Sarah Dines (Derbyshire Dales) (Con) | Stuart Andrew |
Mr Jonathan Djanogly (Huntingdon) (Con) | Stuart Andrew |
Leo Docherty (Aldershot) (Con) | Stuart Andrew |
Martin Docherty-Hughes (West Dunbartonshire) (SNP) | Owen Thompson |
Anneliese Dodds (Oxford East) (Lab/Co-op) | Chris Elmore |
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP) | Sammy Wilson |
Michelle Donelan (Chippenham) (Con) | Stuart Andrew |
Dave Doogan (Angus) (SNP) | Owen Thompson |
Ms Nadine Dorries (Mid Bedfordshire) (Con) | Stuart Andrew |
Steve Double (St Austell and Newquay) (Con) | Stuart Andrew |
Stephen Doughty (Cardiff South and Penarth) (Lab) | Chris Elmore |
Peter Dowd (Bootle) (Lab) | Chris Elmore |
Oliver Dowden (Hertsmere) (Con) | Stuart Andrew |
Richard Drax (South Dorset) (Con) | Stuart Andrew |
Jack Dromey (Birmingham, Erdington) (Lab) | Chris Elmore |
Mrs Flick Drummond (Meon Valley) (Con) | Stuart Andrew |
James Duddridge (Rochford and Southend East) (Con) | Stuart Andrew |
Rosie Duffield (Canterbury) (Lab) | Chris Elmore |
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con) | Stuart Andrew |
Philip Dunne (Ludlow) (Con) | Stuart Andrew |
Ms Angela Eagle (Wallasey) (Lab) | Chris Elmore |
Maria Eagle (Garston and Halewood) (Lab) | Chris Elmore |
Colum Eastwood (Foyle) (SDLP) | Ben Lake |
Mark Eastwood (Dewsbury) (Con) | Stuart Andrew |
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind) | Stuart Andrew |
Ruth Edwards (Rushcliffe) (Con) | Stuart Andrew |
Clive Efford (Eltham) (Lab) | Chris Elmore |
Julie Elliott (Sunderland Central) (Lab) | Chris Elmore |
Michael Ellis (Northampton North) (Con) | Stuart Andrew |
Mr Tobias Ellwood (Bournemouth East) (Con) | Stuart Andrew |
Mrs Natalie Elphicke (Dover) (Con) | Stuart Andrew |
Florence Eshalomi (Vauxhall) (Lab/Co-op) | Chris Elmore |
Bill Esterson (Sefton Central) (Lab) | Chris Elmore |
George Eustice (Camborne and Redruth) (Con) | Stuart Andrew |
Chris Evans (Islwyn) (Lab/Co-op) | Chris Elmore |
Dr Luke Evans (Bosworth) (Con) | Stuart Andrew |
Sir David Evennett (Bexleyheath and Crayford) (Con) | Stuart Andrew |
Michael Fabricant (Lichfield) (Con) | Stuart Andrew |
Laura Farris (Newbury) (Con) | Stuart Andrew |
Tim Farron (Westmorland and Lonsdale) (LD) | Wendy Chamberlain |
Stephen Farry (North Down) (Alliance) | Wendy Chamberlain |
Simon Fell (Barrow and Furness) (Con) | Stuart Andrew |
Marion Fellows (Motherwell and Wishaw) (Con) | Owen Thompson |
Margaret Ferrier (Rutherglen and Hamilton West) (Ind) | Stuart Andrew |
Colleen Fletcher (Coventry North East) (Lab) | Chris Elmore |
Katherine Fletcher (South Ribble) (Con) | Stuart Andrew |
Mark Fletcher (Bolsover) (Con) | Stuart Andrew |
Nick Fletcher (Don Valley) (Con) | Stuart Andrew |
Stephen Flynn (Aberdeen South) (SNP) | Owen Thompson |
Vicky Ford (Chelmsford) (Con) | Stuart Andrew |
Kevin Foster (Torbay) (Con) | Stuart Andrew |
Yvonne Fovargue (Makerfield) (Lab) | Chris Elmore |
Dr Liam Fox (North Somerset) (Con) | Stuart Andrew |
Vicky Foxcroft (Lewisham, Deptford) (Lab) | Chris Elmore |
Mary Kelly Foy (City of Durham) (Lab) | Bell Ribeiro-Addy |
Mr Mark Francois (Rayleigh and Wickford) (Con) | Stuart Andrew |
Lucy Frazer (South East Cambridgeshire) (Con) | Stuart Andrew |
George Freeman (Mid Norfolk) (Con) | Stuart Andrew |
Mike Freer (Finchley and Golders Green) (Con) | Stuart Andrew |
Richard Fuller (North East Bedfordshire) (Con) | Stuart Andrew |
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab) | Chris Elmore |
Marcus Fysh (Yeovil) (Con) | Stuart Andrew |
Sir Roger Gale (North Thanet) (Con) | Stuart Andrew |
Barry Gardiner (Brent North) (Lab) | Chris Elmore |
Mark Garnier (Wyre Forest) (Con) | Stuart Andrew |
Ms Nusrat Ghani (Wealden) (Con) | Stuart Andrew |
Nick Gibb (Bognor Regis and Littlehampton) (Con) | Stuart Andrew |
Patricia Gibson (North Ayrshire and Arran) (SNP) | Owen Thompson |
Peter Gibson (Darlington) (Con) | Stuart Andrew |
Jo Gideon (Stoke-on-Trent Central) (Con) | Stuart Andrew |
Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op) | Chris Elmore |
Paul Girvan (South Antrim) (DUP) | Sammy Wilson |
John Glen (Salisbury) (Con) | Stuart Andrew |
Mary Glindon (North Tyneside) (Lab) | Chris Elmore |
Mr Robert Goodwill (Scarborough and Whitby) (Con) | Stuart Andrew |
Michael Gove (Surrey Heath) (Con) | Stuart Andrew |
Patrick Grady (Glasgow North) (SNP) | Owen Thompson |
Richard Graham (Gloucester) (Con) | Stuart Andrew |
Mrs Helen Grant (Maidstone and The Weald) (Con) | Stuart Andrew |
Peter Grant (Glenrothes) (SNP) | Owen Thompson |
James Gray (North Wiltshire) (Con) | Stuart Andrew |
Chris Grayling (Epsom and Ewell) (Con) | Stuart Andrew |
Damian Green (Ashford) (Con) | Stuart Andrew |
Kate Green (Stretford and Urmston) (Lab) | Chris Elmore |
Lilian Greenwood (Nottingham South) (Lab) | Chris Elmore |
Margaret Greenwood (Wirral West) (Lab) | Chris Elmore |
Andrew Griffith (Arundel and South Downs) (Con) | Stuart Andrew |
Nia Griffith (Llanelli) (Lab) | Chris Elmore |
Kate Griffiths (Burton) (Con) | Stuart Andrew |
James Grundy (Leigh) (Con) | Stuart Andrew |
Jonathan Gullis (Stoke-on-Trent North) (Con) | Stuart Andrew |
Andrew Gwynne (Denton and Reddish) (Lab) | Chris Elmore |
Louise Haigh (Sheffield, Heeley) (Lab) | Chris Elmore |
Robert Halfon (Harlow) (Con) | Stuart Andrew |
Luke Hall (Thornbury and Yate) (Con) | Stuart Andrew |
Fabian Hamilton (Leeds North East) (Lab) | Chris Elmore |
Stephen Hammond (Wimbledon) (Con) | Stuart Andrew |
Matt Hancock (West Suffolk) (Con) | Stuart Andrew |
Greg Hands (Chelsea and Fulham) (Con) | Stuart Andrew |
Claire Hanna (Belfast South) (SDLP) | Ben Lake |
Neil Hanvey (Kirkcaldy and Cowdenbeath) (Alba) | Kenny MacAskill |
Emma Hardy (Kingston upon Hull West and Hessle) (Lab) | Chris Elmore |
Ms Harriet Harman (Camberwell and Peckham) (Lab) | Chris Elmore |
Mark Harper (Forest of Dean) (Con) | Stuart Andrew |
Carolyn Harris (Swansea East) (Lab) | Chris Elmore |
Trudy Harrison (Copeland) (Con) | Stuart Andrew |
Sally-Ann Hart (Hastings and Rye) (Con) | Stuart Andrew |
Simon Hart (Carmarthen West and South Pembrokeshire) (Con) | Stuart Andrew |
Helen Hayes (Dulwich and West Norwood) (Lab) | Chris Elmore |
Sir John Hayes (South Holland and The Deepings) (Con) | Stuart Andrew |
Sir Oliver Heald (North East Hertfordshire) (Con) | Stuart Andrew |
John Healey (Wentworth and Dearne) (Lab) | Chris Elmore |
James Heappey (Wells) (Con) | Stuart Andrew |
Chris Heaton-Harris (Daventry) (Con) | Stuart Andrew |
Gordon Henderson (Sittingbourne and Sheppey) (Con) | Stuart Andrew |
Sir Mark Hendrick (Preston) (Lab/Co-op) | Chris Elmore |
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) | Owen Thompson |
Darren Henry (Broxtowe) (Con) | Stuart Andrew |
Antony Higginbotham (Burnley) (Con) | Stuart Andrew |
Damian Hinds (East Hampshire) (Con) | Stuart Andrew |
Simon Hoare (North Dorset) (Con) | Stuart Andrew |
Wera Hobhouse (Bath) (LD) | Wendy Chamberlain |
Dame Margaret Hodge (Barking) (Lab) | Chris Elmore |
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab) | Chris Elmore |
Mr Richard Holden (North West Durham) (Con) | Stuart Andrew |
Kate Hollern (Blackburn) (Lab) | Chris Elmore |
Kevin Hollinrake (Thirsk and Malton) (Con) | Stuart Andrew |
Adam Holloway (Gravesham) (Con) | Stuart Andrew |
Paul Holmes (Eastleigh) (Con) | Stuart Andrew |
Rachel Hopkins (Luton South) (Lab) | Chris Elmore |
Stewart Hosie (Dundee East) (SNP) | Owen Thompson |
Sir George Howarth (Knowsley) (Lab) | Chris Elmore |
John Howell (Henley) (Con) | Stuart Andrew |
Paul Howell (Sedgefield) (Con) | Stuart Andrew |
Nigel Huddleston (Mid Worcestershire) (Con) | Stuart Andrew |
Dr Neil Hudson (Penrith and The Border) (Con) | Stuart Andrew |
Eddie Hughes (Walsall North) (Con) | Stuart Andrew |
Jane Hunt (Loughborough) (Con) | Stuart Andrew |
Jeremy Hunt (South West Surrey) (Con) | Stuart Andrew |
Tom Hunt (Ipswich) (Con) | Stuart Andrew |
Rupa Huq (Ealing Central and Acton) (Lab) | Chris Elmore |
Imran Hussain (Bradford East) (Lab) | Bell Ribeiro-Addy |
Mr Alister Jack (Dumfries and Galloway) (Con) | Stuart Andrew |
Christine Jardine (Edinburgh West) (LD) | Wendy Chamberlain |
Dan Jarvis (Barnsley Central) (Lab) | Chris Elmore |
Sajid Javid (Bromsgrove) (Con) | Stuart Andrew |
Mr Ranil Jayawardena (North East Hampshire) (Con) | Stuart Andrew |
Sir Bernard Jenkin (Harwich and North Essex) (Con) | Stuart Andrew |
Mark Jenkinson (Workington) (Con) | Stuart Andrew |
Andrea Jenkyns (Morley and Outwood) (Con) | Stuart Andrew |
Robert Jenrick (Newark) (Con) | Stuart Andrew |
Boris Johnson (Uxbridge and South Ruislip) (Con) | Stuart Andrew |
Dr Caroline Johnson (Sleaford and North Hykeham) (Con) | Stuart Andrew |
Dame Diana Johnson (Kingston upon Hull North) (Lab) | Chris Elmore |
Gareth Johnson (Dartford) (Con) | Stuart Andrew |
Kim Johnson (Liverpool, Riverside) (Lab) | Chris Elmore |
David Johnston (Wantage) (Con) | Stuart Andrew |
Darren Jones (Bristol North West) (Lab) | Chris Elmore |
Mr David Jones (Clwyd West) (Con) | Stuart Andrew |
Fay Jones (Brecon and Radnorshire) (Con) | Stuart Andrew |
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab) | Chris Elmore |
Mr Kevan Jones (North Durham) (Lab) | Chris Elmore |
Mr Marcus Jones (Nuneaton) (Con) | Stuart Andrew |
Ruth Jones (Newport West) (Lab) | Chris Elmore |
Sarah Jones (Croydon Central) (Lab) | Chris Elmore |
Simon Jupp (East Devon) (Con) | Stuart Andrew |
Mike Kane (Wythenshawe and Sale East) (Lab) | Chris Elmore |
Daniel Kawczynski (Shrewsbury and Atcham) (Con) | Stuart Andrew |
Alicia Kearns (Rutland and Melton) (Con) | Stuart Andrew |
Gillian Keegan (Chichester) (Con) | Stuart Andrew |
Barbara Keeley (Worsley and Eccles South) (Lab) | Chris Elmore |
Liz Kendall (Leicester West) (Lab) | Chris Elmore |
Afzal Khan (Manchester, Gorton) (Lab) | Chris Elmore |
Stephen Kinnock (Aberavon) (Lab) | Chris Elmore |
Sir Greg Knight (East Yorkshire) (Con) | Stuart Andrew |
Julian Knight (Solihull) (Con) | Stuart Andrew |
Danny Kruger (Devizes) (Con) | Stuart Andrew |
Kwasi Kwarteng (Spelthorne) (Con) | Stuart Andrew |
Peter Kyle (Hove) (Lab) | Chris Elmore |
Mr David Lammy (Tottenham) (Lab) | Chris Elmore |
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con) | Stuart Andrew |
Robert Largan (High Peak) (Con) | Stuart Andrew |
Mrs Pauline Latham (Mid Derbyshire) (Con) | Stuart Andrew |
Ian Lavery (Wansbeck) (Lab) | Bell Ribeiro-Addy |
Chris Law (Dundee West) (SNP) | Owen Thompson |
Andrea Leadsom (South Northamptonshire) (Con) | Stuart Andrew |
Sir Edward Leigh (Gainsborough) (Con) | Stuart Andrew |
Ian Levy (Blyth Valley) (Con) | Stuart Andrew |
Mrs Emma Lewell-Buck (South Shields) (Lab) | Chris Elmore |
Andrew Lewer (Northampton South) (Con) | Stuart Andrew |
Brandon Lewis (Great Yarmouth) (Con) | Stuart Andrew |
Clive Lewis (Norwich South) (Lab) | Chris Elmore |
Dr Julian Lewis (New Forest East) (Con) | Stuart Andrew |
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) | Stuart Andrew |
David Linden (Glasgow East) (SNP) | Owen Thompson |
Tony Lloyd (Rochdale) (Lab) | Chris Elmore |
Carla Lockhart (Upper Bann) (DUP) | Sammy Wilson |
Chris Loder (West Dorset) (Con) | Anthony Mangnall |
Mark Logan (Bolton North East) (Con) | Stuart Andrew |
Rebecca Long Bailey (Salford and Eccles) (Lab) | Bell Ribeiro-Addy |
Marco Longhi (Dudley North) (Con) | Stuart Andrew |
Julia Lopez (Hornchurch and Upminster) (Con) | Stuart Andrew |
Jack Lopresti (Filton and Bradley Stoke) (Con) | Stuart Andrew |
Mr Jonathan Lord (Woking) (Con) | Stuart Andrew |
Tim Loughton (East Worthing and Shoreham) (Con) | Stuart Andrew |
Caroline Lucas (Brighton, Pavilion) (Green) | Bell Ribeiro-Addy |
Holly Lynch (Halifax) (Lab) | Chris Elmore |
Steve McCabe (Birmingham, Selly Oak) (Lab) | Chris Elmore |
Kerry McCarthy (Bristol East) (Lab) | Chris Elmore |
Karl MᶜCartney (Lincoln) (Con) | Stuart Andrew |
Siobhain McDonagh (Mitcham and Morden) (Lab) | Chris Elmore |
Andy McDonald (Middlesbrough) (Lab) | Chris Elmore |
Stewart Malcolm McDonald (Glasgow South) (SNP) | Owen Thompson |
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP) | Owen Thompson |
John McDonnell (Hayes and Harlington) (Lab) | Bell Ribeiro-Addy |
Mr Pat McFadden (Wolverhampton South East) (Lab) | Chris Elmore |
Conor McGinn (St Helens North) (Lab) | Chris Elmore |
Alison McGovern (Wirral South) (Lab) | Chris Elmore |
Craig Mackinlay (South Thanet) (Con) | Stuart Andrew |
Catherine McKinnell (Newcastle upon Tyne North) (Lab) | Chris Elmore |
Cherilyn Mackrory (Truro and Falmouth) (Con) | Stuart Andrew |
Anne McLaughlin (Glasgow North East) (SNP) | Owen Thompson |
Rachel Maclean (Redditch) (Con) | Stuart Andrew |
Jim McMahon (Oldham West and Royton) (Lab) | Chris Elmore |
Anna McMorrin (Cardiff North) (Lab) | Chris Elmore |
John Mc Nally (Falkirk) (SNP) | Owen Thompson |
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) | Owen Thompson |
Stephen McPartland (Stevenage) (Con) | Stuart Andrew |
Esther McVey (Tatton) (Con) | Stuart Andrew |
Justin Madders (Ellesmere Port and Neston) (Lab) | Chris Elmore |
Khalid Mahmood (Birmingham, Perry Barr) (Lab) | Chris Elmore |
Shabana Mahmood (Birmingham, Ladywood) (Lab) | Chris Elmore |
Alan Mak (Havant) (Con) | Stuart Andrew |
Seema Malhotra (Feltham and Heston) (Lab) | Chris Elmore |
Kit Malthouse (North West Hampshire) (Con) | Stuart Andrew |
Julie Marson (Hertford and Stortford) (Con) | Stuart Andrew |
Rachael Maskell (York Central) (Lab) | Chris Elmore |
Christian Matheson (City of Chester) (Lab) | Chris Elmore |
Mrs Theresa May (Maidenhead) (Con) | Stuart Andrew |
Jerome Mayhew (Broadland) (Con) | Stuart Andrew |
Paul Maynard (Blackpool North and Cleveleys) (Con) | Stuart Andrew |
Ian Mearns (Gateshead) (Lab) | Bell Ribeiro-Addy |
Mark Menzies (Fylde) (Con) | Stuart Andrew |
Huw Merriman (Bexhill and Battle) (Con) | Stuart Andrew |
Stephen Metcalfe (South Basildon and East Thurrock) (Con) | Stuart Andrew |
Edward Miliband (Doncaster North) (Lab) | Chris Elmore |
Robin Millar (Aberconwy) (Con) | Stuart Andrew |
Mrs Maria Miller (Basingstoke) (Con) | Stuart Andrew |
Amanda Milling (Cannock Chase) (Con) | Stuart Andrew |
Nigel Mills (Amber Valley) (Con) | Stuart Andrew |
Navendu Mishra (Stockport) (Lab) | Chris Elmore |
Mr Andrew Mitchell (Sutton Coldfield) (Con) | Stuart Andrew |
Gagan Mohindra (South West Hertfordshire) (Con) | Stuart Andrew |
Carol Monaghan (Glasgow North West) | Owen Thompson |
Damien Moore (Southport) (Con) | Stuart Andrew |
Robbie Moore (Keighley) (Con) | Stuart Andrew |
Layla Moran (Oxford West and Abingdon) (LD) | Wendy Chamberlain |
Penny Mordaunt (Portsmouth North) (Con) | Stuart Andrew |
Stephen Morgan (Portsmouth South) (Lab) | Chris Elmore |
Anne Marie Morris (Newton Abbot) (Con) | Stuart Andrew |
David Morris (Morecambe and Lunesdale) (Con) | Stuart Andrew |
Grahame Morris (Easington) (Lab) | Chris Elmore |
Joy Morrissey (Beaconsfield) (Con) | Stuart Andrew |
Jill Mortimer (Hartlepool) (Con) | Stuart Andrew |
Wendy Morton (Aldridge-Brownhills) (Con) | Stuart Andrew |
Dr Kieran Mullan (Crewe and Nantwich) (Con) | Stuart Andrew |
Holly Mumby-Croft (Scunthorpe) (Con) | Stuart Andrew |
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con) | Stuart Andrew |
Ian Murray (Edinburgh South) (Lab) | Chris Elmore |
James Murray (Ealing North) (Lab/Co-op) | Chris Elmore |
Mrs Sheryll Murray (South East Cornwall) (Con) | Stuart Andrew |
Andrew Murrison (South West Wiltshire) (Con) | Stuart Andrew |
Lisa Nandy (Wigan) (Lab) | Chris Elmore |
Sir Robert Neill (Bromley and Chislehurst) (Con) | Stuart Andrew |
Gavin Newlands (Paisley and Renfrewshire North) (SNP) | Owen Thompson |
Charlotte Nichols (Warrington North) (Lab) | Chris Elmore |
Lia Nici (Great Grimsby) (Con) | Stuart Andrew |
John Nicolson (Ochil and South Perthshire) (SNP) | Owen Thompson |
Caroline Nokes (Romsey and Southampton North) (Con) | Stuart Andrew |
Jesse Norman (Hereford and South Herefordshire) (Con) | Stuart Andrew |
Alex Norris (Nottingham North) (Lab/Co-op) | Chris Elmore |
Neil O’Brien (Harborough) (Con) | Stuart Andrew |
Brendan O’Hara (Argyll and Bute) (SNP) | Owen Thompson |
Dr Matthew Offord (Hendon) (Con) | Stuart Andrew |
Sarah Olney (Richmond Park) (LD) | Wendy Chamberlain |
Chi Onwurah (Newcastle upon Tyne Central) (Lab) | Chris Elmore |
Guy Opperman (Hexham) (Con) | Stuart Andrew |
Abena Oppong-Asare (Erith and Thamesmead) (Lab) | Chris Elmore |
Kate Osamor (Edmonton) (Lab/Co-op) | Bell Ribeiro-Addy |
Kate Osborne (Jarrow) (Lab) | Bell Ribeiro-Addy |
Kirsten Oswald (East Renfrewshire) (SNP) | Owen Thompson |
Taiwo Owatemi (Coventry North West) (Lab) | Chris Elmore |
Sarah Owen (Luton North) (Lab) | Chris Elmore |
Ian Paisley (North Antrim) (DUP) | Sammy Wilson |
Neil Parish (Tiverton and Honiton) (Con) | Stuart Andrew |
Priti Patel (Witham) (Con) | Stuart Andrew |
Mr Owen Paterson (North Shropshire) (Con) | Stuart Andrew |
Mark Pawsey (Rugby) (Con) | Stuart Andrew |
Stephanie Peacock (Barnsley East) (Lab) | Chris Elmore |
Sir Mike Penning (Hemel Hempstead) (Con) | Stuart Andrew |
Matthew Pennycook (Greenwich and Woolwich) (Lab) | Chris Elmore |
John Penrose (Weston-super-Mare) (Con) | Stuart Andrew |
Andrew Percy (Brigg and Goole) (Con) | Stuart Andrew |
Mr Toby Perkins (Chesterfield) (Lab) | Chris Elmore |
Jess Phillips (Birmingham, Yardley) (Lab) | Chris Elmore |
Bridget Phillipson (Houghton and Sunderland South) (Lab) | Chris Elmore |
Chris Philp (Croydon South) (Con) | Stuart Andrew |
Christopher Pincher (Tamworth) (Con) | Stuart Andrew |
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op) | Chris Elmore |
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con) | Peter Aldous |
Rebecca Pow (Taunton Deane) (Con) | Stuart Andrew |
Lucy Powell (Manchester Central) (Lab/Co-op) | Chris Elmore |
Victoria Prentis (Banbury) (Con) | Stuart Andrew |
Mark Pritchard (The Wrekin) (Con) | Stuart Andrew |
Anum Qaisar-Javed (Airdrie and Shotts) (SNP) | Owen Thompson |
Jeremy Quin (Horsham) (Con) | Stuart Andrew |
Will Quince (Colchester) (Con) | Stuart Andrew |
Yasmin Qureshi (Bolton South East) (Lab) | Chris Elmore |
Dominic Raab (Esher and Walton) (Con) | Stuart Andrew |
Tom Randall (Gedling) (Con) | Stuart Andrew |
Angela Rayner (Ashton-under-Lyne) (Lab) | Chris Elmore |
John Redwood (Wokingham) (Con) | Stuart Andrew |
Steve Reed (Croydon North) (Lab/Co-op) | Chris Elmore |
Christina Rees (Neath) (Lab) | Chris Elmore |
Ellie Reeves (Lewisham West and Penge) (Lab) | Chris Elmore |
Rachel Reeves (Leeds West) (Lab) | Chris Elmore |
Jonathan Reynolds (Stalybridge and Hyde) (Lab) | Chris Elmore |
Nicola Richards (West Bromwich East) (Con) | Stuart Andrew |
Angela Richardson (Guildford) (Con) | Stuart Andrew |
Ms Marie Rimmer (St Helens South and Whiston) (Lab) | Chris Elmore |
Rob Roberts (Delyn) (Con) | Stuart Andrew |
Mr Laurence Robertson (Tewkesbury) (Con) | Stuart Andrew |
Gavin Robinson (Belfast East) (DUP) | Sammy Wilson |
Mary Robinson (Cheadle) (Con) | Stuart Andrew |
Matt Rodda (Reading East) (Lab) | Chris Elmore |
Andrew Rosindell (Romford) (Con) | Stuart Andrew |
Douglas Ross (Moray) (Con) | Stuart Andrew |
Lee Rowley (North East Derbyshire) (Con) | Stuart Andrew |
Dean Russell (Watford) (Con) | Stuart Andrew |
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op) | Chris Elmore |
Liz Saville Roberts (Dwyfor Meirionnydd) (PC) | Ben Lake |
Selaine Saxby (North Devon) (Con) | Stuart Andrew |
Paul Scully (Sutton and Cheam) (Con) | Stuart Andrew |
Bob Seely (Isle of Wight) (Con) | Mark Harper |
Andrew Selous (South West Bedfordshire) (Con) | Stuart Andrew |
Naz Shah (Bradford West) (Lab) | Chris Elmore |
Grant Shapps (Welwyn Hatfield) (Con) | Stuart Andrew |
Alok Sharma (Reading West) (Con) | Stuart Andrew |
Mr Virendra Sharma (Ealing, Southall) (Lab) | Chris Elmore |
Mr Barry Sheerman (Huddersfield) (Lab/Co-op) | Chris Elmore |
Alec Shelbrooke (Elmet and Rothwell) (Con) | Stuart Andrew |
Tommy Sheppard (Edinburgh East) (SNP) | Owen Thompson |
Tulip Siddiq (Hampstead and Kilburn) (Lab) | Chris Elmore |
David Simmonds (Ruislip, Northwood and Pinner) (Con) | Stuart Andrew |
Chris Skidmore (Kingswood) (Con) | Stuart Andrew |
Andy Slaughter (Hammersmith) (Lab) | Chris Elmore |
Alyn Smith (Stirling) (SNP) | Owen Thompson |
Cat Smith (Lancaster and Fleetwood) (Lab) | Chris Elmore |
Chloe Smith (Norwich North) (Con) | Stuart Andrew |
Greg Smith (Buckingham) (Con) | Stuart Andrew |
Henry Smith (Crawley) (Con) | Stuart Andrew |
Jeff Smith (Manchester, Withington) (Lab) | Chris Elmore |
Julian Smith (Skipton and Ripon) (Con) | Stuart Andrew |
Nick Smith (Blaenau Gwent) (Lab) | Chris Elmore |
Royston Smith (Southampton, Itchen) (Con) | Stuart Andrew |
Karin Smyth (Bristol South) (Lab) | Chris Elmore |
Alex Sobel (Leeds North West) (Lab) | Chris Elmore |
Amanda Solloway (Derby North) (Con) | Stuart Andrew |
Dr Ben Spencer (Runnymede and Weybridge) (Con) | Stuart Andrew |
Alexander Stafford (Rother Valley) (Con) | Stuart Andrew |
Keir Starmer (Holborn and St Pancras) (Lab) | Chris Elmore |
Chris Stephens (Glasgow South West) (SNP) | Owen Thompson |
Andrew Stephenson (Pendle) (Con) | Stuart Andrew |
Jo Stevens (Cardiff Central) (Lab) | Chris Elmore |
Jane Stevenson (Wolverhampton North East) (Con) | Stuart Andrew |
John Stevenson (Carlisle) (Con) | Stuart Andrew |
Bob Stewart (Beckenham) (Con) | Stuart Andrew |
Iain Stewart (Milton Keynes South) (Con) | Stuart Andrew |
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) | Wendy Chamberlain |
Sir Gary Streeter (South West Devon) (Con) | Stuart Andrew |
Wes Streeting (Ilford North) (Lab) | Chris Elmore |
Mel Stride (Central Devon) (Con) | Stuart Andrew |
Graham Stringer (Blackley and Broughton) (Lab) | Chris Elmore |
Graham Stuart (Beverley and Holderness) (Con) | Stuart Andrew |
Julian Sturdy (York Outer) (Con) | Stuart Andrew |
Zarah Sultana (Coventry South) (Lab) | Bell Ribeiro-Addy |
Rishi Sunak (Richmond (Yorks)) (Con) | Stuart Andrew |
James Sunderland (Bracknell) (Con) | Stuart Andrew |
Sir Desmond Swayne (New Forest West) (Con) | Stuart Andrew |
Sir Robert Syms (Poole) (Con) | Stuart Andrew |
Sam Tarry (Ilford South) (Lab) | Chris Elmore |
Alison Thewliss (Glasgow Central) (SNP) | Owen Thompson |
Derek Thomas (St Ives) (Con) | Stuart Andrew |
Gareth Thomas (Harrow West) (Lab/Co-op) | Chris Elmore |
Nick Thomas-Symonds (Torfaen) (Lab) | Chris Elmore |
Emily Thornberry (Islington South and Finsbury) (Lab) | Chris Elmore |
Stephen Timms (East Ham) (Lab) | Chris Elmore |
Edward Timpson (Eddisbury) (Con) | Stuart Andrew |
Kelly Tolhurst (Rochester and Strood) (Con) | Stuart Andrew |
Justin Tomlinson (North Swindon) (Con) | Stuart Andrew |
Craig Tracey (North Warwickshire) (Con) | Stuart Andrew |
Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con) | Stuart Andrew |
Jon Trickett (Hemsworth) (Lab) | Bell Ribeiro-Addy |
Laura Trott (Sevenoaks) (Con) | Stuart Andrew |
Elizabeth Truss (South West Norfolk) (Con) | Stuart Andrew |
Tom Tugendhat (Tonbridge and Malling) (Con) | Stuart Andrew |
Karl Turner (Kingston upon Hull East) (Lab) | Chris Elmore |
Derek Twigg (Halton) (Lab) | Chris Elmore |
Mr Shailesh Vara (North West Cambridgeshire) (Con) | Stuart Andrew |
Martin Vickers (Cleethorpes) (Con) | Stuart Andrew |
Matt Vickers (Stockton South) (Con) | Stuart Andrew |
Theresa Villiers (Chipping Barnet) (Con) | Stuart Andrew |
Christian Wakeford (Bury South) (Con) | Stuart Andrew |
Mr Robin Walker (Worcester) (Con) | Stuart Andrew |
Mr Ben Wallace (Wyre and Preston North) | Stuart Andrew |
Dr Jamie Wallis (Bridgend) (Con) | Stuart Andrew |
David Warburton (Somerset and Frome) (Con) | Stuart Andrew |
Matt Warman (Boston and Skegness) (Con) | Stuart Andrew |
Giles Watling (Clacton) (Con) | Stuart Andrew |
Suzanne Webb (Stourbridge) (Con) | Stuart Andrew |
Claudia Webbe (Leicester East) (Ind) | Bell Ribeiro-Addy |
Catherine West (Hornsey and Wood Green) (Lab) | Chris Elmore |
Matt Western (Warwick and Leamington) (Lab) | Chris Elmore |
Helen Whately (Faversham and Mid Kent) (Con) | Stuart Andrew |
Mrs Heather Wheeler (South Derbyshire) (Con) | Stuart Andrew |
Dr Alan Whitehead (Southampton, Test) (Lab) | Chris Elmore |
Dr Philippa Whitford (Central Ayrshire) (SNP) | Owen Thompson |
Mick Whitley (Birkenhead) (Lab) | Chris Elmore |
Craig Whittaker (Calder Valley) (Con) | Stuart Andrew |
John Whittingdale (Malden) (Con) | Stuart Andrew |
Nadia Whittome (Nottingham East) (Lab) | Chris Elmore |
Bill Wiggin (North Herefordshire) (Con) | Stuart Andrew |
James Wild (North West Norfolk) (Con) | Stuart Andrew |
Craig Williams (Montgomeryshire) (Con) | Stuart Andrew |
Hywel Williams (Arfon) PC) | Ben Lake |
Gavin Williamson (Montgomeryshire) (Con) | Stuart Andrew |
Munira Wilson (Twickenham) (LD) | Wendy Chamberlain |
Beth Winter (Cynon Valley) (Lab) | Bell Ribeiro-Addy |
Pete Wishart (Perth and North Perthshire) (SNP) | Owen Thompson |
Mike Wood (Dudley South) (Con) | Stuart Andrew |
Jeremy Wright (Kenilworth and Southam) (Con) | Stuart Andrew |
Mohammad Yasin (Bedford) (Lab) | Chris Elmore |
Jacob Young (Redcar) (Con) | Stuart Andrew |
Nadhim Zahawi (Stratford-on-Avon) (Con) | Stuart Andrew |
Daniel Zeichner (Cambridge) (Lab) | Chris Elmore |
Financial Assistance to Industry
(3 years, 6 months ago)
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The Chair
I remind Members to observe social distancing and to sit only in places that are clearly marked. I remind them also that Mr Speaker has stated that masks should be worn in Committee, other than when speaking. Hansard colleagues would be most grateful if Members sent their speaking notes to hansardnotes@ parliament.uk.
The Parliamentary Under-Secretary of State for Transport (Robert Courts)
I beg to move,
That the Committee has considered the motion, That this House authorises the Secretary of State to undertake to pay, and to pay by way of financial assistance under section 8 of the Industrial Development Act 1982, sums exceeding £30 million with an estimated total sum of £44 million, to be made available, through the renewed Airport and Ground Operations Support Scheme announced in the 2021 Budget, to eligible commercial airports and ground operators to compensate for the damage caused by COVID-19, on the basis of business rates liabilities or COVID-19 losses—whichever is lower—from April-September 2021, subject to certain conditions and a cap of £4 million per eligible company.
It is a great pleasure to serve under your chairmanship this afternoon, Mr Robertson. With your leave, before I speak to the motion, I will say a word or two about the situation in Belarus.
Belarus’ reported actions represent a danger to civilian flights everywhere. The whole international community has an interest in ensuring that civilian aircraft can fly safely and unmolested. That is why we are calling for the Council of the International Civil Aviation Organisation to look into the matter urgently. In the meantime, my right hon. Friend the Secretary of State for Transport is taking the following actions: we will be issuing an advisory notice to strongly advise all UK airlines to cease overflights of Belarusian airspace, and we are suspending Belarusian airline Belavia’s operating permit, with immediate effect; furthermore, the Civil Aviation Authority will be instructed not to issue any further ad hoc permits to Belarusian carriers. I am sure all hon. Members agree that those immediate and decisive measures are necessary to protect both the right to freedom of expression and the safety of international travel.
The motion before the Committee comes during one of the most challenging periods faced by this country. The covid-19 pandemic has affected every aspect of our nation, and the Government have put in place an unprecedented package of measures to support the economy. The Government recognise the challenging circumstances facing the aviation industry, which continues to operate with demand significantly below pre-pandemic levels. In total, we estimate that by the end of September 2021, the air transport sector will have benefited from about £7 billion of Government support since the start of the pandemic. That includes support through loan guarantees, support for exporters, the Bank of England’s covid corporate financing facility and the coronavirus job retention scheme.
The Government recognise the importance of protecting aviation infrastructure in the short term, to continue the operation of vital services that we rely on for passengers and freight, and of avoiding any longer term retrenchment of the sector but preserving capacity and connectivity, so that as recovery gains pace we are able to build back better. That is why in November I announced the introduction of the airport and ground operations support scheme to support eligible businesses and limit the harm caused by covid-19 losses.
The scheme was designed by the Department for Transport under pressure of circumstances and limited time. It was opened at the end of January for three weeks, with payments made to successful applicants by April. Over the winter, it became clear that the situation remained challenging. Despite the recent opening of international travel, on 17 May, measures remain in place at the border to protect public health. It is therefore right that we continue to support the sectors hardest hit by covid-19. That is why the Chancellor announced the renewal of the AGOSS in the Budget.
The renewed scheme continues to provide support to eligible airports and ground handler companies up to the equivalent of their business rates liabilities or covid-19 losses, whichever is lower, from April to September 2021, subject to certain conditions and a cap per claim of £4 million. To provide financial assistance to the sector, the Government intend to use powers contained in section 8 of the Industrial Development Act 1982. Under the Act, Parliament’s consent to the use of the powers is required where a project will exceed £30 million. Given the need to continue to protect our vital aviation infrastructure and support the recovery, I ask the Committee to support the motion.
Mike Kane (Wythenshawe and Sale East) (Lab)
It is a pleasure to serve under your chairmanship today, Mr Robertson. I congratulate you on your football team, Bolton Wanders, gaining promotion to league one. The Trotters have an astonishing history of football in the north-west. As a Manchester City fan, having watched them lift the premier league title yesterday and having worked for the club in the 1990s on a zero-hours contract—the lowest paid, highest status job I ever had; my job now is well paid, but I leave hon. Members to decide the status of the work we do—I can say that there is hope for all clubs in the future. That is why the proposed superleague was such a bad idea.
I wholeheartedly concur with the Minister’s comments about Belarus. The news yesterday of a Ryanair flight being diverted from its course to land in Minsk by the Belarusian Government is very troubling. We rely on free and open skies for our aviation markets to work. I join the Minister in condemning this act and support the strong response that the British Government have just announced—suspending Belavia’s licence to operate and avoiding Belarusian airspace. It is the best we can do in a limited period, and I am sure there is more we and the international community can do to stop what Ryanair called “state-sponsored hijacking” in the sky.
I welcome the extension of the AGOSS for a further six months. The scheme provided up to £8 million in rates relief to airports and ground operators last year, and it will offer £4 million in the first half of this year. While the scheme is indeed welcome, financial support for the aviation sector is something Labour has been demanding for over a year. The Minister laid out certain measures the Government have taken, but did not provide the context of what has been happening. The money provided under the motion will not cover even the rates bill for our largest airports. Manchester Airport, which is in my constituency, is losing tens of millions of pounds every month, even with the bare minimum of operating costs and while running a skeleton staff. The £4 million relief this year barely touches the sides.
Realistically, with our domestic vaccination programme extending into the autumn and with very few overseas destinations on the green list, aviation will be grounded for much of the rest of the year. It is great to see confidence coming back in the past few weeks, particularly about Portugal, but it remains a worrying time for the industry. Without further financial support, the chances of failures in the sector are becoming very real. The UK has the third largest aviation sector in the world, but we are now at risk of falling behind other countries, which are supporting their aviation sectors fully. For example, France has bailed out Air France-KLM, and the US has offered tens of billions of dollars to its sector.
The UK Government have halted all covid-related appeals of business rates and said they will introduce a new rates relief fund to provide support for businesses that need it, but they have yet to set out any details of how the new fund will work. Retrospectively changing tax laws has created huge financial uncertainty. The Government need to confirm the terms of their rates relief fund as soon as possible. I know the Minister shares my passion for our aviation industry. I hope he will work with colleagues in government and ensure that the sector gets the vital support it needs, so that it gets back in the air as soon as possible.
Finally, let me take this opportunity to say that, without our staff, parliamentarians are nothing. I lost a member of staff, who retired at the age of 67, a matter of weeks ago, and now, after four years with me, my parliamentary assistant Steve Kay, who writes these fantastic speeches to hold the Government to account, is off for a bigger and better job in the private sector. I wanted to put on the record my thanks to him for all his hard work to keep Government and Opposition functioning, and particularly to keep the Government on their toes.
Robert Courts
I am grateful to the hon. Member for his comments, particularly on the Belarusian situation and the Ryanair flight. I echo his comments about our parliamentary staff—I would echo his tribute to my own staff. It is a perhaps under-recognised aspect of this place that there are people working very hard for very little recognition, helping constituents, supporting constituency MPs and holding the Government to account, day in, day out. They make this place tick and they make our democracy work. The hon. Member is quite right to pay tribute to his long-serving staff, and I do so as well on behalf of all Members.
I share the hon. Member’s passion for the aviation sector and I agree with every comment he made about the importance of the sector. I am determined to see it get back in the air and fighting fit as we build back better after the pandemic. I entirely understand the challenges facing the aviation sector, which is why I hope the Committee will support the measures in the motion today. The hon. Member suggested several areas where we could to further. I am grateful to him for raising those points and will continue to work him and others in all parts of the House and in the sector as we consider what measures we can take. I believe the measures set out in the motion strike an appropriate balance between supporting airports and ground handlers and protecting the interests of the taxpayer.
The hon. Member mentioned the rates relief fund. I confirm that work is ongoing between Her Majesty’s Treasury and the Ministry of Housing, Communities and Local Government to lay out the terms of the scheme. I cannot give any more precise details today, but I understand that as soon as further details can be provided, they will be.
I am grateful for the hon. Member’s comments and questions. As we start to relax the restrictions and to rebuild after covid-19, the picture is encouraging. Of course, we have to note that the recovery is cautious and remains under constant review. Despite the efforts to drive down the incidence of covid-19 and the success of the vaccination programme, the aviation sector remains sensitive to the recovery here and elsewhere, and demand is of course still down on pre-pandemic levels. It is right that we continue to support our commercial airports and ground handlers, preserving and protecting jobs and safeguarding vital infrastructure.
Question put and agreed to.
Financial Assistance to Industry
(3 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I beg to move,
That the Committee has considered the motion, That this House authorises the Secretary of State to undertake to pay, and to pay by way of financial assistance under section 8 of the Industrial Development Act 1982, compensation to Business Schools in respect of a proportion of the indirect costs of funding the Help to Grow Management programme up to a limit of £220 million over three years.
It is a pleasure to serve under your chairmanship, Mr Gray.
The UK has a long-standing productivity challenge. We are home to some of the world’s most innovative firms, but we also have a long tail of less productive firms compared with other G7 countries. In 2017, the Office for National Statistics estimated that labour productivity was on average 18% higher in the other six members of the G7. To put that in context, increasing the productivity of UK small and medium-sized enterprises to match that of those of Germany could add up to £100 billion per annum to the economy. There is strong evidence that the adoption of formal management practices and of technology are key drivers of firm-level productivity.
The new Help to Grow Management programme announced at the Budget will tackle those issues head on by supporting 30,000 small and medium-sized businesses across the UK to learn new skills, reach new customers, and boost their productivity and international competitiveness. The Help to Grow Management programme is a new mini MBA-style programme that is aimed at senior executives. Launching in June, it aims to support 30,000 SME business leaders over the next three years. The 12-week course, which will be delivered by the UK’s leading business schools, is designed to be manageable alongside full-time work. It will combine a practical curriculum with one-to-one mentoring from a business expert, peer learning sessions that give businesses the opportunity to learn from one another and ongoing support from an alumni community.
By the end of the programme, participants will develop a tailored business plan to lead their business to its full potential. Around 9,000 businesses have already expressed an interest in participating in the programme. Businesses can register their interest at www.gov.uk/helptogrow. Applications have already opened for the first cohort, beginning at the end of June, and businesses and social enterprises from across all sectors are welcome to apply. The programme is open to senior leaders and directors of businesses with between five and 249 employees that have been trading for over a year.
The programme will be delivered by leading small businesses, and business and enterprise experts from the UK’s leading business schools, with the support of leading figures from industry and experienced entrepreneurs. Participating business schools will have been accredited by Small Business Charter, an award that recognises high-quality, tailored guidance to support small businesses and their local economies. That approach brings a huge amount of expertise and experience to the scheme to ensure its success. There are currently 33 business schools with SBC accreditation, and a further 33 schools are expected to seek accreditation.
We recognise the challenge of reaching 30,000 SMEs over three years. I am pleased that we have the support of many business organisations, including the CBI and the Institute of Directors, which will help us to reach their members.
The programme has been developed with the support of an expert advisory council of senior business leaders who are helping to shape the approach and to design the curriculum. They will act as advocates of the programme. The council includes the CBI president, Lord Karan Bilimoria, the NatWest CEO, Alison Rose, and the managing director of Goldman Sachs, Charlotte Keenan. The council provides expert insight to ensure that the programme is practical and relevant to the needs of small businesses.
Help to Grow Management is an ambitious programme. We are confident that it will provide significant benefits to small and medium-sized businesses, helping them to seize every opportunity to grow. The initiative is an important component of the Government’s plan for jobs that will promote opportunity, boost employment and help to level up the economy as businesses recover from the economic impacts of the pandemic. The Government have worked at pace to provide an unprecedented and comprehensive package of support to help as many individuals and businesses as possible. During this challenging period, we have provided access to over £74 billion through the coronavirus loan schemes. I commend the motion to the Committee.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Gray. I thank the Minister for his opening remarks, in which he rightly laid out the context of the UK’s productivity challenge, a matter that I understand well. Indeed, I had intended to set up the first all-party parliamentary group on increasing productivity—I think it did get launched. The subject is a very important part of our parliamentary debate.
The Minister set out what we are debating: a motion to approve £220 million of financial assistance to business schools to help to fund the Help to Grow Management programme that was announced in the Budget on 3 March. As he said, the intention of the programme is to give 30,000 SMEs access to a mini MBA-style executive education for their senior management over the next three years.
SMEs are indeed the backbone of our economy. The almost 6 million SMEs in Britain are engines of growth and it is right to invest in the strategic management skills of SME leaders. We need to grow our way into the future and, as the CBI points out today, to seize this moment to create a more inclusive economy, so any support for innovation, productivity and the growth of SMEs—each of our constituencies will contain SMEs—is welcome. I hope that all our SMEs will take advantage of the programme.
We therefore support the funding to help our SMEs across the country to grow, but I and well-respected stakeholders in senior positions in academia and business have concerns about some of the Government’s decisions. We want the programme to be successful and to deliver on its aims of supporting productivity and growth, while providing value for money for the taxpayer and small business leaders. It is in that context that I would be grateful for the Minister’s response to the questions I shall raise, and for ongoing evaluation and feedback so that we can ensure that the programme delivers with its outcomes.
I would be grateful for two points of clarification. Section 8 of the Industrial Development Act 1982 provides the Government with the general power to provide selective or targeted financial assistance, for example to specific firms or institutions, when they determine that such assistance is likely to benefit the economy of the UK or any part or area of it. Subsection (8) provides that sums to be paid in respect of any one project shall not exceed £30 million except when authorised by a resolution of the House of Commons, hence today’s proceedings to make available £220 million over three years to fund the Help to Grow Management scheme.
Sections 11 and 15 of the 1982 Act require the publication of an annual report describing the exercise of powers under the Act, which suggests that details will be available at the end of 2021-22, and in subsequent years, on how much of the allocated £220 million has been spent on the programme. However, section 75 of the Coronavirus Act 2020, which grants emergency powers to handle the covid-19 pandemic, amends the 1982 Act to disapply the overall limits that it sets for the total financial assistance that the Government can provide when the funding is “coronavirus-related”. It also creates a quarterly reporting obligation on the Government in relation to coronavirus-related funding. Will the Minister clarify whether the £220 million allocated to the Help to Grow Management scheme is “coronavirus-related” within the meaning of the Coronavirus Act 2020?
Secondly, the overall Help to Grow scheme has been allocated £520 million, with the second programme being Help to Grow Digital. Today’s motion relates only to Help to Grow Management, so will the Minister confirm whether he will seek approval under a separate resolution for the Help to Grow Digital scheme in advance of its launch in the autumn?
Labour believes strongly that small businesses should be at the heart of the recovery from covid. We are concerned by the drop in new start-ups, which are down 11% since 2016. I grew up above a shop in a local business in Osterley, and every year across the country we celebrate small business Saturday. In April, Labour promised £1 billion of funding to support the creation of 100,000 start-ups across the country in the first term of a Labour Administration. We do not want this programme to go the way of the Government’s green homes scheme which, despite significant demand among the public, had a lack of take-up due to its bad design. Supporting our SMEs to survive and thrive as we exit lockdown and move into a post-pandemic, post-Brexit economy means planning ahead and thinking through policy to get it right first time. We need this programme to be effective, and to be designed with usability and SMEs’ needs as the first priorities.
I would be grateful for the Minister’s response to a number of questions about design, accessibility and scale, and value for money. First, on take-up, businesses were able to register their interest as of 3 March 2021. Over two months on, will the Minister provide an update on how many businesses have done so? What forecasts or estimates do the Government have regarding how many businesses are expected to apply, and by when?
In the current climate, is the Department confident that business leaders will be able to give up the time needed to be successful on a 12-week programme? Was any consideration given to a pyramid of programmes, which some business leaders have raised with me? The programme could be a significant part of such a structure to allow for greater accessibility and targeted support for SMEs that might not have that amount of time. What measures are being applied to ensure that businesses that are under-represented by sector, or indeed female-led, ethnic minority-led, or disabled people-led businesses, are accessing the programme?
Secondly, on the curriculum and diversity of need, how will the curriculum for the programme be developed? Is that in progress and in what timeframe will it happen? Will the curriculum be standardised across the 33 business schools? On 19 May, the Business Secretary announced the expert advisory council for the programme. What role will that council play in setting the curriculum for the programme, given that the first cohort will begin in June 2021—I believe that the Minister mentioned that date—at certain business schools, including Aston University, where I undertook a masters myself?
Some business schools have raised with me the question of whether there is any room to customise part of their course to take account of local circumstances. There is concern that a one-size-fits-all approach will not meet a diversity of need on the basis of place or sector. Will the Minister also confirm whether any support to non-university-led programmes is being considered for organisations that work closely to help small businesses on the ground?
Thirdly, I want to raise the issue of exclusions, which covers charities and micro-businesses? Why are charities not eligible? I am sure that the Minister supports the view that innovation and business management are vital in the voluntary sector, too. Classes at business schools often comprise people from not only the private sector, but the public and voluntary sectors. Clearly charities would benefit from such a scheme. This point is particularly important because charities have experienced a severe capital shortage throughout the pandemic. Will the Government explain whether equivalent support is being offered to the leaders of small charities?
What is the policy basis for the exclusion of businesses with one to four employees? Much research suggests that moving from one to two employees can be one of the biggest hurdles that a business faces, but once that happens, it can lead to an acceleration of a business’s growth and the likelihood that it survives.
I would be grateful if the Minister would clarify the process by which the Small Business Charter, which does good work, was determined as the gatekeeper for the programme. There are schools outside the 33 charter members that are leading business schools for SME growth and support. Is the Minister suggesting—perhaps he was alluding to this in his speech—that they will need to seek accreditation in order to participate? I would be grateful if he would cover that point.
How is the £220 million to be allocated across schools? Will that be done on a pro-rata basis? Labour’s analysis of the start-up loan scheme shows that nearly £1 in every £4 has gone to London, while the north-east has seen just £1 in every £20. How will the Government ensure a fairer distribution of funding across every region and nation of the country?
How will the Government advertise the programme? The Minister mentioned the CBI and the Federation of Small Businesses in his opening remarks, but the advertising will need to reach those who need the programme the most. Social media is not enough. Will he use existing local infrastructure, including local chambers of commerce, post offices, community centres and bank managers, for example, to help promote the programme?
Can the Minister outline how the impact of the programme will be measured? Will the Government monitor and report on the growth and improvements in productivity and innovation from participating businesses? Will there be a longer term evaluation in order to see that impact? In the Business, Energy and Industrial Strategy Committee’s evidence session on 18 May, he struggled to articulate how sharing prosperity, or levelling up, will be measured. There are great risks of such programmes not succeeding unless there is a built-in, fast-cycle evaluation, with opportunities to learn and to tweak design. Is an interim evaluation planned, and if so, how will it be carried out? Will the results be reported to the House?
On value for money, the cost of the programme appears to be at the higher end for executive courses of this type. It is priced at £7,500 per place, which appears, from what is available publicly, to be for about 50 hours of tuition—so about seven days—with other study alongside. Can the Minister explain how that was costed, and what benchmarking and value-for-money criteria were applied? I have had a lot of contact with business schools over many years, including through my own MBA, but some figures that I was sent today appear to suggest that the cost per tuition hour of this proposed programme is considerably higher than that of the prestigious executive education courses run by some of the best business schools. We want to have the maximum impact and the best use of resources to support the SME sector across the country, so I would be grateful if he shared with the Committee the costing and the value-for-money exercise undertaken. If he cannot do so today, perhaps he could write to me with that information.
Finally, on creating an environment for success, this programme is being introduced in the context of short-term existential threats to thousands of SMEs. Although the funding is extremely welcome, the Budget that announced the programme did not contain long-term solutions for the debt crisis that, as the Minister will be aware, thousands of businesses across the country face. Innovation is important, but many firms are also fighting for their short-term survival. For example, what is the Government’s answer to the £7.5 billion of commercial rent arrears that the British Property Federation estimates will have accumulated by 30 June 2021? The Night Time Industries Association has warned that 75% of commercial tenants in the UK’s night time sector face the prospect of insolvency in the near future without a solution. I will be grateful for the Minister’s response.
Paul Scully
I welcome the hon. Lady to her place. I know that there will be plenty of opportunities for she and I to discuss this and many other issues in the time to come. I also send my best regards to her predecessor, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), with whom I had fruitful debates, often in this very room. The hon. Lady and I will get to know each other and Committee Room 10 quite well in the coming months.
This is not considered to be a coronavirus-related measure. It looks at the wider aspect of productivity under the Act. I hope that answers the hon. Lady’s question in that regard. The course is 32 hours of formal training, to be delivered over three months, accompanied by peer learning and one-to-one mentoring, and participants will also be able to join an alumni community. I therefore believe that the course offers value for money for the recipient, who will be asked to pay 10%—£750—as a joining fee. Equivalent executive education programmes can cost up to £10,000 per participant.
Seema Malhotra
The 32 hours has been published in the description of the programme, but there are also other taught hours, perhaps for case studies. I was just trying to understand what the full expectation would be of tuition hours—where an academic or speaker will be involved in delivering some of that tuition, whether in groups or lectures. Secondly, to clarify, I understand that the Minister is saying that the course offers value for money, but an exercise must have been carried out to come to the costing of £7,500. If he does not have that information, I would be grateful if he could write to me with it. It is quite significant in terms of ensuring that we are delivering value for money for the taxpayer, as well as value for the small businesses that need the support.
Paul Scully
Indeed, and if there is anything that I do not cover today, I am happy to follow up on it. As I say, we have worked with business schools across the country; 33 are accredited at the moment and another 33 are seeking accreditation. By the end of that, we will have quite an extensive list—well beyond the existing cohort—that will be able to provide coverage across the country.
Seema Malhotra
I am grateful for the Minister’s generosity in giving way. A number of business schools contacted me because they were not clear about this. Is the expectation that other business schools may be able to participate in the programme if they feel that they have either the resources or the opportunity to do so? That might be in parts of the country where there do not seem to be as many courses advertised at the moment, because I have been looking at the regional advertising of what is available. Will it be the case that other business schools could participate, but they would have to become accredited to do so?
Paul Scully
I can give the hon. Lady an absolute yes. We are encouraging more business schools to apply to the Chartered Association of Business Schools for accreditation to the SBC, and CABS will seek to complete that accreditation process within two months. As soon as schools gain accreditation, they will be able to deliver the programme. We want to ensure that there is a clear framework. I know that there are plenty of excellent business schools up and down the country, but we want to ensure that we can work within that framework to achieve the value for money that the hon. Lady rightly asks about, and to ensure that we have a consistent approach across the country.
The best description that I have heard of levelling up is that potential is equally distributed across the country, but opportunity is not, so we need to try to tackle that. Similarly, on business advice, we said in our manifesto, which we are trying to deliver, that the UK should be the best place to start, grow and scale a business, but we want to go further. I have seen this myself with my own business, and certainly in the last year working up and down the country. I want to ensure that we have a degree of consistency so that no matter where someone is in the UK, that should be the best place to start, grow and scale a business. That involves access to finance, mentoring, peer-to-peer networking and infrastructure, and this programme plays a major role within that.
The hon. Lady raised a really good point about not only geographical differences, but differences among the people whom the approach might benefit. We are working through our communications plan to ensure that we can get this out. We are converting registrations of interest into actual places and, similarly, making more registrations of interest available. What I am more interested in is the kind of businesses that we can speak to. Exactly as she said, it is female entrepreneurs, ethnic minority-led businesses and young people, whom I speak about and listen to on a regular basis.
The themes tend to be the same regarding what the barriers are for those businesses, but the answers are very different. With a tailored programme of work such as this, we can start to tackle that. However, we need to make sure that we do not go solely through the same people—the CBIs and the Institutes of Directors. Someone with an informal network will not necessarily be aware of those institutions or feel that they can engage clearly with them. What more can we do? I am always keen to hear more about how to reach those groups.
When we were handing out the first grants for retail, hospitality and leisure small businesses in the early stages of the pandemic—it was seemingly one of the easiest areas of support, because we knew exactly who qualified—we were still struggling with the relationship between the local authority and those businesses, because we did not have bank account details. Why? The businesses did not have a close transactional relationship with their local authority, so we had to do quite a lot of outreach through accountants, intermediaries and the local media in order to access the people who were running businesses based, as I say, on their informal networks. I am really keen to see what more we can do to drill down, because they are the people for whom this scheme will have the biggest effect.
The hon. Lady rightly talks about how we measure this. Frankly, there is little point in our subsidising someone who would pay the full £10,000 to go on a course over someone who perhaps could not afford it, would not be aware of it or would not think it was for them, although it actually would be very much for them. We ask for £750 because, frankly, if someone has a stake a scheme, they tend to get more out of it in the first place. I am really keen that we do more about finding those hard-to-reach people, and we will direct the funding more at places where productivity is lowest geographically. That is really important in the work that we are doing.
Seema Malhotra
I am grateful to the Minister for explaining that that is indeed a priority for the Government. It is important for the House to be kept updated, because we want this to be successful. If places are not being reached, it will show in the numbers of those registering interest and the regions in which people are registering interest. I hope the Minister will keep the House updated on the numbers, including by region.
May I probe the Minister on one point? He rightly talked about consistency, and I have a great deal of sympathy with the idea that we want to make sure that the programme has the same quality, standard and consistency across the country, but will he respond to my point about whether a proportion of the curriculum could be more tailored? For example, it is English Tourism Week. We know that the tourism sector has been very hard hit—
Seema Malhotra
I would be grateful if the Minister could consider whether that could be part of the way in which the programme is refined.
Paul Scully
The programme is sector-agnostic, but the peer networking within it means that there can be a certain degree of tailoring towards a particular business leader’s business or sector. Clearly, the alumni aspect, as it develops and expands, will be really productive. I know from courses that I have done in the past—in politics and in the business world—that such learning is often the most beneficial to business leaders.
The hon. Lady asked about charities. Unfortunately, the programme is not available to charities. It is a business-led programme, based on business productivity, but social enterprises clearly are well within the remit, so we want to make sure that we can deliver on that.
Seema Malhotra
I also asked why the programme is not available to charities, which I do not think the Minister has fully answered. If that is the case, what is the alternative? Leadership, management and innovation capability within the charity sector is also extremely important as such organisations play an enormous role in our local economies and are great employers.
Paul Scully
Charities are indeed great employers. Many of them do fantastic work, and there are always interesting things that we can do to support charities. This scheme answers a particular question. It is an outcome-driven thing: how do we increase productivity? It is especially aimed at businesses and social enterprises that have that sort of outlook, and that is the outcome that we are after. The hon. Lady asked how we will measure that, which is a really important point. On all of the productivity measurements that we already do, we want to make sure that we can see a company’s turnover and the prospects improving. The measurements that we want to make will be covered.
We need to drill down further into how we measure overall outcome, and therefore how we report it. The hon. Lady will undoubtedly ask questions, and rightly so. The easiest thing in the world would be to just give this to a young hotshot whose business is expanding anyway. We want to make sure that we can find the hard-to-reach people and increase their productivity, because that will be of use to the levelling-up agenda, and productivity will help the prosperity of communities as well as businesses. Businesses can be a force for good for not just UK plc, but communities, cities and towns.
The hon. Lady asked about the curriculum. As I have said, the curriculum has been run through business support specialists, including existing courses such as the Goldman Sachs 10,000 and formal learning at business schools, as well as other organisations that run their own schemes. We want to make sure that we learn from the best and get the best in. That means not only doing these informal comms, but working through banks, accountants and intermediaries. Every business has an accounts package such as Sage, Intuit and Xero. Small businesses know that they can work through these areas, and I am keen to make sure that we work with them to get to the harder-to-reach businesses, because we continue to be a champion of the needs of business and industry. That is why we have published “Build Back Better: our plan for growth”.
The supporting strategies will put the UK at the forefront of opportunities and give businesses the confidence to invest, boosting productivity across the UK and enabling our green industrial revolution, which is so important. “Build Back Better” can mean a wide number of things to a wide number of people. Building back better will not only increase productivity, but will build back fairer so that people working in such organisations can feel that they have productive jobs and careers.
Seema Malhotra
The Minister is right about building back better, fairer and greener. We need to make sure that businesses are supported in the growth sectors that might be coming, particularly around the decarbonisation of our economy. I hope that there will be a connection, when future growth is planned within the industrial strategy, to help to support businesses to take advantage of some of those opportunities, too.
I am aware of the Goldman Sachs programme. Indeed, that has seen considerable success. There will be other initiatives that are important to learn from regarding how grassroots businesses have been supported to grow. Have the Government learned from other programmes in the development of the scheme and its curriculum?
Paul Scully
I used that as an example, but we have been working with business schools and the schemes that I have dealt with over the last year. In my 14 months as a Minister, I have spoken to about 5,000 or 6,000 businesses. A lot of those have gone through various schemes such Goldman Sachs’s, and also Be the Business, which is a Government-sponsored organisation doing fantastic work up and down the country. We will continue to work and learn from them, but we do not want to replace what is already there. We want something that is additional, that adds value and a degree of consistency, and that allows Britain to be proud, and to be the best place to start to grow and scale up a business that will attract investment, increase productivity for the UK and help us to build back better. I commend the motion to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the motion, That this House authorises the Secretary of State to undertake to pay, and to pay by way of financial assistance under section 8 of the Industrial Development Act 1982, compensation to Business Schools in respect of a proportion of the indirect costs of funding the Help to Grow Management Programme up to a limit of £220 million over three years.
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Child Food Poverty
(3 years, 6 months ago)
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Mr Peter Bone (in the Chair)
I remind hon. Members that there have been some changes to normal practice in order to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for the next debate. There will also be suspensions between debates. I remind Members participating physically and virtually that they must arrive for the start of debates in Westminster Hall. Members are expected to remain for the entire debate.
I must also remind Members participating virtually that they are visible at all times, both to each other and to us in the Boothroyd Room. If Members attending virtually have any technical problems, they should email the Westminster Hall Clerks’ email address, which is westminsterhallclerks@parliament.uk. Members attending physically should clean their spaces before they use them and as they leave the room. I also remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall.
Catherine McKinnell (Newcastle upon Tyne North) (Lab) [V]
I beg to move,
That this House has considered e-petition 554276, relating to child food poverty.
I had hoped to be present in Parliament to open the debate. However, there has unfortunately been severe disruption on the east coast main line between Newcastle and London, caused by cows on the line. I am grateful to House staff for facilitating my virtual contribution to this incredibly important debate.
Child food poverty has become an issue of huge public interest during the covid-19 pandemic, as is shown by the fact that 1.1 million people have signed this high-profile petition started by Marcus Rashford. I commend Marcus for his campaigning on the issue. He has used his immense platform and personal experience to bring this long-overlooked issue to the forefront of people’s minds, uniting fans of football and others behind his call today.
The terms “child food poverty” and “food insecurity” are used quite frequently now, so I will start by setting out exactly what we mean when we use those phrases; I think it might come as a shock to some people. A standard way to determine food insecurity, and one that is used by the UK Food Standards Agency and in many other countries, is to ask people three straightforward questions: have you had to skip meals because of a lack of money or not being able to access the food that you need? Have you gone hungry and not eaten for those same reasons? Have you gone for a day without eating for those same reasons?
The executive director of the Food Foundation told us in a survey from September that 14% of households with children fell into the moderate or the severe category following their responses to those questions. That is around 2.3 million children right here in the UK. Child food poverty is not about families who rely on low-cost ready meals or who lack access to healthy food; it is about children who are forced to skip meals and go hungry because their parents or carers cannot afford to feed them.
It is a shocking reality that we live in a country where there is no shortage of food—only a shortage of money to pay for it. That is an incredibly serious issue. Although the unprecedented circumstances of the last 14 months have certainly made things worse and put a spotlight on childhood poverty as never before, the problem was with us before any of us had ever heard of covid-19. Sadly, I fear it will be with us long after we come out of lockdown.
The petition has three key asks of Government: provide meals and activities during all school holidays, expand free school meals to all under-16s when a parent or guardian is in receipt of universal credit or an equivalent benefit, and increase the value of healthy start vouchers to at least £4.25 a week, which has already happened, and expand the scheme.
The decision to provide £221 million of funding for the holiday activities and food programme during Easter, summer and Christmas 2021 was very welcome, though it must be said that it took heavy cajoling from Marcus Rashford and from campaigners and colleagues in the House to make that happen. It is still not clear, however, whether the Government expect to make that funding a long-term commitment beyond 2021. Will the Minister confirm that today?
Until this year, local authorities had to engage in competitive bidding for a £9 million pot for holiday activities and food funding, which covered only around 50,000 children in England. That gave no certainty to low-income families, and there can be no going back to it. Also, the Government have not directly responded to the petitioners’ request to expand the eligibility criteria for free school meals and healthy start vouchers. I am happy to be corrected by the Minister, but it seems clear to me that there are currently no plans to do that.
During our evidence session with Marcus Rashford, he explained that from his own experience
“it’s impossible to learn and to develop”
in a school environment “if you’re hungry” and do not have the right foods. He emphasised that food is important not just for effective learning, but for removing the anxiety of not knowing where your next meal is coming from. We also heard that up to 1.2 million children could be living in poverty but not be eligible for free school meals, so they are forced to rely on poor-quality food or go hungry. The Trussell Trust told us that during the year before the pandemic hit, it distributed 1.9 million food parcels.
We also heard that people with illnesses and disabilities are massively over-represented at food banks because the benefits system is not catching them. Will the Minister explain why the Government are not looking at expanding the free school meal eligibility criteria, as the petitioners ask, given all the evidence of the families who face food insecurity and who are forced to rely on food banks, but are missed by the current criteria?
Specifically on healthy start, the Government increased the value of the vouchers from £3.10 a week to £4.25 from April, meeting a key ask of the petitioners, which is welcome, but there are real concerns about trends in uptake. National statistics are not available, but figures provided in response to a written parliamentary question that I tabled show that uptake has declined in every north-east local authority over the last four years, even as child poverty has been increasing in every one of them. In the year before the pandemic, uptake fell by more than 15% in Newcastle. The Government plan to replace the physical vouchers with a digitised version, so what assurances can the Minister give that the lowest-income parents will be able to access digital vouchers?
One of the issues with uptake is that local authorities are charged with identifying and promoting the vouchers to local families, but owing to the roll-out of universal credit they no longer have access to all the data that they once had, and I understand the Department for Work and Pensions will not share the universal credit data. The chief executive of Tower Hamlets recently gave evidence to the Work and Pensions Committee and suggested that the DWP should use universal credit data automatically to passport families they know are eligible for healthy start vouchers, but that is not happening at the moment, perhaps because the vouchers are the responsibility of the Department of Health and Social Care. It seems ludicrous that such bureaucracy is preventing children from accessing healthy food, so will the Minister commit herself to raising the matter with colleagues and getting it sorted?
That brings me to a broader theme that is seriously hampering efforts to get to grips with the issue—the lack of clarity on who exactly is responsible for the Government’s policy on child poverty. We are grateful that the Minister will respond to the debate, but she is at the Department for Education. How does that fit with the Work and Pensions Secretary’s recent letter to the Petitions Committee in which she said that the DWP is co-ordinating the
“cross-Government approach to tackling poverty”?
How does that co-ordination work in practice? What process do Departments go through to review the role and effectiveness of targeted measures such as free school meals that fall within the remit of another Department?
The Government have, with some cajoling, implemented several welcome, temporary measures to support the families struggling with the cost of food. It should not have taken that level of campaigning and pressure to shame the Government into action, but I think we would all agree that normalising emergency food aid as the primary way to deal with the effects of child poverty is not something we should aspire to as a country. That is stigmatising and it is not sustainable.
What Marcus Rashford and the 1.1 million people who signed his petition want is a long-term plan to support families facing food poverty, over and above those temporary measures, because parts of our country were facing a growing child poverty crisis before we had ever heard of covid-19.
It is not enough for Ministers to refer vaguely to a levelling-up agenda whenever child poverty is brought up. It lacks definition and, as far as I can tell, it has no metrics by which we can track performance. We hear a lot about getting parents into work as a solution, but most parents of children living in poverty are already in work.
Marcus Rashford said he started the petition to “give families hope” and so that they could see that “the Government are listening”. So, I ask the Minister, are the Government listening? There is no shortage of food in this country, but for far too many there is a shortage of money to buy it. If we really want to tackle child poverty, that is what we need to address.
That will require action on unemployment, insecure work, welfare reform, education and social inequality, and more, but the first step is for the Government genuinely to commit to tackling the issue, with no more empty promises, re-presenting of facts or redefining of parameters. Only the Government can solve this by working across Departments and using every lever they have to create a better present and future for children living in food poverty. Will the Minister, on behalf of the Government, commit to that today?
Mr Peter Bone (in the Chair)
The debate is very heavily subscribed. It is not my method to impose a time limit, but if Members kept their comments to under three minutes—preferably to two and a half minutes —everyone would get in. You will be able to see a clock, which will help you to know when it is advisable to finish. If people take too long, those at the end will not get in.
Jonathan Gullis (Stoke-on-Trent North) (Con)
May I start by saying what a pleasure it is to serve under your chairmanship, Mr Bone? I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), who is Chair of the Petitions Committee, on which I am proud to serve, on securing the debate and thank her for her introductory remarks.
During my career as a teacher, I was responsible, as a head of year, for the wellbeing of hundreds of children, so the issue we are debating is incredibly close to my heart. From my eight years as a teacher, I know how important it is for children to get the support they need and make the most of their lives. That is why, when we look back at the pandemic, we should think about the fact that, so far, the Government have issued over £380 million-worth of vouchers that have been redeemed for free school meals, which was entirely the right thing to do, particularly as children were not in school as we had asked them to stay at home.
We should also think about the £170 million given out through the covid winter grant scheme, which did a fantastic amount of work across the Stoke-on-Trent North, Kidsgrove and Talke area, and the uplift of standard universal credit weekly allowance by £20, which has been extended until the end of September 2021.
The petition has gathered a mass of national support. I want to focus on the holiday activities and food programme, of which I am a huge advocate. In my constituency, I am lucky to have the Hubb Foundation, run by Carol Shanahan and Adam Yates, a former professional football player. Since 2017, it has gone above and beyond, introducing programmes to ensure kids have activities that improve their mental and physical health, and receive a meal during the day. It works closely with schools to target those children who are most in need.
I believe we can also help by shortening the school summer holiday break. A report I wrote for Onward, which I know the Minister has seen, estimates that on average UK families spend £133 per week in childcare. Reducing the six-week break to four weeks would put £266 back in parents’ pockets. That would help to cover the cost of the summer break and help to prevent the widening of the attainment gap, which we know happens in the long summer holiday, particularly between disadvantaged pupils and their better-off peers.
In Stoke-on-Trent, we received over £1 million from the covid winter grant scheme, which helped 18,640 children through free school meal vouchers over Christmas and February half-term. Money also went to the Hubb Pots project, run by the Hubb Foundation, which provided up to 150 families with a slow cooker, ingredients and recipe cards for one meal a day for 12 weeks. Such action will ensure that families can continue to benefit independently and in the long term, because education is so important. We need better home economics education in our schools, so that children understand how to cook on a budget, how to prepare food and how to store it, so that food lasts longer in the fridge and the freezer. That will go a long way to ensuring that those young people have better access.
I thank the Minister for coming to Stoke-on-Trent, where we received £1.4 million for holiday activities. She visited Ball Green Primary School with Councillor Dave Evans and Councillor Abi Brown to witness the fantastic work of the Hubb Foundation, which provided 140 activity sessions across the city of Stoke-on-Trent—one of the largest programmes in the country. It was brilliant to see the confidence that the children were gaining—not only in the skills they were learning, but in the cooking that they were learning from.
I send another big shout out to Port Vale Foundation, which has given more than 300,000 meals to families throughout the pandemic. It won the English football league’s community club of the year award—rightly so, because in Stoke-on-Trent we wrap our arms around every single man, woman and child in our city, and we take very seriously the care and support that they need.
Ian Lavery (Wansbeck) (Lab) [V]
It is a pleasure to serve under your chairmanship, Mr Bone, and I thank my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for leading this very important debate.
Can I begin by saying that child poverty is a political choice? It could be eradicated within weeks if there was the political will. We live in the sixth-largest economy in the world, but the wellbeing of our kids is not a priority. We have to ask ourselves why that is the case. Why has it taken time for the Government to come forward with legislation on the right to food—the right to eat? We know that the Government should be ashamed that kids are going hungry, food banks are on the increase, schools’ food budgets are continually being cut, and class sizes continue to get larger. Unemployment is on the rise, and precarious work is more common now than it has ever been. There is a lack of quality housing, and mass evictions are just around the corner. Fire and rehire is running wild, and the benefits system is not fit for purpose. Soon, the £20 uplift in universal credit will be cut. What an absolute mess.
I understand better than most that we should never believe what we read in the newspapers, but we heard only this weekend about a senior Member of Parliament getting £27,000-worth of takeaways delivered to his house by a delivery driver on a hired pushbike. That figure is utterly amazing. It is more than the average yearly salary of many of my constituents, some of whom have more than just one job in order to make ends meet. For the record, the MP voted against free school meals to feed our kids.
We live in a society where 4.3 million children—31%—live in poverty. That figure is up 200,000 from the previous year, and up half a million over five years. Some 37% of children in the north-east live in poverty, which is the second-highest rate in the UK, behind London. The north-east saw the UK’s steepest increase in child poverty—a rise from 26% in 2014-15 to 37% in 2019-20. All 12 north-east councils are in the top 20 such local authorities in the UK; there have been huge increases.
Let me reiterate that child poverty is a political choice. Despite the tiring and monotonous rhetoric about levelling up, the Government have shown no sign of tackling the endemic child poverty in left-behind communities across the country.
Tom Hunt (Ipswich) (Con)
It is a pleasure to serve under your chairmanship, Mr Bone. I will keep my remarks brief. I would very quickly like to point out that I commend Marcus Rashford for his campaign. He has clearly increased the profile of the issue and shone a spotlight on it, but we must not lose sight of the fact that when the food poverty strategy was commissioned, it was already tasked with the job of looking at many of the things that have come to light and that the petition calls for.
I think back to summer 2020, when my hon. Friend the Minister visited Ipswich because we were a pilot scheme for the holiday activities and food programme. During that visit, she said that her ambition was to extend that programme across the country, and she also spoke about the food strategy. The idea that all this support was cobbled together at the last minute because of Marcus Rashford is false. Although his role needs to be highlighted, it is incorrect to say that was not part of the Government’s plan, because it absolutely was.
When we look at the final copy of the food poverty strategy, we see that many of its recommendations have been delivered, such as expanding the holiday activities and food programme, and increasing the amount of the Healthy Start voucher. The Government asked the food poverty programme to look at all of that, and that is what has been delivered.
I have respect for all hon. Members across this House, whatever their political persuasion—whether on the left or the right—and I do not think there is a single one of them who does not care passionately about the welfare of disadvantaged children in our constituencies. They will be hurt by the idea that young people are struggling—perhaps more now than before—because of the pressures of the pandemic. In my constituency there is significant deprivation, and many young people depend on those vouchers and on that support. But it is important to recognise that most Governments around the world, whether on the left or the right, have this problem. The idea that it is a political choice is completely wrong. That is the politics of the playground.
To solve this problem, we have to work together. The idea that Conservative MPs are callous figures who do not care about our young people and are starving our young children is, as I say, the politics of the playground. I hope that we have left those ideas in the last year. Look at where we are now, having rolled out the new holiday activities and food programme. We should look to work together in partnership.
Conservative Members did not vote to starve children; we voted on a non-binding Opposition day motion, which was followed by the most ambitious package of support ever provided by a Government in this area: £170 million went to grant schemes; £2 million of that went to Suffolk; and £800,000 was spent providing support via vouchers. That left £1.2 million for other interventions, such as helping families in need to get white goods or to pay their heating bills. It is a mischaracterisation to say that this is about political choice; it is a reality we face, and it that will be addressed only if we work together across party. There is not a Member in this place who is not pained by the struggles faced by some families and young people in greatest need. Let us work together, support the Government where they deserve it and challenge them when needed.
Mhairi Black (Paisley and Renfrewshire South) (SNP) [V]
This year alone, Renfrewshire food bank has provided more than 9,000 food parcels. Of those parcels, 2,500 went to children. According to the Government’s own statistics, the number of children in my constituency living in poverty is 2,598. I mention that because, comparing the Government’s figure with the number of food parcels that the food bank provided to children, we see a difference of only eight, yet this Government maintain with a straight face that there is no link between their policies and the rise in food bank dependency. There is clear uptake by people who never expected to be dependent on its services during the pandemic, particularly those who have been left out of any Government support.
The reality is that poverty can pounce on anyone at any time. Once it seeps into someone’s life, the ramifications are painful, debilitating and long-lasting, both physically and mentally. Thanks to our Scottish Parliament, we are seeing some relief in Scotland, where we already have free school meals and are now seeing that extended to all children in Scotland. The difference in direction of our Governments could not be starker: while the Scottish Government set a target to eradicate child poverty in statute, the UK Government have scrapped targets altogether.
Since I was elected, we have had 29 debates on child poverty. This is the 30th. I am tired of this Government’s indifference to the consequences of their actions. I am tired of the Scottish Government having to spend millions protecting people from policies that they did not vote for. I am tired of local unpaid volunteers having to plug the holes gouged out by this Government. But I am still nowhere near as tired as the children living in poverty, because, most of all, poverty is exhausting.
In my maiden speech, I said:
“Food banks are not part of the welfare state—they are a symbol that the welfare state is failing.—[Official Report, 14 July 2015; Vol. 598, c. 775.]
Six years on, what has changed? The fact that this Government knowingly force people to be dependent on the generosity of strangers to literally eat is barbaric. We cannot punish people out of poverty; we have to support and empower them. People in poverty are not the problem; the Government who ignore them are. And if this Government still will not act after 30 debates, then it is time they moved aside for those of us who will.
David Simmonds (Ruislip, Northwood and Pinner) (Con) [V]
It is a pleasure to serve under your chairmanship, Mr Bone. In the opening speech we heard about the fact that in this country—one of the six wealthiest in the world, and a country that has among the cheapest food in the world—any child or any family should not face a problem with food poverty, and I entirely agree. As Members of Parliament, we need to share our challenges and our ideas about how we implement an effective policy solution to that fact. I recall how, during my time in local government, the last Labour Government included councils such as mine to support the development of local food banks. They recognised that for many families, despite there being cash loans available, a relatively—at the time—generous benefit system and widespread access to free school meals, that support simply was not reaching all children.
We must also recognise that the implementation of policies intended to address child poverty has not always resulted in a material change in their circumstances and, in particular, the circumstances of the most vulnerable children. I commend the Government and the Minister for responding not by taking a one-size-fits-all policy approach through free school meals, but by providing financial support to local authorities. It is those local authorities that best know the circumstances of their area and those of their most vulnerable families, and are therefore best placed to ensure that the support that is provided makes a material difference to the daily life of those children. It would simply be a disgrace if we were to take an approach where we implement a policy and pat ourselves on the back, but that policy has not put a meal in the belly of a hungry child, or helped a family facing chaotic and difficult circumstances to turn their lives around.
Over the years, through the approaches we have taken to everything from the troubled families project under the coalition Government to the initiation of the Sure Start programme under the last Labour Government, we have learned that it is about having that local knowledge, experience and understanding of circumstances. I commend the Scottish Parliament and the Scottish Government for the policies they have implemented, because in the context of Scotland those things are right. However, we also need to recognise that in England, where there is not the equivalent—an English Parliament—it is our local authorities that know the circumstances in their communities and are best placed to make the crucial difference.
Certainly, having visited my local food bank and spoken to people in my local authorities who have been implementing the Government’s response, running the programmes to tackle the risk of holiday hunger and engaging with schools, this element of flexibility—providing funding so that local authorities can make the difference—has been much appreciated. It has demonstrated that some families are far more needy than we might have thought, and others have been able to turn their situation around with a relatively small amount of support.
As my hon. Friend the Member for Ipswich (Tom Hunt) highlighted, it is right that we recognise that there is no real party political disagreement about the need for action on this; there is total cross-party agreement. We need to make sure that we have effective policy responses that make a difference for the better in the lives of our most vulnerable children in this country. We need to focus on what we agree on, and in my view, that is what the Government’s policy approach to date has entirely been about.
Stephen Timms (East Ham) (Lab) [V]
I welcome this opportunity to highlight rising food insecurity among children. Relative child poverty has risen sharply. The Resolution Foundation found that nearly half of families with three or more children were in relative poverty after housing costs in 2019-20, and the family resources survey, which covered food security for the first time this March, shows that 43% of universal credit claimants have low or very low food security, so we have a big problem. In the year to last March, the Trussell Trust distributed 1 million emergency food parcels to children. The Independent Food Aid Network, with food banks outside the Trussell Trust, told the Work and Pensions Committee this month that demand last year was more than double that of the year before.
Troubled by those developments, the Work and Pensions Committee set up an inquiry on children in poverty. Our next public evidence session will be on Wednesday. Last December, Ben Levinson, headteacher of Kensington Primary School in my constituency, told the Committee that the plight of families with no recourse to public funds and other pressures compelled the school to set up a trust to provide food packages and parcels for the needy. Kellogg’s has told us that 18% of schools have started a food bank since the pandemic began.
These problems in childhood lead to attainment and health problems later. The University of Liverpool health inequalities team told our inquiry that it has repeatedly found strong evidence of a causal relationship between child poverty and
“mental health problems, cognitive disability, overweight and obesity, and longstanding illness.”
In 2014, the Social Mobility and Child Poverty Commission reported that poorer children were far less likely to achieve high levels of educational attainment. Dr Kitty Stewart from the London School of Economics recently told our Committee that
“money itself makes a difference to children’s outcomes”,
partly because poverty causes stress and anxiety among parents, making it harder for them
“to focus on children’s needs, listen to them, help with homework and so on.”
I support the Sutton Trust’s call for universities to have access to free school meals information, so that they can take account of these issues in admissions decisions. Anne Longfield, the former Children’s Commissioner, who is due to give evidence to the Committee again on Wednesday, has called for a return to better joined-up working between the Department for Work and Pensions and the Department for Education. We need a clear Government focus on tackling the growing problem of child poverty.
The extension of free school meals at the start of the pandemic to families with no recourse to public funds was exactly the right thing to do. I hope that will be made permanent. I know that the Minister’s Department is looking at that, together with the Home Office. It would be very helpful if she could let us know today where that review has reached.
Ben Everitt (Milton Keynes North) (Con)
It is a pleasure to follow the right hon. Member for East Ham (Stephen Timms), and to serve under your chairship, Mr Bone, I think for the first time. I give the customary recognition and thanks to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), who opened the debate.
I think I need to start by saying that wanting all children to have access to nutritious and filling meals is not a party political issue. Not wanting children to go hungry does not define which political party we are in, but how the political debate has been conducted around the issue sadly has. As of March this year, our data highlights that 6% of children live in households with very low food security. That does not mean that 6% of children are going hungry all the time, but it does mean there is a risk that they might.
This may upset some people, but there has been a lot of discussion about what levelling up actually means, and I think in the context of this debate it is appropriate. For me, it is all about equality of opportunity. It is about the opportunity for someone to move their family and their children out of that low food security category. That is why it is something that we should focus on. Jobs, income and security for families are our mission, and our mission is clear.
This is an excellent petition, and I am pleased that we are debating it. It is right to highlight this issue, and it calls for three clear things: expanding access to free school meals; providing meals and activities during holidays, in order to stop holiday hunger; and increasing the value of and expanding the Healthy Start scheme. I thank Marcus Rashford for highlighting the challenges facing families across the United Kingdom, and I agree with his point that it is hard for a child to learn at school if they are hungry.
First, on expanding access to free school meals, the critical point that we need to consider is that the view has been taken to support not only children but their whole families during this crisis. The role of the family is important in our society—it is about jobs, income and security for families.
Secondly, on providing meals and activities during holidays, the holiday activities and food programme has provided healthy food and enriching activities to disadvantaged children, and it has been expanded in England this year. Supporting children in the summer holidays means that we are supporting families and relieving them of the burden of childcare in either cost or time, so that parents can focus on work.
Thirdly, Healthy Start scheme payments have increased, which is a good thing, and the Government are committed to increasing the funding for Healthy Start vouchers across the period.
This is an important topic. Nobody here wants to see children go hungry. We are making progress, and we all agree that there is more work to be done. I look forward to working collaboratively with colleagues to ensure that our ambition to level up opportunity across the United Kingdom can be measured in a real reduction in food insecurity for families.
Mick Whitley (Birkenhead) (Lab) [V]
It is a pleasure to serve under your chairmanship, Mr Bone. I welcome the opportunity to speak in this important debate, although it is a source of shame on this country that we are having to discuss this issue at all. The fact that over 900,000 food parcels were delivered to children in the last year, in one of the richest countries in the world, is a national scandal, and responsibility lies squarely at the feet of this Government.
This issue has a special resonance in my constituency, where over a third of all children are living in poverty. In fact, there are few communities in the country more left behind than the north end of Birkenhead. Here, a male resident can expect to live 11 fewer healthy years than the national average. The typical household income after housing costs is just £16,000, and over half of all children are living in poverty.
The pandemic has been difficult for everyone, but it is particularly bad for young people living in north Birkenhead and the many communities like it. For too long, they have borne the brunt of an austerity agenda that has decimated frontline services. For many of these children, a school dinner is the only hot meal they can rely on in a day, and with schools closed and unemployment soaring, covid-19 has plunged many of them into deprivation and food poverty.
These young people desperately needed this Government to be true to their word and ensure that no child was left behind as we battle this virus, but time and again this Government have had to be shamed into taking even the smallest steps to support these children, whether that is extending free school meals over the summer holidays or maintaining even temporarily the £20 uplift to universal credit. I welcome the Minister’s presence here today, but she should know that defending this Government’s disgraceful record on child hunger is an almost impossible task.
As public health restrictions are eased, I look forward to visiting schools across my constituency. I will be meeting the dedicated educators and support staff who everyday bear witness to the devastating impact that child hunger has on their students and, of course, I will be speaking to the young people who sit at the very heart of this debate. When those children ask me why we have a Parliament and a Government, I would like nothing better than to be able to say, “To look after you,” but in all conscience, I cannot do so while this Government continue to let so many children languish in poverty and hunger.
I urge the Minister to do everything she can to ensure that the blight of child food poverty is stamped out once and for all. That means listening to organisations such as the Trussell Trust and making the £20 uplift to universal credit permanent. It means heeding the calls of my hon. Friend the Member for Liverpool, West Derby (Ian Byrne) and incorporating the right to food in the national food strategy. With 72% of all children struggling with food poverty having at least one parent in employment, it means delivering on the promise of an employment Bill that can end, at long last, in-work poverty.
Jerome Mayhew (Broadland) (Con)
There is no political divide in the desire to grapple with the perennial issues of childhood poverty and child hunger. We can describe child poverty as a perennial since the definition of it is a relative term—a child growing up in a household whose income is less than 60% of the national median. It is as much a commentary on the spread of household earnings as an indicator of want. But childhood hunger is an absolute—either a child is hungry or not. And no child in this country should be hungry.
The reasons for childhood hunger are complex and it will hamper our ability to address those causes properly if we choose, for political campaigning reasons, to over-simplify them. They include unemployment, a sudden change of family income, chaotic finances, drug dependency, poor access to good-quality food shops, poor food education, the breakdown of relationships and low pay in employment. I do not have time today to go into the raft of Government measures that have supported children and families through covid and beyond. I will focus on overall income, because if these things that I have mentioned are the causes of child hunger, then the solution to the majority of them is to focus on the overall income of low-income families.
I say that because providing for one’s children is at the heart of what it is to be a parent. If the state takes responsibility away, it also takes away dignity and self-reliance— it diminishes parenthood. As a parent myself, one of the key life lessons I try to give my own children is that of personal responsibility, so we should be wary of intervening in such a way as to undermine the ability of parents to do the same—storing up, as it will, trouble for the next generation of parents.
The Government must ensure that employment truly is the answer to food insecurity, and for that to be the case employment simply needs to pay enough. I am glad that it was a Conservative Government that introduced a national living wage and it is right that the Government should build on the early foundations to increase the national living wage over a timeframe that allows businesses to adapt their models to accommodate it. This year, the national living wage has increased above inflation yet again to £8.91 per hour and it will continue to grow until it reaches £10.50 by 2024—two thirds of median earnings, which is enough to lift families above child poverty, as it is defined.
I echo the comments of my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) when he says that local authorities are best placed to help the most vulnerable families. However, universal credit, as a stepping-stone to readily available employment at a wage that is enough to get on with the basics of life, is the policy that will help to lift most families out of food insecurity.
I look forward to the publication of part 2 of the national food security paper and I welcome the Government’s undertaking to produce a White Paper within six weeks of its delivery. However, when seeking to provide long-term solutions to child hunger, I hope that the review will bear in mind the value and responsibility of parenthood, and make sure that its recommendations support parents in their role as the most important teachers of the next generation.
Beth Winter (Cynon Valley) (Lab) [V]
A staggering 4.3 million children in the UK currently live in households below the poverty line, according to the End Child Poverty coalition, and of the four UK nations Wales has the highest level of child poverty. In my constituency of Cynon Valley, 35% of children live in poverty, well above the UK average of 30%.
The rising levels of inequality, poverty and hardship in our country are no better illustrated than by the shockingly increasing prevalence of food poverty in the UK. It has been estimated that 2.4 million children in Britain are at risk of malnutrition as a result of living in poverty. Words cannot describe how incensed I am by that, and we should all be filled with anger about the fact that we in the UK, one of the richest nations in the world, have allowed this situation to arise. We should be ashamed that food banks have been normalised in this country; it is a political choice and a shocking indictment of us.
The benefits of free nutritious school meals for children are well known: the health and wellbeing of our children; improved educational attainment; and boosting local economies. I must commend the Welsh Government for the work they have done to date on tackling child poverty. We are the only country in the UK to have a scheme providing universal free breakfasts in primary schools in Wales, and the Welsh Government are the first in the UK to provide such provision during school holidays, which has now been extended until Easter 2022. And that has been achieved in spite of decades of underfunding and austerity from Tory Governments.
However, more can and must be done throughout the United Kingdom, drawing on the excellent and tireless campaigning of organisations here in Wales—the anti-poverty coalition, Child Poverty Action Group and the Bevan Foundation—and especially at a UK level on the work of my hon. Friend the Member for Liverpool, West Derby (Ian Byrne), Baroness Chakrabarti and fan-supported food banks in Liverpool. I call on every nation in the UK to enshrine the right to food in law, which could include an immediate expansion of eligibility for free school meals to all children in families receiving universal credit or equivalent benefits; a move towards the provision of universal nutritious free school breakfast and lunch for every child in compulsory education; and the school kitchens to become community kitchens; welfare benefit system changes that give people security and dignity, including but not limited to a permanent £20 uplift to universal credit, which should be extended to legacy benefits; and piloting universal basic income following the lead from Welsh Government.
I recognise the cost implications, but they are not insurmountable. We can afford it; we are the fifth richest country in the world. Why not introduce a wealth tax—a windfall tax—on covid profits and end tax evasion and avoidance by the rich? There is another way. We need to get our priorities right as a country, and I am determined to do everything I can in collaboration with others to end the scourge of child food poverty.
Catherine West (Hornsey and Wood Green) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone, in a debate on one of the most important issues facing our country. We Members of Parliament will rarely debate anything as pertinent and pressing as child poverty.
We already know that the rich list has come out this week and shown that the wealth of the richest of our society has increased exponentially while tens of thousands of families saw their income slashed. I must disagree with many Members today—this is a political issue. Among the figures which stood out in the rich list was the fact that the UK’s richest person, Sir Leonard Blavatnik, saw his wealth increase by £7.2 billion last year to some £23 billion, in the same period that 4.3 million children languished in poverty. It is not just the lack of money in the pocket, it is the terrible stigma of child poverty. The fact that one individual can gain so much wealth so quickly while millions exist in abject poverty is frankly obscene and reminiscent of Dickensian levels of poverty from a bygone era which has no place in modern Britain.
Even more harrowing is the fact that these levels of poverty are not just the result of Brexit or the covid-19 pandemic. Figures released in March by the Joseph Rowntree Foundation show that poverty among children had been a rising trend for six years prior to the terrible pandemic: 31% of all children growing up in poverty, an increase of 600,000 since 2013-14. In my borough of Haringey, huge levels of inequality are in sharp focus—an increase of 1,748 kids becoming eligible for school meals since the autumn, adding to the total number of over 8,000 or 20% of all children. In the same report, the Joseph Rowntree Foundation reported that three-quarters of children growing up in poverty are from a working family.
What is the solution? First, the living wage should be paid by all employers who can afford it. Why cannot the big supermarkets pay the living wage, whether £10.85 in London or £9.50 outside London? Secondly, we need more controls over ever-rising energy prices in our homes. We should keep transport affordable. Why should water bills keep going up month after month? Let us keep them below inflation.
The most expensive childcare in Europe is in the UK. Discretionary housing payment cuts mean people go into unnecessary debt. There is more debt around unaffordable buy-now pay-later schemes which are promoted all over the place, without any control on their advertising.
I am disappointed that the Government have done away with the industrial strategy. We need growth in the economy, higher wages, and more provision of universal things. The reason everyone loves the NHS is because it is universal. Let us bring in universal school meals, as my hon. Friend the Member for Cynon Valley (Beth Winter) mentioned. Let’s bring in universal housing, where we can, and really address the issue with some energy.
Grahame Morris (Easington) (Lab) [V]
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate. I also pay tribute to Marcus Rashford. I have no doubt that if he had not lent his support to the campaign, it would not have moved the Conservative politicians in the way it did. I also want to single out for special praise my good and hon. Friend the Member for Liverpool, West Derby (Ian Byrne) who has championed the right to food campaign and for its inclusion in the national food strategy.
This debate is particularly timely, as it comes after the publication of shocking new data about child poverty in the north-east. Last Thursday I attended a virtual briefing that was organised by the End Child Poverty coalition and the North East Child Poverty Commission and that revealed that in the three years before the covid-19 pandemic, the north-east had the second highest rate of child poverty in the UK, having an average of 37% compared with the UK average of just over 30%. The north-east saw the biggest increase in child poverty from 2014-15 to 2019-20. It rose by more than one third, from 26% to 37%, meaning that it has risen from just below the UK average to be the second highest rate of any region. More than one third of that increase came between 2018-19 and 2019-20.
Let me say to Conservative Members who have spoken in the debate that this is the defining issue of our time, and it is not happenstance that so many children have been driven into poverty; it is a direct result of Government policies. Closing Sure Start centres and depriving local authorities of the means with which to support children are deliberate policies of this Government, and this is the consequence.
Of the 20 parliamentary constituencies across the United Kingdom with the highest increases in child poverty from 2014-15 to 2019-20, more than four fifths are in the north-east. Child poverty in my constituency of Easington rose 10.7 percentage points, from 26% to 37%.
Like other MPs, I pay tribute to the volunteers and those who have stepped into the gaps, but they are trying to paper over the cracks of Government and their agencies failing to do their job. Urgent action is needed. That means supporting children by boosting child-focused support such as child benefit, which has lost 23% of its value since 2010. We need to reverse the planned £20 cut to universal credit. To help struggling families, we should extend free school meals to all families in receipt of universal-credit-equivalent benefits, legacy benefits, and to those with no recourse to public funds.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
It is a pleasure to serve under your chairmanship, Mr Bone. I commend the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for securing this important debate. We all know that this Tory Government are never short of, or far from, a scandal, but this petition raises one of the most shameful scandals—4.3 million children living and growing up in poverty in the UK. That is nine pupils in every classroom of 30. It is an absolutely outrageous statistic for one of the world’s richest countries.
The Government can start to address this woeful record today by expanding access to free school meals to every child under 16 who currently lives below the poverty line, and by implementing the recommendations from the national food strategy to provide meals and activities during holiday periods to stop children going hungry. I must commend North Lanarkshire Council in my own constituency for its groundbreaking Club 365, which facilitates play and nutrition throughout holiday periods, and has been in place for the past couple of years.
Furthermore, the Government could increase the value of Healthy Start vouchers and expand that scheme today. Tens of thousands of families in the United Kingdom every year are not getting enough food to live on and are being forced to turn to non-state, charitable aid. Of course, we see the rise in food banks across every constituency in the UK.
It can be no coincidence that this new phenomenon of growing hunger has emerged alongside a wide range of draconian policies from the UK Government and the restructuring of the country’s welfare system since 2010. With reductions in welfare support year on year, the number of people, including families with children, going hungry is rising at an alarming rate and constitutes a troubling development in the world’s fifth largest economy.
New figures published by the Department for Work and Pensions on household food insecurity showed that between 2010 and last year, 19% of children lived in households with either low or very low food security, and of those children in poverty, 38% are in households with low or very low food security. That is new and stark data, and it is a stark reminder that child poverty has been rising in every part of the UK, even before the pandemic struck. The challenge now for the Government is to take every possible step to ensure that no child is born into a life of poverty.
Unlike the Tory Government, the Scottish Government have taken bold steps to address child poverty. The introduction of our new Scottish child payment, which is unique across the UK, has been described by many anti-child poverty charities as absolutely game changing in the fight against child poverty. The payment, worth £40 every four weeks, has already benefited thousands of families on low incomes in Scotland. Additionally, the Scottish Government are providing support worth around £5,000 by the time a child turns six through the Best Start grant, Best Start foods and the Scottish child payment.
Time is beyond us, so I will just conclude by saying that the UK Government need to recognise that endemic poverty is neither accidental nor inevitable. Social security is a fundamental and inalienable human right. The safety net that it provides has never been more important, and nor has it ever been more scandalous and unnecessary that so many children in our society are continuing to go hungry.
Mr Peter Bone (in the Chair)
I call Ian Byrne. Please, no more than two and a half minutes.
Ian Byrne (Liverpool, West Derby) (Lab) [V]
It is an honour to serve under your chairmanship, Mr Bone, and I thank my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for introducing the petition to the House.
Today we are debating the need to end child poverty, how we have reached this point and how we can fix it, because of the efforts of a footballer from Manchester who experienced poverty growing up and never forgot. I pay tribute to Marcus Rashford for his transformative work, which has put child poverty right at the top of the political agenda and which has resonated with and united people across the country. In Liverpool, West Derby, 6,487 children live in poverty—a heartbreaking 34%. That figure, which is from the Child Poverty Action Group, represents the level before the pandemic, and the effects of the virus and attempts to control it have hit the poorest hardest in terms of jobs and income. The picture is likely to be even worse now.
As parliamentarians, we must act, and we must push for systemic change. The Government must tackle the root causes of food poverty, such as the current system of universal credit and legacy benefits, which we know provides nowhere near enough support for families to afford food, and which has built-in delays that leave people with no means of support for weeks on end. We must tackle the current system that led to the Government initially denying children free school meals during the holidays—a system that has still not fully met the asks of the petition, as my hon. Friend the Member for Newcastle upon Tyne North outlined in her speech.
Part of that systemic change includes putting our “right to food” submission into the national food strategy, and then into legislation, so that the Government are obliged by law to ensure nobody goes hungry, and so that they are never able to deny children their right to food again. We should guarantee universal free school meals, including a breakfast and a lunch, for every child in this country. Universal provision would avoid the bureaucracy and stigma of means testing our school-age children and would help all to achieve their full potential.
As I have said, we need systemic change in order to achieve the end of child food poverty. The great Nelson Mandela said:
“Overcoming poverty is not a task of charity, it is an act of justice. Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings.”
The time for sticking plasters is over, and the Government must listen to the voices of the 4.3 million children in poverty. That is when the heartbreaking figures will shame the Government.
Naz Shah (Bradford West) (Lab) [V]
I was appalled to hear some of the earlier speakers suggest that this is not a political issue. I want to thank Marcus Rashford and the 1.1 million people who have signed the petition. When it needs 1.1 million people to sign a petition to call for a debate, it absolutely is political. We are one of the wealthiest nations in the world. Despite this, UNICEF—an organisation that is responsible for humanitarian aid to children worldwide—launched an emergency response to the UK. There would have been no need for that if this issue was not political. There would have been no need for 1.1 million people to have signed the petition.
In the year 2020, Bradford Metropolitan Food Bank gave out 20,000 emergency food parcels, including to constituents in my constituency of Bradford West. That represents a 67% increase. The injustice of child food poverty cannot be permanently addressed by emergency food parcels and generous donations from local businesses such as those in Bradford West and across the country. The Government must commit to eradicating child food poverty, and should not go ahead with their plans to scrap the £20 universal credit uplift. I have said it before, and I will say it again: it is clear that a cut to the £20 increase risks plunging children and families into food poverty and further destitution. It is just not good enough. The Child Poverty Action Group has stated that lifting the two-child limit and the benefit cap would lift hundreds of thousands of children out of poverty, and an increase to child benefit would substantially reduce poverty.
The Government cannot allow children to bear the burden of the pandemic while people are losing their jobs. People need food security. The hon. Member for Broadland (Jerome Mayhew) talked about the dignity of parents. If the Government want to give real dignity, they should reverse the austerity, give people what they are entitled to, build back, and level up properly so that people such as those in my constituency do not continue to suffer because of the Government’s failures.
Mr Peter Bone (in the Chair)
I am grateful for the self-discipline that Members have exercised in this very important debate, but we have run over slightly to get every Back-Bencher in. Front-Benchers, could you take one minute off your maximum allowance? I call Patrick Gibson. [Interruption.] Sorry—Patricia. I read what is in front of me. I apologise.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I have been misgendered in better places than this, Mr Bone. I am delighted to participate in this debate, and I thank the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for her comprehensive exposition of the shocking issue of child poverty. It should be a cause of shame and embarrassment to us all that, in 2021, across the UK some of our children are still going hungry.
It is clear that the current welfare system simply does not fulfil its avowed aim, which is to assist those who are able to work to re-enter the job market. It seems that the route to achieving that has been woefully misunderstood. Otherwise, there would be no five-week wait for support. There would be no so-called advance payments, which those who eventually receive universal credit, and who are already on the breadline, are forced to pay back, throwing them further into financial distress and consequently further away from the job market. No reputable lender would lend money to those living on welfare because they do not have sufficient means to repay, yet the DWP is content to lend money to claimants in the full knowledge that repayment will cause even further financial distress and reduce their means of returning to the job market. Why on earth would someone design a system in that way?
As a great admirer of Charles Dickens, I think it is worth remembering that he criticised the new Poor Law of 1834 as being unable to elevate the conditions of the poor, and was concerned that the law pushed the poor further into poverty while the rich became richer. It is all starting to sound very familiar. In Dickens’s times, we had philanthropists and public donations to relieve hunger. Today, we have replaced that with food banks. Even now, in 2021, we know that there are children in our communities who turn up to school hungry. We know that the poverty in which they live goes well beyond the material.
Material poverty is the midwife to so many other privations that our children suffer as well as hunger. It brings with it poverty of self-esteem, poverty of opportunity, poverty of cultural experiences, poverty of family support and poverty of potential. Children who grow up hungry sadly lose their innocence long before they should, yet it seems to be the case that those with the power to address that are content in the belief that they are doing all that they should to address it, as did those on the Poor Law boards during the 1800s.
The logic seems to be that if someone is poor they could improve their poverty if they really, really tried. Therefore, to some extent their poverty is a choice. The only folk who could believe that are those who have never gone without. For a variety of reasons, not everyone is able to dig themselves out of the pit of poverty. Sometimes the obstacles are simply too great, and most children living in poverty are in homes where a parent is working.
To improve matters, we could fix elements of universal credit, which traps families in poverty and keeps them out of work. We could replace advance payments, which are in reality loans provided to those with no possible way of repaying them without being driven into a pit of debt. We could replace those payments with loans that are not repayable, or we could get rid of the five-week wait so that claimants can be paid more quickly and can look after their families, and we could do more to promote the real living wage instead of the pretend living wage that we currently have.
In Scotland, the SNP Government are expanding free school breakfasts and lunches to every primary school pupil. Best Start food payments across Scotland are increasing, and eligibility will increase by about 50% to all in receipt of universal credit. Alongside that, we have a UK Government that scrapped targets to reduce child poverty, but in Scotland we have ambitious targets to eradicate child poverty. The Scottish child payment of £10 per week per child for those on qualifying benefits will increase to £20 per week per child, assisting 450,000 children across Scotland. Meanwhile, the UK Government refuse to commit to retaining the £20 uplift in universal credit. They are scrapping targets to reduce child poverty while presiding over a rise in the same.
Despite their limited powers, the Scottish Government understand that with the Trussell Trust handing out a food parcel every two and a half minutes, the status quo is not an option. More can and should be done to tackle child poverty and hunger. Hungry children are robbed of the opportunity to be happy children and are scarred in ways that we cannot always see. The Minister can forget trying to close the attainment gap if childhood hunger is not tackled. Hungry children’s education suffers. Their life chances and health outcomes, even in later life, suffer. Their self-esteem suffers, and their ability to reach their potential and contribute all they can to their community suffers. The cost of hungry children is far more expensive to the state than that of feeding our children. The social cost is almost incalculable. The UK Government’s welfare policies are hard for Scotland to swallow since they are served up to us on a plate by a Government we have repeatedly rejected.
As someone who grew up in grinding poverty, I can testify personally to the ill effects that it brings beyond what can be seen on the surface. In Scotland, real efforts have been made by the Scottish Government, with their limited powers, to tackle child poverty and child hunger, but more can and should be done by the Westminster Government. Some 85% of welfare powers are reserved to Westminster, so I urge the Minister to ensure that ways to tackle child poverty and child hunger that will actually improve the lives of children and their families are implemented as a priority, otherwise, just as Dickens pointed out with regard to the new Poor Law of 1834, the current system will not elevate the conditions of the poor, but push people further into poverty while the rich become richer. Despite what anybody else might say, these decisions are political decisions.
Tulip Siddiq (Hampstead and Kilburn) (Lab) [V]
It is a pleasure to serve under your chairmanship, Mr Bone. I thank my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for moving the motion, and the more than 1 million people who signed the petition to end child poverty, including 3,000 of my constituents in Hampstead and Kilburn. I also thank colleagues who have contributed to the debate. Our country owes a huge debt of gratitude to Marcus Rashford MBE, whose powerful advocacy has pushed the issue to the forefront of our political debate and forced Ministers to confront it, as my hon. Friend the Member for Liverpool, West Derby (Ian Byrne) pointed out. Many more children would have gone hungry last summer and Christmas if it were not for his efforts.
We know that the Prime Minister enjoys stretching the truth from time to time, but one of the most maddening claims that he has ever made was that no child would go hungry during the pandemic. As we have heard today, that could not be further from the reality, with 200,000 children forced to skip meals in the early months of covid-19. Some 2.3 million children live in households that experienced food insecurity this winter, and more families than ever are having to rely on food banks to feed their children. As my hon. Friends the Members for Wansbeck (Ian Lavery) and for Birkenhead (Mick Whitley) said, no child should go hungry in a country as rich as ours. But they are, and in increasing numbers.
Although we should focus on making sure that hungry children are fed, we need to understand that this food poverty is a result of poverty itself, which has been rising dramatically since 2010. Some 4.3 million children were in poverty at the start of the pandemic—up 500,000 from five years earlier. In that period, child poverty rose in every region in England, with shocking high rises in the north-east, where an astonishing 37% of all children were in poverty at the start of last year, as my hon. Friend the Member for Easington (Grahame Morris) pointed out so powerfully. In practice, that means that many more parents are struggling to put food on the table—despite their best efforts—with all the dreadful consequences that brings for the child’s health, wellbeing, development and education, as my right hon. Friend the Member for East Ham (Stephen Timms) outlined.
The truth is that rising levels of child poverty are a direct result of policy choices over the last decade, which we knew would eventually lead to this outcome. As my hon. Friends the Members for Hornsey and Wood Green (Catherine West) and for Bradford West (Naz Shah) said, this is a political choice. Both Members powerfully made the case for food security for children in their constituencies. Since 2010, the Government have slashed the social security system to ribbons. Universal credit was designed in a way that punishes ordinary families, with its five-week wait, two-child limit and other design flaws. They have presided over an economy where wages have been stagnant while housing costs soared. The predictable result is that communities all over the country have been forced to set up food banks, the use of which has skyrocketed in recent years.
If we continue along the current course, the Resolution Foundation projects that three-quarters of a million children could be added to the already swelling ranks of those living in poverty by 2024. That must be avoided at all costs, but there is no sign that a change of approach is coming. As my hon. Friend the Member for Cynon Valley (Beth Winter) pointed out, having failed to uplift legacy benefits, including disability support, the Chancellor still will not confirm that he has scrapped the plan to cut universal credit from October this year. As my hon. Friend the Member for Newcastle upon Tyne North argued so powerfully, it is shocking that we have no shortage of food in this country, only a shortage of money to buy it. We will never be able to abolish child poverty without tackling the root causes of poverty, but there is a lot more that the Government could do to get food to hungry children.
I turn to the points in the petition. I am delighted that Marcus Rashford and others have been able to secure an uplift in the value of Healthy Start vouchers. At present, hundreds and thousands of eligible families are missing out on the vouchers, and Ministers have a responsibility to ensure that the support gets to those who need it. The same goes for free school meals. Clearly, the Government need to do more to ensure that those who do not qualify for free school meals can get the food support they need. Labour wants to replace universal credit with a fair and compassionate system that delivers support to those who need it. The hardship of the pandemic has exposed the need to ensure that all children can get free school meals during the holidays, although Ministers have had to be dragged kicking and screaming to accept that and do the right thing.
Although I welcome the countless U-turns that the Government have made in the face of public pressure, their holiday activities and food programme in its current form offers only 16 days of food support over the summer, and will not guarantee that all children who qualify can access it. They need to rethink. I hope the Minister will rethink and give a proper guarantee of support in the pandemic.
Making sure that no child goes hungry should be our national mission, not an unfounded boast bandied about by the Prime Minister as a smokescreen for the fact that so many children are skipping meals and relying on food banks. Our children need fewer warm words and more warm meals. That will require far better and more compassionate leadership on issues such as free school meals, as well as a Government who are serious about tackling the root causes of the hardship and financial insecurity that families face. I hope, for the sake of our children and generations to come, that we get that very soon. I would like to hear what the Minister has to say about the petition.
The Parliamentary Under-Secretary of State for Education (Vicky Ford)
As ever, Mr Bone, it is a pleasure to serve under your chairmanship. I thank everyone who has signed the petition for securing this important debate, and I thank Marcus Rashford for launching the petition, which promotes the crucial work of the National Food Strategy’s independent review. This Government are dedicated to supporting all children and families, especially the most vulnerable. The Government are fully considering all the recommendations of the National Food Strategy, and I am pleased to be able to report on the actions already taken on the recommendations that are covered in this petition.
During this pandemic, this Government have not only been listening; they have been acting. The Government have taken substantial action to provide additional support to families and children at this incredibly challenging time, including investing an additional £7.4 billion last year to strengthen the welfare system, because supporting those on lower incomes and vulnerable families and their children is at the heart of this Government’s response. The petition calls on the Government to ensure that Healthy Start vouchers are worth at least £4.25 a week. That has already been done: from April, Healthy Start payments increased from £3.10 to that £4.25 a week. The scheme supports pregnant women and those with children under the age of 4 on lower incomes to buy fresh fruit and vegetables, and the Government are developing a digital approach that will make it much easier for families to apply for, and use, this Healthy Start benefit.
When it comes to holiday activities and food, the petition calls on the Government to provide those meals and activities over the holidays. Again, this is an area on which we have taken action. Families welcome support during school holidays, especially in the long summer break. Children benefit from engaging holiday activities, which help them to be ready to learn when they return to school. I am therefore delighted that after three years of our developing these schemes through really successful pilots, we are now able to expand the holiday activities and food programme all across England this year. The programme launched this Easter in every local authority, and will provide support this summer and Christmas, too.
The programme is available to children in every local authority in England. It provides not only food, but opportunities to have fun and make new friendships—things that children have so missed out on this year. I am delighted to have had the opportunity to visit clubs in Ipswich, in Stoke, and in my own constituency and elsewhere in Essex. I have seen at first hand the real benefits that some of those vulnerable children get from attending the clubs. Those activities are a vital component of our recovery work and of levelling up, because these kids build their confidence, which helps them to tackle the attainment gap between disadvantaged children and their peers. I ask Members please not to diss these clubs, but to get behind them in their constituencies and support them and their children.
Thirdly, the petition calls for the free school meals eligibility criteria to be further extended. During term time, the Government already support schools to provide a free school meal to over 1.6 million pupils from the lowest-income families, because that helps them to concentrate, learn, and achieve in the classroom. The Government have already extended free school meals to more groups of children than any other Government for the past half century. We extended free school meals to all infant children back in 2014, and to students at further education institutions from disadvantaged backgrounds at the same time. During the pandemic, we further expanded free school meals eligibility to many of those families who have no recourse to public funds.
The right hon. Member for East Ham (Stephen Timms) asked for an update about our review of support for no recourse to public funds families, which—like so many other areas—involves work from all sorts of different Departments. However, he knows that the review is progressing, that it is drawing conclusions, and that we hope to report back soon. He knows this because he met the Secretary of State for Education just a few weeks ago to discuss that review. So, yes, we are doing this work, and we will work not only with other organisations but across parties, because this issue is about getting the best support for children and it should not be a party political issue.
During the pandemic we also made sure that those who become eligible for free school meals can get immediate access to those meals. As well as lunchtime meals, the Government support more than a quarter of a million children with our breakfast clubs in more than 2,450 schools in the most disadvantaged areas of the country. We have recently announced another £24 million to continue and expand our breakfast club programme.
Throughout the pandemic, we spent almost £0.5 billion on food vouchers, so that children had access to food when schools were restricted from opening. My colleagues at the Department for Work and Pensions have also provided local authorities with an additional £269 million of local welfare funding.
As my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) pointed out, local authorities know their local needs best. This funding has helped local authorities to provide targeted support to families and individuals, keeping them warm and well fed. Its principal focus is on supporting disadvantaged children and families, both in term time and in the holidays. The scheme will run right through until 21 June, which is the end of this stage of the road map.
Our expanded holiday activities programme will run this summer, in every local authority in England, and we are exploring any additional support that may be needed through the summer. Fundamentally, it is right that free school meals remain primarily targeted at those on the lowest income, but the Government will fully consider eligibility, alongside the other recommendations of the national food strategy.
Vicky Ford
I cannot take interventions because we are really short of time, and I want the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) to have time to respond.
Education is the No.1 route to opportunity and prosperity. Because this Government believe in levelling up for young as well as older age groups, we invest more in the education of disadvantaged students so that they can unlock the best life chances. Our weighted national funding formula and the £2.5 billion spent annually on pupil premium funds academic interventions as well as important pastoral initiatives.
Furthermore, we invested £1 billion in the covid catch-up fund, including investing in the national tutoring programme, which offers high-quality tutoring to small groups of disadvantaged pupils who have fallen further behind. Just a couple of weeks ago, I saw this programme first hand working with a group of five-year-olds and helping with their early language skills. We are working on this project with 40% of our primary schools across the country. The national tutoring programme is making sure that those children who need it most get the best send-off on their education journey.
As my hon. Friend the Member for Broadland (Jerome Mayhew) pointed out, work is the best route out of poverty for families. After taking into account housing costs, a child living in a household where every adult is working is about four times less likely to be in absolute poverty than a child in a household where nobody works. Therefore, through my colleagues at DWP, we are doubling the number of work coaches to help people find a job. Our brilliant kickstart scheme is offering work placements for 16 to 24-year-olds and the skills Bill not only unlocks new opportunities for young people, but, through the lifelong learning grant, it will open up opportunities for people of all ages to access new skills and opportunities, and find better paid jobs. All of this helps families and children.
I am grateful for the support that hon. Members have given this agenda today. I thank everybody who contributed to the national food strategy, especially Henry Dimbleby for his leadership. I am delighted, as hon. Members might have heard in the tone of my voice, about the roll out of the holiday activities and food programme. I hope hon. Members will get behind those programmes in their constituencies this summer.
As agreed at the start of the review, the Government will fully consider all the recommendations of the national food strategy and we will respond more fully following the next and final report, which is due in the summer. The Government are taking a wide range of comprehensive measures to support children and their families at this very difficult time. The health and the happiness of children will remain at the heart of Government as we build back better from this pandemic.
Catherine McKinnell [V]
The Minister crammed a lot into her response, but I did not hear a commitment to extend free school meals and healthy start vouchers, to continue the holiday activity funding or to expand the food programme—the three asks in the petition. Each one of these demands is recommended in the Government-commissioned national food strategy review. Indeed, Marcus Rashford has tweeted during the debate to say,
“It’s confusing that we are debating the implementation of government-commissioned findings. Gov did the research. Gov gathered the data. And solutions were formed from that (NFS). I endorsed them…so what’s to debate? Let’s discuss the findings and discuss the solutions.”
However, we have listened to Conservative Member after Conservative Member, including the Minister, say that this is a cross-party issue, that it is all very unfortunate and that no one wants to see children going hungry, but that it is not political. I agree that politics is at its best when we pull together in the same direction, but the fact is that we would be doing the ever increasing number of children growing up hungry and in poverty—on this Government’s watch—no favours at all if we did not call it out.
There is no shortage of food in this country, and children are not going hungry because they cannot get food. They are going hungry because their families cannot afford food, as they are stuck in a cycle of insecure work, lack of opportunity and high cost of living, and they are let down by a social security system that is failing in its most basic function. The most important step the Government could take to address child food poverty is to address child and family poverty, with a proper joined-up strategy across Government.
We are one of the richest countries in the world, and there is nothing inevitable about millions of children going hungry in this country, but unless we get to the root of the problem—rather than just treating the symptoms or, worse, failing to take responsibility for it—it is a problem that will not go away. The Government need to step up now.
Question put and agreed to.
Resolved,
That this House has considered e-petition 554276, relating to child food poverty.
Covid-19:International Travel
(3 years, 6 months ago)
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Yvonne Fovargue (in the Chair)
I remind hon. Members that there have been some changes to normal practice in order to support the new hybrid arrangements. The timings of debates have been amended to allow technical arrangements to be made for the next debate. There will also be suspensions between each debate. I remind Members participating physically and virtually that they must arrive for the start of debates in Westminster Hall. Members are expected to remain for the entire debate.
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Nick Fletcher (Don Valley) (Con)
I beg to move,
That this House has considered e-petition 565102, relating to international travel and covid-19.
It is a pleasure to serve under your chairmanship, Ms Fovargue. Another petition and another covid story that is either desperately sad or frustrating on an emotional and economic level—sometimes both. Governing is always challenging, but since March last year the Government have had to make a series of exceptionally difficult decisions. One issue that has been a source of continuing controversy is travel—who should be able to do it and for what reasons, where they should be permitted to go, and the conditions that should apply on their re-entry. Of course, when deciding those restrictions protecting public safety is paramount, but I know that Ministers have had to make those decisions while balancing a number of competing demands.
The debate concerns two of those competing demands, which affect both the personal and professional lives of people in my constituency and across the country. First is the effect of travel restrictions on people in long-distance relationships. The second is the financial hardship that the travel industry has suffered. Let me speak on the travel restrictions first. While most people who do not live with their partner have spent the last year worrying about bubbles and outdoor walks, those whose partners live abroad have dealt with concerns that are on another scale.
People in long-distance relationships are used to spending time apart, but 14 months is quite a long time. For a substantial period of that, travel has been illegal to all intents and purposes. Even when it has technically been allowed, the cost of testing and quarantining has made travel prohibitively expensive. I recently spoke with a young woman named Katie, who started the petition. Her partner David lives in Germany and they have known each other for four years. Before the pandemic, they used to visit each another regularly. Those trips would cost on average around £200. Now that Germany is on the amber list, the same trip would cost her £600, not including any income that she may lose while isolating. If Germany were on the red list, it would cost £2,400. As a result, Katie and David have seen each other only three times in the last 18 months.
According to a survey conducted by the group Love is Not Tourism, the impact of extended separation on people in long-distance relationships has been significant. Of 400 people in binational relationships questioned for the survey, many had felt depressed and hopeless and said that they were finding it difficult to do their work or take care of things at home. Sadly, Love is Not Tourism has said that 18 people in long-distance relationships have lost their partners to suicide. While suicide is a complex issue and does not have one single cause, it is impossible to deny that the distress caused by extended separation must have played a part.
In a survey run by the Petitions Committee of those who signed the petition, one respondent said:
“I have been separated from my partner for over a year…The stress, sadness and wait alone (literally alone) for any news the travel restrictions to the US will be lifted is horrendous. He cannot come here (to the UK) because of work commitments, only I am in the position to travel to him.”
That comment is typical of those who submitted feedback. While this issue primarily affects partners, parents and children who live in different countries have also been significantly impacted. Travel restrictions have meant that some people with young children have not been able to see them in many months.
I know the Government will have looked at the data on the risk of infection when setting out valid reasons for travel during the last lockdown, but it strikes some people as unfair that one can travel abroad for a business meeting, but seeing one’s partner or parent is treated the same as a holiday. This was a common theme in the feedback the Committee received, with one respondent writing:
“My father splits his time between the UK and Argentina. His wife is Argentine and has children resident in Argentina. Dad has myself, my sister and three grandchildren who are all desperate to see him. I haven’t seen Dad since 13 March 2020. I understand why restrictions had to be put in place, I’ve followed every rule. Dad doesn’t want a holiday—just contact with his family.”
Since last August, the German Government have allowed non-EU, unmarried partners into the country, provided they can demonstrate they are in long-term relationships and have met in person before. Those are reasonable requirements that the vast majority of those in long-distance relationships would be able to meet. If we had had something similar during this past year, it might have saved many people quite a lot of heartache and stress. Unfortunately, now that Germany has declared the UK an area of virus variant concern, people such as Katie and David will face even more challenges to seeing one another.
I understand that travel restrictions have been necessary over the past year. In the middle of our loosening restrictions, the appearance of the Indian variant has not helped the petitioners’ argument. However, I urge the Government to consider making allowance for people to visit their partners along the lines of Germany if we are ever to be in this position again—let us all truly hope not.
Turning to the professional side of the debate, travel restrictions have clearly had a severe impact on all parts of the travel industry. This covers a range of businesses from hotels to airlines, including my very own Doncaster Sheffield Airport, but today I would like to discuss travel agents who, I believe, have been disproportionately impacted, even among those in the travel sector, simply because of the structure of their businesses.
Since the pandemic began, travel bookings have been down 80%. In March, 57% of small and medium-sized travel agents said they did not have enough cash to survive more than six months given current restrictions, and 87% thought they would fail within a year. Last week, I had the opportunity to speak with Luke Petherbridge of the Association of British Travel Agents. He stressed that, in addition to suffering all the same pressures as the rest of the travel industry, travel agents have been in a particularly precarious position because they do not receive their commission until their customers actually travel. When customers cancel, travel agents have had to issue refunds out of their own account, while waiting for suppliers to refund them. ABTA estimates that 195,000 people working in travel agencies have already lost their jobs or are at risk of doing so.
Travel agents have not been able to take full advantage of the furlough scheme, either, because staff have been required to issue refunds and manage rebookings, activities that do not bring in any revenue but prevent companies from using the job retention scheme. I know this from speaking to two private travel agents in my constituency. Ideal Travel and Small World Travel have worked desperately hard to keep their customers happy. I hope this will be repaid locally when my constituents are booking their holidays over the coming years.
Frequent changes in travel advice, although many will agree necessary, will prevent travel agents making long-term plans. ABTA members are also concerned that what Government support they can access will be wound down too quickly because of the amount of time it will take for their industry to return to normal operations.
The Government could take a range of measures to help travel agents and I ask the Minister to consider them. Extending the self-employment income support scheme, along with full business rates relief for businesses operating in international travel would make a notable difference. The wider use of NHS covid tests and lateral flow tests can help both those travelling to visit their loved ones and travel agents, whose livelihoods depend on tourism. The requirement for multiple PCR tests was heavily criticised by petitioners, who believe that it is disproportionate and exploitative. One survey respondent wrote:
“I think it is excessively expensive. Seeing your family shouldn’t be a luxury”.
People also do not understand why the NHS test is not accepted for travel, with people instead having to pay hundreds of pounds for private PCR tests. Another petitioner said:
“Flights don’t allow NHS tests to be used as pre departure tests, which seems odd, surely the tests provided by our national health service should be sufficient”.
Therefore, my ask of the Minister here today is to work with colleagues in Government to see whether it will be possible to allow people to use NHS and lateral flow tests, as that would remove a significant financial burden from travellers visiting loved ones and be a more realistic possibility in helping the travel sector to recover more quickly. My ask of the petitioners and the good people of this country is to please continue to come forward for your vaccination and, although it is hard, just for a little longer bear with the restrictions. That really is the only way to get us and the rest of the world back to some kind of normality.
Mr Ben Bradshaw (Exeter) (Lab) [V]
It is a pleasure to serve under your chairmanship, Ms Fovargue, and to follow the excellent speech by the hon. Member for Don Valley (Nick Fletcher). I thank all those who have signed the petition, including 300 of my own constituents. Many of them have heartrending stories of separation from family or other loved ones or of missing deathbed visits, weddings, funerals and baptisms. For some, this separation, with all its consequences for mental health, goes back well over a year, particularly if they were not lucky enough to be able to make use of the limited travel allowed to some countries by last year’s travel corridors.
Tonight’s debate is a useful corrective to the recent media coverage of travel, which has tended to focus on holidays. We should not have a problem with people taking safe holidays—I certainly do not—but this is also about the millions of people in Britain who have family or loved ones in another country, who have been unable to see them and who are longing to do so. More than one third of children born in the United Kingdom have at least one parent who was not born here. That illustrates the scale of the separation that many of our constituents are experiencing.
Outward travel from Britain in a normal year generates £37 billion for our economy and sustains 526,000 jobs. Inward travel generates £28 billion and sustains 450,000 jobs. That does not include the value of business and professional travel, which is estimated by the Business Travel Association to be even greater. Nobody—at least almost nobody—has been arguing that we should not have any restrictions on travel at all. Every other country that is similar to the United Kingdom in its economy and the impact of covid has had foreign travel restrictions, but my concern is that the Government, having perhaps not been cautious enough on travel earlier in the pandemic, are now being over-cautious, as we come out of it, given the evidence and the data, and especially given the success and advanced state of our vaccination programme.
Look at what other countries are now doing, Ms Fovargue. Vaccinated Americans are free to travel. Most of our European neighbours are free to travel with either proof of vaccination or a negative antigen test, which is cheaply and widely available, including at most airports. A number of countries, including Greece, Spain, Italy and Portugal—yes, they are popular holiday destinations for British people, but they are also countries with which people living here have many family and other ties—are already welcoming British people with open arms. They are at most requiring proof of vaccination or a negative antigen test, or, in the case of Spain from today, neither, but for most people in Britain, the fact that those other countries are ready to welcome us is meaningless because, with the exception of Portugal, all are on the Government’s orange list, requiring quarantine on return as well as multiple expensive PCR tests.
Back in February, as our vaccination programme was roaring ahead compared with those in the rest of Europe, there was a front-page headline in the German tabloid newspaper Bild Zeitung along the lines of, “The Germans are green with envy because the Brits will get to the sunbeds first this year”. That was a comment on our stellar vaccination programme. It may sound glib for me to press the point, but the Germans and other Europeans are already on the sunbeds in Spain, Greece and Italy. The British, by and large, are not.
We were promised and led to expect a vaccine dividend, but when it comes to foreign travel, we have the opposite. The British are not only under tighter travel restrictions than our European neighbours; we are more restricted than we were last summer, despite having the most-vaccinated population in Europe after Malta.
Some will say in response, and I am sure that the Minister will say later, “Ah, but the variants.” Of course, we must be on guard against new variants, against which the vaccines might not provide such a strong defence. However, we already know—the Government confirmed it this week—that the vaccines are successful against all the known variants. If the post-vaccine reality is that we have to live with the virus, and on that there seems to be a consensus, then, yes, by all means have a red list of countries of concern, but are we really going to keep our borders effectively closed and restrict travel from places that do not pose a risk, with all that entails in prolonged family separation, lost jobs and even greater damage to our economy?
The Government themselves claim to take a risk-based approach, so perhaps the Minister could answer these questions. Why does she believe that Germany, which overall has a very good record in dealing with covid and just as much concern for its citizens as we do, and other comparable countries are allowing their citizens more freedom than we allow ours? Can she explain why the long-awaited green list of countries was so limited, when infection rates in America and across Europe have been falling rapidly and vaccination rates increasing rapidly? Why was Malta, which has a higher vaccination rate and a lower covid rate than the UK, left off the green list? It would be really helpful, to the public and to our long-suffering travel and transport sectors, if the Government published their criteria for deciding whether a country is red, amber or green. The European Union has done that. Why can’t we?
The Government say they still have an islands policy, as they did last year, but that was not apparent when they published their green list, as numerous Greek and Spanish islands, which have lower infection and higher vaccine rates than Portugal, were not on that list. So, will the Minister confirm that we still have an islands policy, and that that will be clear in the next review?
What conversations has the Minister had with her Home Office colleagues about the unacceptably long waits and the mixing of people arriving from different traffic-light countries at Heathrow airport? It is welcome that there is belatedly to be a designated terminal for people arriving from red-list countries, but the rest of Europe already operates digitisation for arrivals and that must surely be possible here, especially for people arriving from green-list countries.
Will the Minister ensure that the inconsistency between what the Government in Britain say about travelling and what the Foreign Office advice says is addressed? That inconsistency has only added to the confusion for the public and for the travel industry.
When a pre-arrival 20-minute antigen test is enough for Germany and most of our neighbours, why is the UK still insisting, even for green-list countries, on an expensive pre-return PCR test, which has to be in English, Spanish or French and so is not available everywhere, and another PCR test after someone has returned?
The sacrifices that people have made over more than a year, along with our very successful vaccination programme, should mean that, as we adapt to living with covid, the UK is in a better place and ahead of other countries as we emerge from this terrible period. However, when it comes to travel, we are not ahead; we are behind our main neighbours and competitors. That is already having consequences in prolonged heartache, and worse, for our constituents who are separated from family and other loved ones, and in the jobs that are lost in our vital travel and transport sectors. Before the pandemic, we were world leaders in those sectors, but “Global Britain”, as the Government like to refer to us, is losing income, business and trade to our competitors in other countries, because those countries have opened up for travel ahead of us.
All I ask is that the Government bear all that in mind, alongside their desire to restrict people’s freedoms to protect public health, when it comes to the important decisions that they have to take on travel in the days and weeks ahead.
Yvonne Fovargue (in the Chair)
Will Members try to keep their contributions to five minutes, so that we can get the Minister in?
Huw Merriman (Bexhill and Battle) (Con)
Thank you for calling me, Ms Fovargue. It is a pleasure to speak in this important debate, and I thank the more than 100,000 petitioners who have made their voices heard. I particularly welcome the case for families seeing their partners, where they are not married, and their friends and loved ones generally. For far too long we have been told that people should not be able to go on holiday. I profoundly disagree and, like the right hon. Member for Exeter (Mr Bradshaw), believe people should be entitled to go on holiday.
What has become of our country that we seek to demonise those who wish to go on holiday? For a lot of people, this is about a trip abroad to see their loved ones and those they are in a relationship with, whom they have not seen for over a year in certain circumstances. To me, that demonstrates a need for compassion so as to allow those individuals to get back to see their families, friends and loved ones. I absolutely get behind the e-petitioners; they have my full support to ensure that not just they, but others who have legitimate reasons to do so, are able to travel abroad. I believe that is now safe and proportionate.
I am grateful to the e-petitioners because the Transport Committee has been able to tag on to this debate the two reports in which we made our recommendations to Government. In the first report, dated 9 March this year, we pushed for the Government to ensure that the global travel taskforce recommendations were published by 12 April to unlock international travel by 17 May. We were glad that the Government largely met those dates.
Perhaps the more relevant report in terms of time is that of 20 April this year, in which the Committee made a number of recommendations, which are worth highlighting. The first was that the traffic light system should be populated by 1 May to give industry and travellers sufficient time to navigate the rules and comply with them. The second was that the criteria for changing the traffic lights should be set out in full by 1 May. The third was that testing requirements should be proportionate to the risk set out with respect to those traffic lights.
The final recommendation was that Border Force resourcing and the sponsorship of digital arrivals should mean that more people could safely come through the airport terminal. I was disappointed when nothing arrived by 1 May, but obviously we did hear something on 7 May. We heard about the criteria, which I welcome, but on those first two I was absolutely underwhelmed by the number of countries on the green list and the sheer number on the amber list. It was incredibly disappointing, for the reasons I will set forth.
I am conscious that I did not check what time I began speaking, Ms Fovargue. The right hon. Member for Exeter had the benefit of a clock, but I do not, so I will give myself two more minutes. I apologise if that makes me overrun.
I was pleased that the Border Force resourcing was stepped up by the Government, and indeed e-gates will come into force as well, so there is some progress there. I make my ultimate plea the Government: 70% of the UK population have been given a first dose of the vaccination, and 34% are fully vaccinated, which means that 60 million vaccines have been put into arms. It is essential that we get moving and give people back their liberties and freedoms—not just for them as individuals, but so as to employ the 500,000 people in our economy who rely on international travel.
I am not glib about safety, but it has been demonstrated that the vaccine is effective on the latest mutant strain, and if we take the view that we can never unlock because there might be a risk of a mutant strain, we will never be able to fly again. There has to come a point when we look at the proportionality, the health risks involved and the mitigation in place against those health risks, which is testing and quarantine, and we then look at what is good for the economy and for people’s individual freedoms. Otherwise, what is the point of having a successful vaccination programme? Where is the vaccination dividend, and when can we return to a situation whereby people are able to visit their loved ones, friends and families, or indeed take a well-earned holiday? We will then prove to the British people that it was worth it after all.
I apologise profusely if I have gone over time. Had I had the clock, I would have ensured that I did not do so.
Mr Virendra Sharma (Ealing, Southall) (Lab) [V]
It is a great pleasure to speak under your leadership, Ms Fovargue. I thank all the people who signed the petition.
I want to speak briefly on two important points. First, my constituents rely on Heathrow airport for jobs and the energy that it brings to the local economy, as do many people in the areas around my constituency. The past 15 months have been extremely difficult for them, and the recovery needs to be meaningful and consistent to save businesses and livelihoods. Local employers need the certainty that a safe return to international travel brings, and they need Government support for investment.
A dedicated red list arrivals facility will make travelling safer and increase confidence that the UK’s only hub airport is supported as a safe travel route. Government commitments to make that logistically and financially viable are needed, and an answer sooner rather than later would ensure that safe travel for millions of people this summer was possible. I have raised in the House the need for Border Force properly to staff entry points, and we can rebuild trust and keep people safe by employing sufficient staff. Infrastructure on the ground should not be a second thought; it needs to be central to our planning.
My second point is about where we support recovery. I want investment in recovery to be made in places that embody our values. We should not be supporting a return to normal, but building back better. Eco-tourism is not exclusively branding; it supports the communities where it takes place. It is not just the preserve of the wealthy; it can save environments, communities and species from extinction.
In supporting protection efforts around the world, good eco-tourism is about preservation and conservation. It is also about animal welfare, and I am proud to have been a parliamentary supporter of Save The Asian Elephants for many years. Its work has done more than any other to shine a light on unethical tourism, and the organisation’s latest petition reached over 1 million signatures last week. I urge all hon. Members present to sign it. Unfortunately, despite our work with STAE, we have not yet been successful in convincing ABTA—The Travel Association to dissociate itself totally from cruel and unethical elephant venues. I hope that when we think about the steps that we are taking to enable holidays and to open up international travel, we put our morals and beliefs at the heart of any strategy.
Sir Robert Neill (Bromley and Chislehurst) (Con)
It is a pleasure to see you in the Chair, Ms Fovargue, and I congratulate my hon. Friend the Member for Don Valley (Nick Fletcher) on securing this important debate.
I very much agree with many of the observations that have been made by hon. Members from different parties. There is an important message that the Government have to grasp and be honest with the public about: if there is a point in the vaccination programme, it is to save lives and to enable a safe return to normality as swiftly as possible. International travel is a part of normality, be it for family reunions, as has been eloquently said—many of us will know it from our constituencies—for tourism or, importantly in constituencies such as mine with a big financial services sector, for business. Nor should we forget cultural and educational exchanges. We must have investment and a clear strategy for getting back safely to that normality. I am grateful to the 220-plus constituents of mine in Bromley and Chislehurst who for a number of reasons signed the petition.
I appreciate the point made by the Chairman of the Select Committee, my hon. Friend the Member for Bexhill and Battle (Huw Merriman). First, we must say that we do not demonise those who seek to go on holiday; secondly, we must give real recognition to the value of the sector to the economy; and thirdly, we must be prepared to invest in technology. I am glad he picked up on the point about the investment in Border Force and the border.
A constituent of mine who works in the travel sector was made redundant and has now set up a small business herself. She is one of the 60%+ people who were working for travel management companies and have been made redundant since the pandemic. In her endeavour to get back on her feet, she points out the very good work being done in technology—artificial design intelligence, for example—by organisations such as VeriFLY seamless travel. The technologies that they have come up with are used in the United States already. They already work with US airlines and have technologies in operation at Denver International airport. They have pilot schemes and have discussed trial schemes with British Airways. We need to get behind and encourage that.
We must deal with the variants by being fleet of foot and adapting. If we can do that by investing in technology, and if, as was said, we can invest in better separation of people coming from different classifications of countries at the terminals, that is a safe means of moving things forward. If we are going to live with the virus or its variants for some time, hopefully with diminished toxicity, the investment is a long-term one that should be worth paying for.
May I also point out the importance of in-bound tourism to the UK? It is, as has been observed, worth about £28 billion in earnings. It is the third largest service export sector. There are real difficulties there because of what appear to be confused guidelines, an arbitrary approach, and a lack of transparency and clarity about the traffic light system and the criteria whereby countries that are sometimes—frankly, taking an objective view —better than us in terms of tackling infection are put on the amber list as opposed to the green one. Also, we need to recognise that the infrastructure of the sector needs to be supported. There is the question of continuing business rates support, for example, for those still operating on the high street. I have seen a firm in my constituency, which had been in business for 30 years, go under. That is a lifetime’s work gone.
What can be done to continue furlough and support on a sector-led basis? We need a new sector-specific scheme of recovery grants for travel agents. We need particularly to be able to look at the position of in-bound operators because they bring in, through travel management companies, some 50% of international visitors to the UK. The loss of that income to towns and cities across the United Kingdom has been estimated at up to £18 billion a year. Let us be frank. Although domestic tourism is worthy and certainly to be encouraged, and we all enjoy it, it will not make up the shortfall because the spend per head of domestic visitors is consistently significantly less—some £239 to £696 a head on average—so that will not plug the gap, and firms and businesses and towns, villages and cities dependent on tourism will suffer gravely and needlessly.
Our European neighbours, including Ireland, are being more supportive of the sector through their support regimes than we are at the moment, and they appear to be more fleet of foot as to how they put in place safeguards for the safe reopening of international travel. We need to learn from that. With the huge success of our vaccination programme, we need to be in front of the pack rather than playing catch-up. We need that for the long-term sustainability of a critical sector for our economy.
Sarah Olney (Richmond Park) (LD) [V]
It is a pleasure to serve under your chairmanship, Ms Fovargue. I congratulate the hon. Member for Don Valley (Nick Fletcher) on securing this important and timely debate.
I will stick to my five minutes by merely supporting what hon. Members have said already, in particular what was said by the right hon. Member for Exeter (Mr Bradshaw) and by the Chair of the Transport Committee, the hon. Member for Bexhill and Battle (Huw Merriman). I support many of their points.
There is no doubt that the Government have lots of difficult decisions to make about how we reopen our travel sector as we come out of the pandemic, which we all hope we are now doing thanks to the huge success of the vaccine roll-out. Many of my constituents are employed in or own businesses across the travel and tourism sectors. I hear from them huge frustration at the lack of clarity surrounding the overall strategy for allowing international travel and reopening the sector. Above all, we need a great deal more clarity on how decisions are being made, in particular with reference to which countries are on the green, amber and red lists.
I share the dismay of the Chair of the Transport Committee at the small number of countries that are on the green list; not knowing the criteria for the lists is causing a great deal of confusion. In recent weeks, we have heard a great deal about India, for example, not being on the red list despite its circumstances being more severe than those in other countries that were on the red list. It is important that we have clarity about why countries are on the red or amber lists.
What is most important for the travel industry is being able to plan and to predict, and to look at conditions prevailing in certain countries and think, “Are they on the way out? Have they got a vaccine programme that they are rolling out? What is the likelihood that we will be able to travel freely to that country in July, August or September?” If we had more clarity about why decisions are being made and when we might be allowed to travel to certain countries freely again, that would make a huge difference.
As the hon. Member for Bromley and Chislehurst (Sir Robert Neill) said, it is not just about the travel industry. We need clarity in order to provide certainty for many sectors that depend on travel. He highlighted in-bound tourism, which is a big issue for people in my constituency and the wider area. My former employer was Hampton Court Palace, and I know how much it depends on visitors from America and Europe, so it is suffering at the moment. It is about our broader economy, as travellers from our business and cultural sectors want to be able to plan for greater reopening in the autumn. Without much better understanding of how the Government are approaching the opening up, it is very difficult.
I want to highlight the issue with testing when people arrive in the country from an amber list country and need to test on day two and day eight. I was appalled to hear from a constituent about the cost of these tests. I had naively assumed that they would be free, as they are for every resident here who needs a test. I cannot understand why we are charging travellers up to £150 for each test. For a family of four who are travelling here and have to do tests on day two and day eight, that is an extra cost of £600.
This petition is about the needs of those who have family, friends and partners abroad. My heart goes out to people who have dying relatives in other countries, which is a situation in which far too many families find themselves. I have many constituents with family and friends in European countries—we have a lot of European nationals in Richmond Park—who are already finding it difficult to travel to those countries, but need to travel at this time because their families are struggling. To have the additional cost of the tests is inconceivable.
If we have a wider strategy to make international travel possible and safe again, it beggars belief that we are charging that extraordinary amount for those tests. I urge the Government to have another look at that. It is not just a barrier for people who are travelling for whatever reason they want to travel now, but it will continue to be a barrier. If it is going to be part of our strategy for opening up, it will be barrier to business, trade and tourism, and we must address that. As such, I urge the Government to look at providing greater clarity about how travel can be made possible, and particularly about the cost of tests.
Nickie Aiken (Cities of London and Westminster) (Con)
It is a pleasure to serve under your chairmanship, Mrs Fovargue, in this important Westminster Hall debate this evening. I thank my hon. Friend the Member for Don Valley (Nick Fletcher) for securing it.
Like other hon. Members, I have recently heard from many constituents on international travel and covid-19 restrictions. With over 1,200 signatories to the petition from within Cities of London and Westminster—my constituency—it is clearly a subject that is close to the hearts of my constituents, and one that should be reviewed in the light of new data. No doubt, we are now in a very different position from the one we were dealing with last year. We now have the tools to facilitate both travel and health, with advancements in testing, as well as the exceptional vaccine roll-out that was quite simply not available 12 months ago. Indeed, so much has changed even since the Government’s response to the petition was published last month, with new data suggesting that the vaccines are effective and working well against the new Indian variant.
I support the Government’s road map, and accept the traffic light system for non-essential international travel. However, when it comes to small-scale, case-by-case travel for the sake of a family unit or critical support network, I believe that there are circumstances in which we could be more pragmatic and reasonable to ensure that people are not penalised for something that could dramatically affect their quality of life. I can see how devastating family separation has been for them. People are finding themselves in hugely emotional situations, and as people get vaccinated and infections fall, one of the things that they want to do first is reconnect with their loved ones, particularly those abroad. After all, love is not tourism.
It is important to note that the issue my constituents are facing is not necessarily the ability to travel abroad. Instead, issues occur when returning to the UK. I do not have time this evening to expound all the cases that constituents have raised with me, but for example, a number of parents have been unable to afford to, or practically be able to, visit their children who are living with a partner overseas, particularly in amber-rated countries. Making parents with custody agreements exempt from hotel quarantine, for example, providing they are vaccinated or comply with testing on their return, would make a small dent in our current guidelines, but have a major impact on people’s lives across my constituency and across the UK.
Some of those parents have not seen their children in person for over a year. That is too long to go without a hug from your mum or your dad, and it would be sensible to adopt an approach for people in such circumstances who cannot afford an up-front payment of £1,750 or take 10 days annual leave away from work in a quarantine hotel. With this in mind, one option could be to open up the manageable payment plan for people who have a reasonable need to travel, not just those who already receive income-related benefits. To the same end, there could be a new assessment of allowing people to isolate at home, or even finding some exemptions for parents who are unable to see their children under the current guidelines.
We have a world-class vaccine programme, which has now administered over 60 million jabs. I absolutely believe that we need to reap the benefits of the vaccination roll-out with open and sensible policies that strike the right balance between safety and real-life situations. This is not to say that there should be carte blanche, but if there is reasonable cause and proof, I see no reason why people should not be able to travel without being subject to undue stress when returning to the UK. I hope the Minister will accept that although we need to remain vigilant as the pandemic continues, we will be living with covid-19 for some time to come, and we should provide responsible but practical help for those with loved ones abroad.
Duncan Baker (North Norfolk) (Con)
Everyone has suffered in this pandemic, and people are still suffering. It affects people, businesses and human relationships when, as we have heard, we are cut off from seeing one another in extremely difficult circumstances, which is difficult to bear. I have become an uncle in the last year, and I have not been able to see my sister’s first child for pretty much an entire year. However, we understand why: it is our effort to suppress this disease. The whole crux of our blunt efforts is to prevent its transmission, which means limiting travel and contact with others, no matter how painful that is and continues to be.
Pretty much every decision is based on necessity and risk. Border movements alone have been one of our toughest sets of rules to get right, and the Government seemingly cannot do right for doing wrong. Should they allow more movement and travel through borders, and risk transmission points, or do we shut ourselves off from the world, perhaps like Japan, Australia or New Zealand did? It is a simplistic idea, and, in reality, it is not really possible for a globally connected international hub of commerce that is home to nearly 70 million people, so we manage the process, as we are doing through the traffic light system. That means there are some harsh decisions that mean visiting families, boyfriends and girlfriends has to be deemed prohibited for just a little while longer.
I agree with the approach that the Government are taking, as hard as that might be, because policing what we have been doing is proving difficult enough. For the moment, relaxing the restrictions even further is a risk too far. Just in the past few weeks we have seen the Indian variant spread at the rate is has done, but we are incredibly close to that point because of our vaccination programme. Quite frankly, what on earth is the point in not allowing movements if we have vaccinated over 60 million people? There are already reasonable excuses to visit family, such as supporting someone after the birth of a child, providing care and assistance, generously being able to go abroad for one’s wedding and, indeed, seeing loved ones for funeral arrangements.
I will end by saying there is a topic that is just as big as this: the international travel industry, which has been mentioned many times. It will need more support. While the restrictions are in force, it is absolutely essential to continue the life support, as we have done with many businesses. My constituent Nick Lee runs Broadland Travel Worldchoice in my North Norfolk constituency, and we understand that the traffic light system may still be in place until 2022, placing enormous restrictions on the 20,000 people working for retail travel agents. Indeed, green list countries for holidays are still very few in number.
As leisure and hospitality receive specific grants, it seems only fair that while the travel industry is still experiencing suppressed trade for at least another year on top of the 18 months that it has already had, we have to consider giving it some specific support. When furlough ends in September and many people will be getting their lives back to normal, the international travel industry, across the sector and the supply chain, will undoubtedly still be getting back on its feet. Without travel agents and all the stakeholders connected to international travel, we will undoubtedly see more bankruptcies.
We have to do something about this situation, so I hope that the Minister will be able to say a little about what we could do for those businesses that still hope to get back on their feet.
James Sunderland (Bracknell) (Con)
It is a real pleasure, Ms Fovargue, to serve with you as Chair, and I apologise for being chronologically challenged.
My contention today is that there is a real policy inconsistency between the success of our vaccination programme and the ongoing caution in our travel sector, and I will make three points, if I may. First, I would urge countries that are successful in their own vaccination roll-outs to open up and send people here, and a negative test result and/or a covid passport should be enough for travel to be fully resumed. Secondly, there is a need for clarity—something akin to the UK road map—around why each country is on which list and when they are likely to be moved between lists. Thirdly, as I said earlier, we need to support those who are employed by the travel sector. As we know, UK airlines have announced over 30,000 job cuts so far. That is devastating, and I suspect that more support is still needed for this important sector, along with support for hospitality and leisure.
To start with, the Government should be commended for the success of our vaccination roll-out programme, which is one of the best vaccination programmes in the world. To put it in statistical terms, as of yesterday there have been 37 million first doses and 22 million second doses—over 60 million in total, as one of my hon. Friends said. It is the best vaccination programme for any country with a population of more than 20 million people, with 89% of all adults having received one or two doses of the vaccine. We need to move as soon as possible to reconnect friends and family across the world who have been unable to spend time together throughout the pandemic.
The speed at which we open up our travel sector is paramount, and we must prioritise business travel to countries where the national vaccination programmes have proved successful, such as the United States, which will lift the burden on our travel sector to a certain degree. And we need one or other countries to be added at this point in time to the green list, too.
The reasons for travel are multifarious, as we have heard. Travel is about leisure, family, business, emergency travel and of course holidays—and why not? In the UK, 76% of people are deemed to have plans to fly abroad in the next 12 months. In 2019, over 21 million trips were made by air for the purpose of visiting friends and family overseas. Also, the figures of the Business Travel Association, whose member travel management companies account for more than 90% of all travel booked in the UK, equate to 6.4 million journeys and 32 million transactions, resulting in £220 billion of UK GDP in a typical year. And that is just by air. These figures are eye-watering and our economy depends upon travel. However, the resumption of business travel can only begin in earnest once the green list is updated. As I mentioned earlier and as I will say again now, it must also include major business hubs, such as New York, Singapore, Frankfurt and Dubai. And that is just a start.
What about Bracknell? My constituency is very important to me. I have 15 travel agency businesses that employ people in Bracknell; my constituents work at Heathrow, Gatwick and beyond; we have hundreds of jobs in the travel and tour operators sector in Bracknell; and there are literally thousands of people who want and need to get away, and that is not next month, but now. We need to open up comprehensively as quickly as possible. And, of course, our country is global; it is part of the international diasporas. It depends upon global trade and global movement, and it is movement that remains essential to getting our economy up and running once again.
To conclude, it is now time to get back to normal. Yes, new variants, such as the Indian mutation, are worrying, but mankind has lived under the spectre of new viruses for centuries and thankfully has mitigated this one with our fantastic vaccination programme. So it is now time to open up safely, and life, as we know it, has to go on.
Yvonne Fovargue (in the Chair)
I thank hon. Members for adhering to the time limits, which allows 10 minutes for each Opposition spokesperson and the Minister. I call Martyn Day.
Martyn Day (Linlithgow and East Falkirk) (SNP) [V]
Thank you, Ms Fovargue. It is a pleasure to take part in this e-petition debate, which calls on the Government to allow international travel to visit partners and family. There can be little doubt that the travel and tourism sector has been the part of our economy hardest hit by the pandemic, and that, of all those wishing to travel abroad, those separated from loved ones have been the most adversely affected.
Often when we think about international travel we think about holidays, so I am grateful to the petitioners, who rightly focus on the need to see loved ones. I know from my own experience how upsetting this can be. My partner’s parents live in Kerala, and we have not been able to visit each other throughout this prolonged period. Now, with India on the red list, who knows when we will physically see Rajamma and Chandran next. Like many other families, we speak daily by video call, but it is simply not the same.
Perhaps the most upsetting component of my constituency case work in this area has been that of separated families requiring international travel to take part in end-of-life visits to hopefully see their loved ones for a final time. In some cases it was not possible. In others it was complicated by quarantine arrangements, all of which made an already difficult situation seem even worse. For a lot of people, the current rules are clearly distressing and there is a need to restore normality to international travel as quickly as possible, but we must be sensible as we do that in the light of the risks that we face and that we see across many parts of the world. We have made so much progress in suppressing the virus and we must not put that at risk now by enabling new variants to enter the country too easily.
The current Scottish position on overseas travel is that earlier this month the First Minister confirmed some changes to the rules on travel from Scotland. From 17 May, Scotland moved to a traffic light system informed by risk assessments prepared by the Joint Biosecurity Centre. Those assessments are based on the state of the pandemic in each country across the world and will include the presence of variants of concern. Anyone entering Scotland from a red list country will still be required to enter a managed isolation hotel and stay there for 10 days. If they arrive from a country on the amber list, they must self-isolate at home for 10 days and take two PCR tests during that period. If they travel from a green list country, they will need to take a PCR test shortly after arrival, but will not be required to self-isolate.
The Scottish Government will of course continue to take the decisions that they consider right for Scotland, and will not sign up to decisions that might put our progress at risk. One area of risk that causes me concern is that UK Border Force has been warning for weeks that it is not sufficiently resourced to handle passengers at the borders. With Border Force officials warning that passengers this summer could face four-hour waits at UK airports due to processing documentation for covid, one Border Force worker has been quoted as saying that
“the truth is that there simply isn’t the capacity for staff to carry out the checks demanded by the government.”
Passengers are reporting that they are waiting at border control side by side with arrivals from red list countries, despite guidance stating that they should be separate. Heathrow airport has said that Border Force is responsible for separating red list passengers in its immigration halls, while the Home Office has said that arrangements for queues and the management of returning passengers are the responsibility of the relevant airport. That blame game needs to be brought to an end, and the Home Secretary needs to take responsibility for those warnings at the border before the summer.
In my opinion, everyone should continue to limit their travel abroad, and when it comes to holidays we should be playing it safe by holidaying at home and supporting our local tourism sector as much as we can this year. In saying that, we must also be cognisant of the thousands of jobs that depend upon international travel—jobs in aviation and the travel sector, and their supply chains. I am told that, pre pandemic, the outbound travel sector employed more than 221,000 people, contributing £37 billion to the UK economy and more than £6.3 billion to the Treasury annually.
In advance of the debate, ABTA wrote to members with its ask for a risk-based restart to international travel, and targeted financial support to see the industry through to recovery—not an unreasonable ask, given how much the UK Exchequer has benefited from the industry in previous years, how badly hit the sector has been, and the likely prolonged delay in international tourism returning to anything resembling normal. However, for many people, overseas travel is not about tourism or holidays but about seeing family and loved ones, and clearly more needs to be done to facilitate that. Family reunion visits should, in my opinion, be prioritised over sightseeing and international tourism, and I commend the petitioners for highlighting that need.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair, Ms Fovargue. I start by thanking the hon. Member for Don Valley (Nick Fletcher) for introducing this important debate on international travel and covid-19, following the e-petition signed by more than 100,000 people. As he set out very clearly, all those people have particular personal circumstances—involving long-term relationships and parents and children—that mean that they are in a very difficult situation. Unfortunately, I think that, with the situation that we have seen with the Indian variant, things are not going to get any easier anytime soon.
I also thank the hon. Gentleman for raising the very important issue of the effect on the travel industry. Like him, I have local independent travel agents in my constituency. It seems at the moment that they are in the worst of all worlds: they have the workload from having to deal with cancellations and rebookings, but they do not have the ability to access additional support funds, and of course they cannot furlough all their staff, so I think that there is an argument for greater long-term support for that particular industry. The hon. Gentleman also raised a very important question about the cost of tests for people re-entering the country—a topic that we will come back to later.
There were a number of very good contributions today. My right hon. Friend the Member for Exeter (Mr Bradshaw) set out several important issues, including the economic impact of this situation on the travel industry and the hundreds of thousands of jobs that rely on it. His most important point was that many countries are allowing in those who are vaccinated without additional checks. At the moment, in the terms of our policy on letting people into this country, no distinction seems to be made between those who are vaccinated and the unvaccinated. It would be useful to hear from the Minister why that is the case.
Most hon. Members talked about the importance of the economics as well as the personal situations. My hon. Friend the Member for Ealing, Southall (Mr Sharma) has a particular interest, given all the employees of Heathrow in his constituency. I think he said that what they really need is clarity and certainty; indeed, a lot of Members referred to that.
As we have heard, the petition calls on the Government to class in-person interaction with family members and unmarried partners as a reason to travel. I am sure that, on a human level, we can all understand that—many of us have not been able to see our loved ones as we would have liked during the lockdowns—especially when we consider that in 2019 more than 20 million trips were made by air out of the UK for the purpose of visiting family and friends. The current situation means new parents not being able to see their families, and grandparents not being able to meet up with grandchildren—actually, many people have not met their new family member for the first time.
The timing of this debate is apposite, given last Monday’s announcement that holidays abroad are no longer illegal, but there are of course, as we have heard, different rules for different countries. It should have been a simple colour-coding scheme—amber, red and green, according to each country’s risk. But of course, as we saw last week, there are as many different interpretations of what amber means as there are countries on that list.
We saw on Tuesday the Environment Secretary saying that people could fly to amber-list countries if they wanted to visit family or friends—something that the signatories of this petition would of course like to see—but then in the afternoon the Health Minister in the other place said that nobody should travel outside Britain this year at all. Later the same day, though, the Welsh Secretary said that some people might consider holidays abroad as essential.
That was three Ministers with three different interpretations in just one day, so it was left to the Prime Minister—the paragon of precision in this place—to clear up any confusion or contradiction at Prime Minister’s questions last Wednesday, when he came up with his own definition that people could still travel in “extreme” circumstances. That, of course, is also open to interpretation, but it does at least set the bar a little higher—until we remember that the new rules that he has actually brought in make it easier for people to travel to amber-list countries.
In fact, it is even easier than that, because if someone returns from an amber-list country, they can halve the time that they spend in self-isolation by paying for an additional test after five days. It is hardly a consistent message when it comes to what extreme circumstances in relation to international travel means. Perhaps the problem is that there is no definitive answer—it is all guidance. We have had issues in the past year where there has not been a clear-cut distinction between guidance and law. The Foreign Office website tells us:
“Whether travel is essential or not is your own decision… Only you can make an informed decision based on your own individual circumstances and the risks.”
That is the nub of the problem: everyone can have their own view on what is essential, which means there is ambivalence at the heart of Government policy, which I am afraid the virus is set to exploit.
We have spent the last year painstakingly legislating for every facet of life where covid could intrude, from when people could leave home or leave the pub to how many people can attend a funeral, yet when it comes to one of the biggest threats to our future prosperity—variants from abroad—this Government are inexplicably and recklessly letting people interpret the rules for themselves. The ambiguity over amber has to end. People should not travel to particular countries. Do not let them—it is not difficult.
I cannot believe that the more than 100 countries on that amber list all have the same level of risk. As Members have said, it is clear that more clarity and transparency are needed about why countries are on that list. One might conclude that it has been left deliberately vague so that the Government do not have to compensate the travel industry for all the cancellations that would happen if there were proper laws in place on restricting international travel. Last week, it was reported that 1,300 flights, carrying up to 54,000 passengers a day—[Interruption.] Ms Fovargue, should I continue?
Yvonne Fovargue (in the Chair)
I think we will pause until the bells have finished.
Justin Madders
Saved by the bell. Although I am not sure whether I am or whether—[Interruption.]
Justin Madders
Thank you, Ms Fovargue. It is almost as if someone does not want me to carry on speaking, but I will not be put off that easily.
We have all seen images from airports of people from red, amber and green countries mixing and standing side by side for hours in conditions where the virus can be transmitted. That makes a mockery of the sacrifices that people have made over the last year. Then, they move through the airport, on to public transport and go back to their homes, without proper controls in place.
I asked the Home Office how many visits had been made to check on people who are supposed to be quarantining at home after returning from abroad. I was told that there is no data on that, because it is an operational matter for the police. In short, the Government do not know whether people are complying with these rules. The Government could be overcompensating that lax approach by having so many countries on the amber list. As the hon. Member for Bromley and Chislehurst (Sir Robert Neill) said, it is not clear how a country gets on or off that list. It seems that putting lots of countries on the amber list is a quick and easy way of solving some of the issues in the rest of the system.
The hon. Member for Richmond Park (Sarah Olney) mentioned the cost of tests for those who have to quarantine at home. Actually, it is not just the cost of those tests but the service that people are receiving that is a problem. Hundreds have had complaints about these firms, which are listed on the Department of Health and Social Care’s website. Some people have either not received their tests or not got them in time. Some have not got their results at all and have been left in limbo.
Last year, some of these private companies did not exist, and some had zero experience in the area they are benefiting from, but with the Government’s open-door policy it seems they can request to be put on the list on the Government website if they declare that they meet the required standards and either they are UK Accreditation Service-accredited or they have applied for accreditation but do not yet have it. As of March, the UKAS website said it had received 80 applications from such companies and had accredited nearly 30 such providers, but many more than that are listed on the Department’s website as providers of day two and day eight testing—when I checked this afternoon, it was 333.
I do not know about the Minister, but I find it astonishing that for one of the most critical parts of our defence against covid we are relying on companies to self-certify that they can do the job, and less than 10% of them have been properly accredited to provide the service. We must get much more rigorous in our testing and ensure that these companies can do the work accurately and safely. Will the Minister update us on how many companies are now accredited and what the Government are doing to investigate how they are operating to ensure that they are doing what they are supposed to do?
Why do these restrictions at the border matter? It is because the emergence of new variants of concern is the biggest single risk to the road map. We have seen outbreaks of South African, Brazilian and now Indian variants in this country and, once again, the Government have been too slow off the mark to deal with the Indian variant. It was first identified back in February, yet travel from India was not banned until more than two months later. During that time, travellers from India came into the UK without any need to quarantine at a hotel. The consequences are now clear in the clusters of outbreaks we see.
There is a suggestion that the Prime Minister delayed adding India to the red list until he decided that he had to cancel his trade visit to India. I suppose we will add that to the long list of questions he will have to answer at the inquiry. If it is true, it is another serious error of judgment from him. In the meantime, will the Minister confirm whether decisions to place countries on particular coloured lists are all to do with health issues and not also trade deals and other such considerations?
We need to get this right now. A comprehensive, easily understood system that does not undermine the gains we have made is necessary. The Government finally decided to introduce a hotel quarantine system only in February, over a year after cases first arrived in this country. That is inexplicable. That they continue with an ineffective system that is clearly not working and is creating the injustices we have heard about today is also inexcusable. They have failed with their inadequate covid border protections. They were late to home quarantining, late to mandatory border testing, late to hotel quarantine and late to add India to the red list. We cannot afford to have the Government be late to fix the ambiguity and confusion over the amber list as well. The public have made huge sacrifices, which must not be undone now by laxity and ambiguity. The Government need to get a grip of the situation as a matter of urgency.
The Parliamentary Under-Secretary of State for Health and Social Care (Jo Churchill)
It is a pleasure to serve with you in the Chair, Ms Fovargue. First, I thank my hon. Friend the Member for Don Valley (Nick Fletcher) for raising this important issue on behalf of the Petitions Committee. I thank all Members of the House who have taken time for this wide-ranging debate: my hon. Friend the Member for Don Valley, the right hon. Member for Exeter (Mr Bradshaw), my hon. Friend the Member for Bexhill and Battle (Huw Merriman), the hon. Member for Ealing, Southall (Mr Sharma), my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), the hon. Member for Richmond Park (Sarah Olney), my hon. Friends the Members for Cities of London and Westminster (Nickie Aiken) and for Bracknell (James Sunderland) Bracknell, and the hon. Member for Ellesmere Port and Neston (Justin Madders). The one thing it did absolutely perfectly was display the complexity of the area and how difficult it is to get to a perfect solution.
I will take from the debate that we all agree that people have made enormous sacrifices, both in the country and out of the country, and that the vaccine roll-out has been a tremendous success. However, I point out that we have not yet reached the under-30 age group. While everybody was lucid about allowing people who had had a vaccination to travel, nobody said anything about those who had not, or what the solution was for them. This debate has ranged from the travel industry to business travel and has covered the Department for Transport, jobs and a wide range of Departments, but at its heart is how we are dealing with family and friends.
The past 14 months have presented huge challenges for all of us, and it is only right that members of the public, like Ms Sinclair, should debate such issues of enormous interest to us. My heart goes out to everyone who, 14 months ago, did not want to spend the past year like this. However, many of the reasons why people make sacrifices, in this country and without, are well known to us all. Last Monday, we took an important move to step 3 of the Government’s road map, in that we removed the provision to stay in the UK. International and leisure travel is slowly—I repeat, slowly—starting again and there is a new traffic light system.
In essence, the petition asks whether family members and unmarried partners should be able to visit their families and partners abroad, specifically regarding the “stay at home” and “stay in the UK” measures, which were in effect until 29 March and 17 May respectively. Under “stay in the UK”, individuals had to have a reasonable excuse to leave the UK. As with all restrictions during the pandemic, no decision has been easy, and none has been taken lightly. Where international travel is concerned, we acted to control the spread of the virus and to reduce the risks of variants being imported and exported. It struck me as interesting that people assume that that is completely possible while exempting people in a whole range of different areas.
I have often argued against the party of the hon. Member for Ellesmere Port and Neston, which has said that we should have a more stringent managed quarantine system. Everyone cannot have everything; we have to have a balanced approach in what we are doing. At the heart of everything is protecting people. We are opening up, but we are going slowly. Where international travel is concerned, we do not want to export or import variants, as I said.
Infection rates have fallen back at points but, crucially, a large amount of the population are not yet vaccinated, so it is vital that we maintain additional restrictions while the programme continues through the cohorts and to counter the risk of import or export. I of course appreciate the desire to see loved ones. I sympathise with those who have not seen partners and family members for a long time. I, too, like everyone else in the Chamber, have constituents who have come to me with such challenges. I recognise how difficult it is for people with family and partners based abroad. The pandemic has presented unprecedented challenges. My thanks go to everyone for their contribution and to all those working in the health service. That is what has allowed us to arrive at where we are today.
Acknowledging instances of those with family members overseas, the “stay in the UK” regulations included a number of reasonable excuses—no one appeared to allude to them—to allow international travel in circumstances where visits could not be delayed. I have had constituents—[Interruption.] I will try to beat the bell. I have constituents who have used those exemptions, which include travel to support someone giving birth, to accompany someone to a medical appointment, to provide care or assistance to a vulnerable person, including those of 70 years or older, a woman who is pregnant or those with underlying health conditions, or to say your last goodbyes at the end of life. So, there have been possibilities; to say that there has been none is just wrong. People could also travel out of the UK to attend their own wedding or civil partnership, or that of a close family member if at least one of the persons getting married or entering the partnership lives outside the UK.
As part of the road map, however, the Government took the prudent decision, informed by the latest data and analysis, not to allow international travel to see family members and partners more generally, however hard that feels. It was not an easy decision. Indeed, it is one of the many tough but necessary decisions taken as we continue to follow the road map out of lockdown. It is about finding a balance between priorities, including the need to save lives and to mitigate another surge in infections, as well as to avoid putting pressure on the NHS.
Those restrictions have bought us time: time to establish the vaccine roll-out and reduce the spread of disease, time to vaccinate front-line staff and care staff, and time to vaccinate care home residents and the most vulnerable. We continue to make good progress. As of 22 May, over 37.9 million people have received their first vaccine, another 22.6 million people have received their second dose and a staggering 60.5 million covid vaccine doses have been administered across the UK, through the enormous efforts of our general practice teams, pharmacists and mass vaccination centres.
Public Health England reports that the UK covid vaccination programme has prevented about 12,000 deaths in those aged 60 or above in England. Furthermore, it has saved 33,000 hospital admissions for those over 65. Restrictions on international travel have helped us achieve these things and have helped protect people so we can move to step 3. It is important that we remain vigilant and continue to manage the risks, so that we do not lose the benefits gained through the efforts thus far. Step 3 includes a cautious, managed return to international leisure travel, which I hope colleagues across the House will embrace.
I will address some specific points raised by hon. Members. When we talk about opening up, it is important to keep in mind that we had the indication only this weekend that the Pfizer and AstraZeneca vaccines were both effective against the Indian variant, so asking us to see into the future is incredibly difficult.
On 17 May, we moved to a traffic light system that categorises countries based on their level of risk to public health and the potential effect of variants of covid-19 to limit the efficacy of the roll-out. Decisions on designating countries to red, amber or green lists and the associated border measures are under constant review, to ensure that we manage the risks. These risks are challenging. They are about the impact on people’s jobs, livelihoods and all those things, but they are predominantly about people’s health and wellbeing, and about protecting people.
The decisions are taken by Ministers, who consider the Joint Biosecurity Centre analysis, as well as wider public health considerations. As I have explained, decisions are under constant review so that we manage the risks. I was glad that the hon. Member for Linlithgow and East Falkirk (Martyn Day) outlined how rigorous this process is and how we are now in better lockstep with our friends across the border.
We are making progress as we journey along the road map, but we have to remain vigilant. Variants continue to pose a significant risk that we are monitoring closely, and action will be taken as necessary to stop the spread. Border measures, including testing and quarantine, continue to help manage the risks. That includes the requirement for international arrivals, except those from green list countries, to take a pre-departure test and isolate for 10 days, either at home or in a managed quarantine hotel if they have come from a red list country, and to take a post-arrival test on day two and day eight.
Several hon. Members talked about testing. From May 15, NHS Test and Trace reduced the cost of tests from £210 to £170, and day two tests for green list countries went down to £88. These costs include genomic sequencing if someone has a positive test. Other private providers are stringently tested to ensure quality, and they are available. PCR tests continue to fall in cost, to around £100 to £120 for a day two test. We expect green arrival tests to be somewhere between £20 to £60. As the market develops, that cost will keep dropping as prices become more competitive, but I gently ask, is the British taxpayer meant to pay for the test for leisure purposes and travel?
Justin Madders
I understand the point that the British taxpayer should not be expected to pay for these tests for leisure purposes. However, a person who goes on to the Government website now does not need to give a reason to receive a lateral flow test, and we know that for a number of sporting events that have taken place, the condition for entry has been tests, which have also been free. There is not any consistency here, is there?
Jo Churchill
As I say, these things are kept under constant review. The Department for Digital, Culture, Media and Sport is testing large-scale events involving large groups of in-country crowds. That is completely different from testing those people who are returning to the country. Measures for these international journeys are essential, and it is vital that we follow what restrictions remain in place.
It is also essential that offers of vaccination are taken up by everybody as soon as possible. We hope that the continued success of the vaccination roll-out, including increased testing capabilities, alongside falling infections and hospitalisations, will allow us to continue to lift restrictions. However, we have to protect our hard-fought gains made over the past few months, and we are taking a cautious approach to opening up international travel, given that the risk from those travelling back from countries with high prevalence or where there are variants of concern is not only to the individual, but to wider society.
Some Members brought up the difference between allowing us to enlarge business travel and travel to visit family, friends and so on. They are, in fact, completely different—I very rarely behave with family and friends as I might in a business meeting, so I would urge a little caution before drawing a comparison between the two. Like everybody else, I feel for travel agents and so on in this time of uncertainty. However, they are supported by Her Majesty’s Treasury and the different interventions that have been put in place. Those things will be ongoing after we open up on 21 June, so long as we keep on the road map, and there is some assistance for businesses going forward.
This is a first step, and more opportunities will come along. It is important to remember that, and to highlight that the Joint Committee on Vaccination and Immunisation looks at the outcome of vaccine programmes on reduced levels of infection, high levels of vaccination, and the transmission risk and variants of concern. I reiterate my sympathy for those who have not been able to visit family and partners, and my thanks to those who have stepped up. Getting to this point has taken remarkable perseverance and resolve, and I am grateful to everyone who has got us here. The collective effort has meant that we can reopen our borders, allowing us where possible to reunite families, loved ones and friends. We must continue this careful approach. It is a risk-based approach, informed by the latest data and scientific evidence and by the abiding need to protect the population’s health and wellbeing, and thereby the economy.
With all this in mind, I believe we have good reason to feel optimistic, although there will be new and unexpected challenges, and there will be some setbacks as well. I have not hugged some of my children for 14 months, and they all live in this country—we have a large family. It is tough, and I get that, but we are doing what we are doing for the right reasons. We are better protected and better prepared to take on those challenges than we have ever been.
Nick Fletcher
I thank all right hon. and hon. Members for their contributions today. My hon. Friend the Member for Bexhill and Battle (Huw Merriman), who is a real champion of the travel sector, made an excellent contribution. I also thank my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill). His point about how valuable inland tourism is for our country is something we should all take note of. I hope that when we do open up, we will welcome tourists with open arms, because £28 billion will really help to get our country back working again. My hon. Friend the Member for Bracknell (James Sunderland) reminded us of how successful our vaccination programme has been, and I thank all who have played their part in making it happen.
I hope the petitioners feel that they have had their voices heard. I personally enjoyed speaking with Katie and Luke, and I wish them all the best in the coming months. I thank the Minister for her understanding of our country’s sacrifice and her compassionate reply. I know, as she does, that every exemption in this country brings with it another infection, and she also mentioned the exemptions that have been allowed. I agree that a balance is difficult, but I also agree with the petitioners that more economical testing would help with that balance, so I look forward to falling costs. Finally, I thank you, Ms Fovargue, for your chairmanship today; it has been a pleasure serving with you in the Chair.
Question put and agreed to.
Resolved,
That this House has considered e-petition 565102, relating to international travel and covid-19.
Written Statements
Intellectual Property Office: Performance Targets 2021-22
(3 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
Unleashing innovation and creativity will be at the heart of the post-pandemic recovery and support British businesses to build back better. The Government’s Research and Development Roadmap sets clear objectives for increasing investment in research and becoming world-class at securing economic and social benefits; inspiring creators, entrepreneurs and start-ups; increasing the flow of capital into firms that are committed to research and development; attracting and retaining talented, diverse teams; making long term commitments to people, places and institutions and collaborating nationally and internationally to deliver world-leading innovation and creativity that achieves world-beating results.
Last year, communities and economies across the world faced unprecedented disruption due to the covid-19 pandemic. At a time of such devastation, we saw the best in British ingenuity. From our leading research institutions to schools and colleges, and from distilleries to Formula One teams, British innovators developed and manufactured life-saving sanitisers, vaccinations and ventilators. These technologies now offer a route out of the current pandemic. By enabling collaboration and incentivising investment, IP will play an important part in beating covid-19 once and for all. We are already reaping the benefits of the IP framework through its impact in mobilising research and development of game-changing vaccines at record speed. Funding by the UK Government has been vital in the rapid development, approval and deployment of vaccines and licensing of IP will be critical in reaching global communities. We can also credit this success to the decades of investment in science and innovation and sharing of knowledge underpinned by the IP system.
The Intellectual Property Office’s ambition is to be the best IP office in the world, by providing excellent IP services, a legislative and policy framework that is world leading and a brilliant place to work. It is transforming its ways of working, its services and the way it engages customers. Thanks to the resilience, creative thinking and team-work of its staff, the IPO stayed open for business throughout the pandemic and switched to digital delivery for many services. Now it needs to build on that to help businesses recover and grow.
This year, it expects intellectual property rights applications to increase by around 25%. To respond to this demand it will grow the work force, and importantly build its culture to match its bold ambitions. It will invest in its service delivery to ensure it can uphold excellent customer satisfaction for the long term.
IP underpins economic growth by incentivising investment, safe-guarding assets and enabling the sharing of know-how in technologies like life sciences and artificial intelligence. IP will help enable Britain to forge an unbeatable competitive advantage, accelerate the transition to net zero energy, beat the pandemic, and drive up innovation and creativity to build back better.
The Intellectual Property Office (IPO) Corporate Plan 2021-22 explains how through its stewardship of the IP system, the IPO will help the UK to become the most innovative and creative country in the world as an independent nation. It will do this through delivering excellent IP services, creating a world leading IP environment and attracting and retaining the best people by making the IPO a brilliant place to work.
As an Executive Agency and Trading Fund of the Department for Business, Energy and Industrial Strategy, the IPO has set targets which are agreed by Ministers and laid before Parliament. I am glad that today I can inform the House that for 2020-21 the IPO’s targets are:
Customer: Average overall customer satisfaction with the IPO of 85% or more in Q4 2021-22.
Future proofing the IP Framework: Consult on changes to patent and copyright law to meet the future challenges and opportunities of artificial intelligence, and present recommendations to ministers by Q4.
Efficiency: Delivering our services efficiently through continuously improving our systems, processes and way of working to make things better for our customers and our people. Our target is to achieve efficiencies worth at least 3.5% of our core operating costs.
The plan includes actions to help businesses recover and grow after the covid-19 pandemic. The IPO’s priorities reflect this and it will review them as the consequences of efforts to control the virus become clearer. It has the ability to adapt its finance and resource models according to emerging trends and will do so through robust quarterly reforecasting. It will also work with BEIS and its other partner organisations to review its priorities regularly, ensuring that it supports wider Government responses to the economic impact of the virus and seek to focus its efforts and resources where they will have the most significant impact driving the UK innovation and creative economy.
[HCWS45]
New Fleet Solid Support Competition
(3 years, 6 months ago)
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The Secretary of State for Defence (Mr Ben Wallace)
Today I am pleased to be able to provide an update on our plans to take forward procurement of the fleet solid support (FSS) ships for the Royal Fleet Auxiliary. The MOD’s FSS programme is delivering three warships essential to the UK’s carrier-led maritime strike group, while assuring value for money for the taxpayer.
Last year I said the new competition would be launched in spring 2021, and today I am pleased to announce that a contract notice has now been issued, inviting companies to register interest in participating in the tender for the design and build of FSS ships.
I am determined that all these ships will be integrated in the UK as well as keen to see British build playing a full or part role in the competition. The competition therefore seeks to maximise UK social value, balanced with the need to deliver value for money, while encouraging investment in domestic shipyards.
This is also an opportunity for British firms to work alongside international partners.
The competition consists of a two-phase process. Phase 1 is focused on the initial design maturity, with phase 2 focused on the manufacture contract negotiation. Contract award is expected to be within two years, following approvals.
[HCWS47]
Expert Panel for Fan-led Review of Football Governance
(3 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Nigel Huddleston)
This statement sets out the full membership of the advisory panel to support the work of the hon. Member for Chatham and Aylesford (Tracey Crouch), as she commences the fan-led review of football.
The panel features fan representation at its heart and includes former players, managers, current administrators, non-league, independent members and representatives of the women’s game. The chair and panel will now begin a series of roundtable meetings that will reach out to fans and governing bodies across the football pyramid to hear their views on the future of football.
Fans are at the heart of our national game and the Government are ensuring their safe return to stadia across the country. Fans will be at the centre of the review, with extensive engagement with the premier league, championship, women’s football, leagues one and two and non-league, as well as community and diversity fan networks.
The chair and panel will canvass fans’ views on ownership, governance and financial flows within the game. In addition, they will assess the need for an independent football regulator charged with implementing regulation and compliance, and how that might work within the existing framework provided by the Football Association, Premier League and English Football League.
The panel announced reflects all parts of the game, and the review of football governance wants to hear that diversity reflected in the views it receives on how our national game can be changed for the better for all fans.
A copy of the membership of the panel will be deposited in the Libraries of both Houses.
Fan-led Review of Football Governance Advisory Panel: the full panel is as follows:
Fans’ representative - Kevin Miles (CEO, The Football Supporters’ Association)
Former footballer - Clarke Carlisle
Commercial expertise - Dan Jones (Deloitte)
Football administration - Prof Denise Barrett-Baxendale (CEO, Everton FC)
Independent - Danny Finkelstein, independent member
Independent/regulation - David Mahoney (COO, England and Wales Cricket Board, formerly Ofcom)
Independent - Godric Smith, Director, Cambridge United
Women’s Game - Dawn Airy, Chair WSL
Non-league Representation - James Tedford, formerly Secretary, Southport FC
Former manager - Roy Hodgson
[HCWS51]
Law Enforcement Records
(3 years, 6 months ago)
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The Minister for Crime and Policing (Kit Malthouse)
Further to my statement to the House on the 18 January and a further written statement on 8 February (HCWS774), this is an update on recovery of the “No Further Action” records deleted from the police national computer (PNC) in error.
Today, I am confirming that the data that was wrongly deleted from the PNC, fingerprint and DNA databases has now been fully recovered. 100% of the deleted records has been recovered and returned to the affected databases.
Over 99% of the data deleted from the PNC was recovered within the previously announced timeline. The remaining records required manual insertion into the PNC, which is a more time-consuming process. Intensive work has been undertaken with our colleagues at the ACRO Criminal Records Office over recent weeks and I can confirm that this work is now also complete.
I want to thank the National Police Chiefs Council, ACRO and the engineers and members of staff across the Home Office who have worked around the clock to make this possible.
I know that members across this House have rightly been eager to understand the operational impact that this data deletion has had while the recovery effort has progressed.
To date, we are not aware of any law enforcement operations that were significantly adversely affected by this incident. However, further work is ongoing to help us understand the full impact now that the data has been fully restored, which is being led by the National Police Chiefs Council.
It is important to reaffirm that no records of convictions were deleted as a result of this incident, and deletions only related to records in cases that occurred prior to 2015.
As set out previously, mitigations were put into place to minimise the impact of the deletion of the data; those mitigations have been effective.
Key amongst those was the ability of the police to continue to conduct simultaneous searches on other unaffected law enforcement systems such as the police national database. Alongside this, the Home Office and our suppliers worked to make the incorrectly deleted DNA profiles available to policing and to reinstate fingerprint records whilst the full capability was being restored.
As well as the data recovery exercise, we have also taken steps to provide additional assurances on the PNC system since the incident occurred. This includes bringing in extra personnel for quality control and ensuring extra checks are in place on all work being undertaken. The Home Office has engaged intensively with policing to strengthen checks on any future updates to law enforcement systems. This includes the development and introduction of new processes and operating models to bolster the checks to ensure an error like this one does not happen again.
The Home Secretary and I commissioned an independent review, led by an external panel chaired by Lord Hogan-Howe, to investigate how this happened and to ensure the necessary lessons are learned to avoid similar incidents in the future. We are extremely grateful to Lord Hogan-Howe and his team for their work.
In line with the commitment made when this review was commissioned, a summary of this review will today be placed in the Libraries of both Houses.
The report confirms the minimal impact that the incident has had on police investigations as well as the criminal justice system more widely and will enable us to address the operational and technical failures that led to this error.
The review sets out a wide range of recommendations for both the Home Office as well as the police to address the underlying factors that led to this unacceptable incident. We have considered these recommendations very carefully and I can confirm both the Home Office and the police have accepted all the recommendations in full and work is already under way to take the necessary steps to respond to the recommendations.
Work will now commence on phase 4 of the recovery effort, which will aim to delete data which should have been deleted but erroneously has remained on the PNC as a result of this incident. I will provide a further update to the House on this work in due course.
[HCWS49]
New Plan for Immigration: Legal Migration and Border Control
(3 years, 6 months ago)
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The Secretary of State for the Home Department (Priti Patel)
On 31 December 2020, freedom of movement between the United Kingdom and the European Union ended. The UK’s new points-based immigration system is now in place and receiving applications. This was a significant milestone which delivered on a key HM Government commitment to the British people to take back control of our borders and put in place an immigration system which works in the interests of our whole United Kingdom.
However, this only marked the beginning of a wider programme of change to radically transform the operation of our border and immigration system.
In March I set out our plans to fix our broken asylum system and build a fair, but also firm, system for dealing with humanitarian protection claims and illegal migration through this Government’s New Plan for Immigration.
Today I am laying before the House a command paper (CP 441) setting out our New Plan for Immigration for legal migration and border control. Together both papers provide a complete picture of the Government’s plan to take back control of our borders and immigration system.
Building on the success of the EU settlement scheme and the points-based system, over the next four years we will implement further reforms to bring more radical changes and benefits to the way all individuals cross the border and come to the UK. This will support the plan for growth and two strands of the Government’s build back better agenda: to build back safer by securing the UK border and ensuring compliance with a new system of controlled immigration, and to build back stronger by supporting the UK’s domestic labour market and attracting the brightest and best global talent to the UK to live, work and study.
The strategy statement I have published today sets out our programme for 2021 and 2022. This includes: further reform to the points-based system, a new graduate visa, new routes to attract top talent to the UK, and a new international sportsperson route, alongside further simplification of our immigration rules to streamline our systems and reduce complexity. We will also be improving the user experience by implementing digital solutions, removing paper from the process and reducing the need to attend application centres. This will lay the groundwork for the full transformation of the border and immigration system in the coming years.
It also outlines our vision for the border and immigration system beyond 2022, with this next phase of our programme being truly transformational for everyone using our systems and crossing the UK border, implementing major elements of HM Government’s published 2025 UK border strategy.
We are moving away from a complex system reliant on people proving their rights through physical documents, sometimes decades old, to a streamlined system which is digital by default. Our goal is to achieve this by the end of 2024. This will make the system quicker, easier and in some cases safer for people applying to come to the UK and proving their rights when in the UK.
Through upstream transformation to our border and immigration system we will also improve our ability to know more about people before they reach the UK border. We will introduce an electronic travel authorisation scheme as part of a wider universal permission to travel requirement for everyone wishing to travel to the UK—except British and Irish citizens. This will support us in our ambition to be global leaders in providing a streamlined and seamless customer experience.
This is an ambitious programme to deliver a world-leading border and immigration system. The plans set out in the strategy statement are essential if we are to have a border and immigration system which will attract highly skilled people, while also strengthening the security of our United Kingdom.
[HCWS46]
Policing of Clapham Common Vigil for Sarah Everard
(3 years, 6 months ago)
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The Minister for Crime and Policing (Kit Malthouse)
On 13 March at Clapham Common, an unofficial vigil took place to mark the tragic death of Sarah Everard. Following the coverage of the policing of the vigil, the Home Secretary—and subsequently the Mayor of London—asked Her Majesty’s Chief Inspector of the Constabulary, Sir Tom Winsor, to conduct a bespoke inspection into the Metropolitan Police Service’s (MPS) handling of the vigil. This was set in the context of the “stay at home” covid-19 regulations in place at the time, which put in place temporary restrictions on gatherings of more than two people save for specific exemptions, to protect the NHS and prevent the spread of covid-19. This included temporarily and proportionately reducing the opportunities for people to exercise their freedom of assembly as part of an organised protest.
Her Majesty’s inspectorate of constabulary, fire and rescue services (HMICFRS) published its report on 30 March. I am grateful to Sir Thomas Winsor and his team for conducting this review at speed.
The report sets out the context for the events of 13 March. Following the death of Sarah Everard, members of Reclaim These Streets proposed to organise a vigil close to where she was last seen. However, after a High Court judgment on 12 March refused an application by Reclaim These Streets, it was announced by the organisers that the vigil would not take place. Members of the public however still attended.
The report’s main findings were that: the inspectorate is satisfied that, on balance, the MPS’s desire for consistency in policing mass gatherings justified its stance towards the vigil; there were three principles why MPS supporting a “covid-19 friendly” event was not a realistic option; and the police’s actions at the event were proportionate. While the vast majority of attendees were peaceful and respectful throughout the vigil, after 6 pm the report found that the event changed and became far more like a rally with dense crowds and little or no social distancing.
The report concluded that the police’s response to the events of the evening was proportionate, even in the face of severe provocations in the later stages of the event by a minority of those present. It also provided operational feedback for the Metropolitan Police Service to consider in relation to improving the communications between commanding officers and those on the ground.
The Government welcome the findings from this report. Officers were policing the vigil in extremely difficult circumstances and the violence and abuse directed towards them by a minority of attendees was unacceptable. The police have a challenging job to do, regularly putting themselves at risk to ensure that the rules are followed, and that people are kept safe. The Government will continue to support the police in carrying out their important work and learning the lessons from the policing of this event.
Finally, I would like to once more offer my sincere condolences to the family and friends of Sarah Everard.
[HCWS48]
Affordable Homes
(3 years, 6 months ago)
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The Minister for Housing (Christopher Pincher)
On 1 April 2021 the Government published responses to two consultations: delivering First Homes and the new model for shared ownership. This statement sets out the Government’s plans for the delivery of First Homes and our new model for shared ownership through the planning system.
This statement issues substantial changes to planning policy which will come into effect on 28 June 2021.
The issues covered in this statement include:
The definition of a First Home
Eligibility criteria for First Homes
Setting developer contributions for First Homes
The remaining 75% of affordable housing secured through developer contributions
Plans, development management and transitional arrangements
Level of discount
Exception sites
Delivering shared ownership homes
Introduction
The Government are committed to supporting people to own their home and make home ownership a reality for households and families. Since spring 2010 almost 709,000 households have been helped by Government schemes, including Help to Buy and Right to Buy, and we are taking steps to increase the supply of new housing. The Government are undertaking the most ambitious reforms to our planning system since the second world war, making it easier to build homes where they are most needed, and the stamp duty holiday, applying to the first £500,000 of property sales, has given a much needed boost to the economy. Ensuring access to home ownership remains a key priority and challenge for this Government. However, rising prices, high deposits and difficulty accessing mortgage finance still mean that far too many people are denied the opportunity to own a home of their own. Polling shows that 87% of people would prefer to own their home given a free choice. Therefore, the Government are determined to ensure that there is an adequate supply and variety of options to help hard-working people on to the housing ladder across England.
First Homes
The Government first consulted on First Homes, the new scheme to provide homes for first-time buyers at a discount of a minimum of 30%, in February 2020. This consultation made proposals around both the design of First Homes and changes to the planning system to support their delivery.
We received nearly 800 responses to this first consultation. There was considerable support for our proposals for a minimum discount of 30% and strong support for proposals to develop a national standard model with discretion for local areas to set their own criteria. Many local authorities, housing developers and business organisations gave very helpful comments about how our proposed changes to planning policy could be introduced and we are very grateful for this. The Government published their consultation response on 6 August 2020, which is available online. On the same day, the Government published a consultation, “Changes to the current planning system”, which included proposals on the detail of changes to planning policy to deliver First Homes. We received nearly 2,400 responses to this second consultation. The Government published their response to the First Homes part of that consultation on 1 April 2021, and a copy of that response will be placed in the Library of the House. It is also available online at: Government response to the First Homes proposals in "Changes to the current planning system" - GOV.UK (www.gov.uk)
After careful consideration of all the responses to both these consultations, the Government are today setting out their plans for the delivery of First Homes, defining the product and changes to planning policy as set out below.
First Homes criteria
From 28 June 2021, a home meeting the criteria of a First Home will also be considered to meet the definition of “affordable housing” for planning purposes. The First Homes criteria mean:
A First Home must be discounted by a minimum of 30% against the market value; and,
after the discount has been applied, the first sale of the home must be at a price no higher than £250,000 (or £420,000 in Greater London).
Local authorities will be able to set a deeper minimum discount at either 40% or 50% and impose lower price caps, if they can demonstrate a need for this through evidence. However, the same level of discount as a percentage below market value must apply to the home each time it is sold in perpetuity, subject to certain specific exclusions, so that communities continue to benefit from the homes for years to come. The discount in perpetuity should be secured through a planning obligation. First Homes should, as a matter of course, comply with any other applicable planning policies and /or building regulations, for example those relating to space, accessibility, energy efficiency or carbon emissions. This includes avoiding the sale of homes as leasehold where this is not necessary.
In order to ensure that suitable mortgages are available for First Homes, local authorities should provide for a mortgage lender enforcing its security over a First Homes to be able to realise the full market value of the property, returning any surplus up to the value of the First Homes discount to the local authority.
First Homes eligibility criteria
First Homes must be prioritised for first-time buyers—as defined in paragraph 6 of schedule 6ZA of the Finance Act 2003 for the purposes of stamp duty relief for first-time buyers—and not be sold to any household with a combined annual income in excess of £80,000 or £90,000 in Greater London. Local authorities will be able to apply additional criteria at a local level. For example, they may wish to set a lower income cap, prioritise key workers who also meet the first time buyer definition and/or specify a particular local connection requirement based on work or current residency. Neighbourhood plans will also be able to apply these additional criteria at neighbourhood level. We do not intend to set out a national definition for key workers or local connections for the purposes of First Homes, but instead empower local authorities to take these decisions in the best interests of their areas and residents.
In recognition of the unique nature of their circumstances, members of the armed forces, the divorced or separated spouse or civil partner of a member of the armed forces, the spouse or civil partner of a deceased member of the armed forces—if their death was caused wholly or partly by their service—or veterans within five years of leaving the armed forces should be exempt from any local connection testing restrictions.
A person who can afford to purchase a First Home without a mortgage should not be eligible to purchase a First Home. As a deterrent against the use of First Homes for investment, all purchasers of First Homes must use a mortgage or home purchase plan, if required to comply with Islamic law, for at least 50% of the discounted purchase value.
If local authorities or neighbourhood planning groups choose to introduce their own eligibility restrictions, these will be time-limited to the first three months from the start date of marketing of the property. Upon expiry of the three-month period, any homes which have not been sold or reserved will revert to the national standard criteria set out above. This is to ensure that homes do not remain unsold if suitable buyers in the local area cannot be found.
To support developers and local authorities in using First Homes we are currently developing model section 106 obligations that can be used to secure First Homes at the planning stage. These will make it easier for developers to meet national requirements, for local authorities to consider imposing their own time-limited restrictions and will protect the interest of mortgage lenders by ensuring they can realise the full market value of the property in defined exceptional circumstances. These model obligations will also contain wording for a model title restriction, which will be recognised by HM Land Registry and will ensure the homes retain their discount in perpetuity.
We are clear that First Homes are intended to be used as a person’s sole or primary residence and should not be used for investment or commercial gain. However, we also recognise that there are occasions when it may be necessary for owners of First Homes to let out their property for short periods of time, especially in response to unexpected life events. Therefore, a First Homes owner can only rent out their home for a maximum period of two years, as long as the relevant local authority is notified. Recognising that certain circumstances require a unique response, local authorities should be willing to grant permissions to rent out for longer periods under the following circumstances: deployment elsewhere, for members of the armed forces; primary caring responsibilities for relative/friend; short job posting elsewhere; redundancy; domestic abuse; and relationship breakdown. This will not affect restrictions on letting a property prescribed by a mortgage lender and permission from them would likely also be required.
Changes to planning policy
In order to support the future development of First Homes, the Government are today also setting out changes to planning policy as set out above and below. These changes will come into effect from 28 June 2021.
Setting developer contributions for First Homes
A minimum of 25% of all affordable housing units secured through developer contributions should be First Homes. This is a national threshold which should be applied for England.
In accordance with paragraph 62 of the National Planning Policy Framework, affordable housing is expected to be delivered on-site unless off-site provision or an appropriate financial contribution in lieu can be robustly justified; and the agreed approach contributes to the objective of creating mixed and balanced communities.
Where cash contributions for affordable housing are secured instead of on-site units, a minimum of 25% of these contributions should be used to secure First Homes. Where a mixture of cash contributions towards affordable housing and on-site units are secured, 25% of the overall value of affordable housing contributions should be applied to First Homes.
Local authorities should already have affordable housing policies set out in their development plan, which will include the amounts of affordable housing to be sought, and the tenure mix of this housing. Paragraph 57 of the National Planning Policy Framework currently states that where up-to-date policies have set out the contributions expected from development, planning applications that comply with them should be assumed to be viable. Under the approach set out in this written ministerial statement, therefore, it is necessary to define the criteria for policy compliance, under which a development is assumed to be viable.
Under the new system, a policy compliant planning application should seek to capture the same amount of value as would be captured under the local authority’s up-to-date published policy. In addition to capturing the same amount of value towards affordable housing as the existing policy, where on-site affordable housing is required, a policy compliant application will have a minimum of 25% of affordable housing units on-site as First Homes.
The remaining 75% of affordable housing secured through developer contributions
The Government recognise the importance of social rent as part of the affordable housing tenure mix. A local authority should prioritise securing their policy requirements on social rent, once they have secured the 25% First Homes requirement. Where other affordable housing units can be secured, these tenure-types should be secured in the relative proportions set out in the development plan.
If an application aligns with a local authority’s up-to-date policy on cash contributions in lieu of onsite provision, then it will be a policy compliant application in that regard.
Local planning authorities should use the most appropriate method available to them to set out how these requirements impact on their current affordable housing tenure mix policies.
Exemptions from requirements to deliver affordable home ownership products
Paragraph 64 of the National Planning Policy Framework sets out that for major development involving the provision of housing, 10% of all homes on site should be affordable home ownership products, unless one of the exceptions applies. First Homes are an affordable home ownership product. Where specific developments are exempt from delivering affordable home ownership products under paragraph 64 of the framework, they shall also be exempt from the requirement to deliver First Homes.
Plans, development management and transitional arrangements
Local plans and neighbourhood plans should take into account the new First Homes requirements from 28 June 2021. Local authorities may therefore need to review the tenure mix for the remainder of the affordable housing that they are seeking to secure. However, we also recognise that there will be a number of local plans and neighbourhood plans that have been prepared based on the existing National Planning Policy Framework and that have reached more advanced stages of the plan-making process. We do not intend that the evidence base for these should be re-opened, thus delaying the plan-making process. The following transitional arrangements will therefore apply.
Local plans and neighbourhood plans that have been submitted for examination[1] before 28 June 2021 are not required to reflect the First Homes policy requirements. Additionally, local plans and neighbourhood plans that have reached publication stage[2] by 28 June 2021 will also not be required to reflect the First Homes policy requirement as long as they are submitted for examination before 28 December 2021. However, reflecting our desire to introduce First Homes requirements at the earliest possible opportunity, planning inspectors should consider through the examination whether a requirement for an early update of the local plan might be appropriate.
Where local and neighbourhood plans are adopted under the aforementioned transitional arrangements, the First Homes requirements will also not need to be applied when considering planning applications in the plan area until such time as the requirements are introduced through a subsequent update.
Where local and neighbourhood plans do not benefit from the aforementioned transitional arrangements, the local planning authority should make clear how existing policies should be interpreted in the light of First Homes requirements using the most appropriate tool available to them.
We also recognise that many developers will have been preparing planning applications under different assumptions. Across all local authorities, the new requirement for 25% First Homes will not apply to sites with full or outline planning permissions already in place or determined or where a right to appeal against non-determination has arisen, before 28 December 2021, or 28 March 2022 if there has been significant pre-application engagement, although local authorities should allow developers to introduce First Homes to the tenure mix if they wish to do so. This transitional allowance will also apply to permissions and applications for entry-level exception sites.
The Government will continue to monitor the effectiveness of these transitional arrangements in the light of emerging economic circumstances.
Level of discount
The minimum discount for First Homes should be 30% from market value, which will be set by an independent registered valuer. The valuation should assume the home is sold as an open market dwelling without restrictions. Where evidence justifies it—in the local or neighbourhood plan, an emerging policy or, where appropriate, a supplementary planning document—the minimum discount in an area can be increased to 40% or 50%.
Where discounts of more than 30% are applied to First Homes, the requirement for a minimum of 25% of the affordable housing units secured through developer contributions to be First Homes will remain in place. The approach to delivering the remaining 75% of affordable housing is set out above.
Community Infrastructure Levy (CIL)
The Government have introduced new Community Infrastructure Levy (CIL) regulations which allow the developers of First Homes to obtain an exemption from the requirement to pay CIL, in line with other affordable housing products. These regulations came into force on 16 November 2020.
Exception sites
A key priority of this Government is to enable as many people as possible to enjoy the benefits of home ownership, and First Homes is a crucial way in which this will be achieved. In order to maximise the number of First Homes made available to those keen to get on the housing ladder, the Government are also seeking to deliver First Homes via exception sites. Exception sites are small sites brought forward outside of development plans in order to deliver affordable housing, and currently consist of rural exception sites and entry-level exception sites.
While the Government support the mechanism of allowing land to come forward outside of the development plan to deliver much-needed homes via exception sites, the entry-level exception site policy has not delivered affordable housing to the extent originally envisaged. Following the consultation, the Government are replacing this policy with a “First Homes exception sites” policy, in order to encourage First Homes-led developments on land that is not currently allocated for housing. Local authorities should support the development of these First Homes exception sites, suitable for first-time buyers, unless the need for such homes is already being met within the local authority’s area. Local connection criteria may be set where these can be supported by evidence of necessity and will not compromise site viability. First Homes exception sites should be on land which is not already allocated for housing and should:
a) comprise First Homes, as defined in this written ministerial statement.
b) be adjacent to existing settlements, proportionate in size to them, not compromise the protection given to areas or assets of particular importance in the National Planning Policy Framework[3], and comply with any local design policies and standards.
A small proportion of market homes may be allowed on the site at the local authority’s discretion, for example where essential to enable the delivery of First Homes without grant funding. Also, a small proportion of other affordable homes may be allowed on the sites where there is significant identified local need.
While the Government want to ensure that home ownership is available to as many people as possible, we recognise that certain rural areas face particular challenges in terms of affordability, and that rural exception sites can be very effective in addressing the lack of affordable housing in these areas. As such, the Government have decided that in designated rural areas[4], which includes some of the more constrained and expensive regions of the country such as national parks and areas of outstanding natural beauty, rural exception sites will remain as the sole exception site which can come forward. Elsewhere, First Homes exception sites and rural exception sites can both come forward.
Delivering shared ownership homes
This Government believe shared ownership has a vital role to play in supporting people from all backgrounds to become homeowners. By purchasing a share of a property, aspiring homeowners can overcome the income and deposit barriers that can stand in their way. This is why the Government are making shared ownership work better by introducing a new model for shared ownership which will be delivered through grant funding and through the planning system.
On 28 August 2019, we ran a discussion paper to consult on several proposed changes to the shared ownership model. In the Government response to the consultation, published in September 2020, we confirmed the outline of the new model of shared ownership and committed to set an expectation for shared ownership homes secured through the planning system to be based on the new model.
The new model for shared ownership: technical consultation, which ran from 19 November to 17 December 2020, set out further details of the new model of shared ownership, including the proposal that we will expect all shared ownership homes delivered through obligations under section 106 of the Town and Country Planning Act 1990 to be based on the new model. We consulted on potential transitional arrangements.
We are today confirming that this expectation will come into effect from 28 June 2021. The principal changes to the shared ownership model are summarised as follows:
i) Minimum share to be purchased
The minimum share for initial shared ownership purchases will be lowered to 10% from the current 25%. The maximum share at initial purchase will remain unchanged at 75%.
ii) The purchase of further shares (“staircasing”)
New shared owners will be able to staircase in 1% increments for 15 years enabling shared owners to purchase up to 15% through this route. This option will be accompanied by reduced fees. It will still be possible to staircase in larger increments with the minimum additional share purchase reduced from 10% to 5%. Shared owners wishing to staircase in 5% increments or more will have to pay the range of fees as currently, such as a valuation fee, legal and mortgage costs as appropriate.
iii) Shared ownership resales
The new shared ownership model will end the provider’s resale nomination period at the four week point if they wish to pursue a sale on the open market.
iv) Responsibility for repairs and maintenance
The new shared ownership model introduces a new 10-year period during which the shared ownership leaseholder will receive support from their landlord with the cost of repairs and maintenance in new build homes. Only after 10 years will the shared owner take on full responsibility for any repairs and maintenance costs. This 10-year period is in addition to any repairs or maintenance covered by the new build warranty to cover any works required that the warranty does not cover.
v) Shared ownership lease term
All new leases must be issued with a minimum lease length term of 990 years. These longer leases will provide long term security for shared owners and save them from paying for multiple lease extensions.
We believe these reforms will make the scheme more consumer friendly, easier to access and fairer, leading to a better experience for a future generation of shared owners.
The Government response to the new model for shared ownership: technical consultation, which we published in April 2021, sets out further details on these changes. You can also consult the Homes England Capital Funding Guide 1. Help to Buy: Shared Ownership - Capital Funding Guide - Guidance - GOV.UK (www.gov.uk), or the GLA Capital Funding Guide for homes in London, for further guidance on how to implement Shared Ownership.
Later this month, Homes England will publish a model lease which can be used as a basis for leases under the new model of shared ownership.
We recognise that many developers will have been preparing planning applications under different assumptions. The new requirement for the new shared ownership model will not apply to sites with full or outline planning permissions already in place or determined or where a right to appeal against non-determination has arisen, before 28 December 2021, or 28 March 2022 if there has been significant pre-application engagement, although local authorities should allow developers to introduce the new shared ownership model if they wish to do so.
The local and neighbourhood plan transitional arrangements set out above for First Homes also apply to the new requirement for the new shared ownership model.
[1] Regulation 15 of the Neighbourhood Planning (General) Regulations 2012 for Neighbourhood Plans, and Regulation 22 of Town and Country Planning (Local Planning) (England) Regulations 2012 for Local Plans.
[2] Regulation 14 of the Neighbourhood Planning (General) Regulations 2012 for Neighbourhood Plans, and Regulation 19 of the Town and Country Planning (Local Planning) (England) Regulations 2012 for Local Plans.
[3] i.e. the areas referred to in footnote 6 of the National Planning Policy Framework. First Homes exception sites should not be permitted in national parks (or within the Broads Authority), areas of outstanding natural beauty, land designated as green belt, or areas designated as rural under section 157 of the Housing Act 1985.
[4] As set out in annexe 2 of the National Planning Policy Framework
[HCWS50]
House of Lords
Arrangement of Business
The Lord Speaker (Lord McFall of Alcluith)
My Lords, the Hybrid Sitting of the House will now begin. Some Members are here in the Chamber, others are participating remotely, but all Members will be treated equally. I ask all Members to respect social distancing and to wear face coverings while in the Chamber, when speaking. If the capacity of the Chamber is exceeded, I will immediately adjourn the House. Oral Questions will now commence. Please can those asking supplementary questions keep them to no longer than 30 seconds and confined to two points. I ask that Ministers’ answers are also brief.
Social Housing
(3 years, 6 months ago)
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Lord Shipley
To ask Her Majesty’s Government what plans they have to increase the number of social housing homes for rent.
Lord Shipley (LD) [V]
My Lords, I remind the House of my register of interests and beg leave to ask the Question standing in my name on the Order Paper.
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
We have confirmed £12 billion over the next five years, which will be the largest investment in affordable housing in a decade. This includes our new £11.5 billion affordable homes programme; around half of its delivery will be for social and affordable rent. We expect our new programme to deliver around 32,000 social rent homes, double the number of the current programme.
Lord Shipley (LD) [V]
I thank the Minister for his reply. House prices have been rising steadily because of demand-side subsidies by the Government for owner-occupation, yet the National Housing Federation estimates that almost 4 million people need the security of a home for social rent because they cannot afford to buy. I ask the Minister whether he thinks that the Government have got their priorities right.
Lord Greenhalgh (Con)
My Lords, of course I think that we have got our priorities right. We are focusing on building homes of all types and tenures. That includes affordable and social rent and, importantly, giving people the opportunity to buy and own their own home.
Lord Whitty (Lab) [V]
My Lords, will the Minister also recognise that what is aggravating the lengthening waiting lists and undermining any future social housing target is a net loss of existing social housing stock, due to sales on the open market by certain social landlords; demolitions masquerading as regeneration, resulting in a net loss of social housing; and developers wriggling out of their commitment to social housing quotas? What are the Minister and the Government going to do about those factors?
Lord Greenhalgh (Con)
My Lords, I have set out our programme, which is designed to increase the amount of social rented homes. I also point out that, over the last decade, the number of social homes has remained broadly static at around 4 million households.
Baroness Grender (LD)
Does the Minister accept that, if house prices rose by 2.1% in April—the highest monthly increase since 2004—making homes more affordable is simply not working? Those 4 million who are waiting for homes deserve a better answer. If this Government are all about levelling up, why are all the subsidies currently pushing up house prices? Would levelling up not be more achievable and better value if a greater subsidy were redirected into social housing?
Lord Greenhalgh (Con)
It is not all about demand-side subsidies. We have pointed out that the Government are committed to increasing the supply of affordable housing and are investing over £12 billion in the affordable housing programme over the next six years, which is the largest investment in affordable housing in a decade.
Lord Young of Cookham (Con)
My Lords, we all agree that more social homes should be built and I welcome my noble friend’s statement, but does he agree that, for every one family housed in a newly built home, roughly eight are housed in the relet of existing stock? In addition to building more new homes, will my noble friend promote home ownership schemes for existing social tenants who want to move out and buy, thus freeing up a home for those in housing need?
Lord Greenhalgh (Con)
I agree with my noble friend that social mobility and social housing are critical, and that social housing can and should be a springboard into home ownership. We will look at promoting many of the schemes that he outlines, including our offer for shared ownership.
Baroness Prashar (CB) [V]
I declare my interest as a trustee of the Nationwide Foundation. The Affordable Housing Commission found that 72% of social landlords are concerned that the Government’s planning reforms could lead to fewer social rented homes. Given that social housing is one of the best ways of reducing poverty, will the Minister agree that any proposed planning reform should ensure that social rented accommodation is not only protected but its availability increased?
Lord Greenhalgh (Con)
My Lords, I do not accept that characterisation of our planning reforms. They look to simplify the developer contribution through a new infrastructure levy that I am sure will capture the land value uplift so that that can be put into social and affordable housing.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I refer the House to my relevant interests as set out in the register. Can the Minister explain why, when asked about social housing, he often refers to affordable housing? They are not the same thing. We need a greater percentage of government spend on social rented homes to address the chronic shortage of homes for people on low incomes. Many of the affordable homes he talks about are just not affordable for these people.
Lord Greenhalgh (Con)
My Lords, I was very clear in my original reply that this programme will deliver approximately double the number of social rented homes, but there are also ways to provide subsidised housing that gives a discount on the market price, which is the definition of affordable rent.
Lord Goddard of Stockport (LD)
Following on from the noble Lord, Lord Kennedy, by centrally imposing an assumption that around 50% of the programme will be used for home-ownership schemes, the Government are preventing local authorities and social housing providers delivering what is most needed: social housing for rent, including accessible and adaptable homes. Will the Minister consider the case for expanding the social rent element of the programme to reflect the ability of families to pay their rent, especially those with disabled members, who are much more likely to live in relative income poverty than those without?
Lord Greenhalgh (Con)
My Lords, I have already explained that the current programme looks to deliver far more socially rented homes. That definition of affordability takes into account relative county earnings so that these homes are genuinely affordable.
Baroness Uddin (Non-Afl)
My Lords, echoing the words of the noble Lord, Lord Young, does the Minister agree that family housing has been in short supply in major new developments, where the building of smaller units has meant that families are continuously in need of proper housing? Will he therefore ensure that all future developments take this on board? Will the Minister also ensure that units for people with disabilities are made to the highest possible standard? My own experience on visiting these is that often, they are not.
Lord Greenhalgh (Con)
My Lords, I accept that this should not always be about a drive for volume and that we need quality, decent-sized family housing and to ensure that we have the homes we need for people with particular disabilities.
Baroness Gardner of Parkes (Con) [V]
Are the Government considering setting aside a portion of the affordable homes programme funding announced by the Chancellor in March 2020 specifically for more social housing? My interest is declared in the register.
Lord Greenhalgh (Con)
My Lords, we have set out a distinct part of the programme to deliver more social rented housing. We are looking to deliver some 32,000 units over the course of the programme.
Lord Best (CB) [V]
Has the Minister considered the Affordable Housing Commission’s proposal for a fund to enable private landlords who want to exit the market to sell to housing associations or councils, which can carry out the necessary upgrading and re-let the property at affordable social rents, thereby achieving a much-needed increase in social renting and saving public funds spent on unsatisfactory temporary accommodation, while rescuing private landlords who want to sell up?
Lord Greenhalgh (Con)
My Lords, the Affordable Housing Commission’s September report proposed a fund to support social housing landlords to acquire both existing private sector stock and new-build stock from private developers. Through the affordable homes programme, we already allow social housing providers to use grants to acquire from developers market-sale properties that are above their existing planning requirements.
Lord Davies of Brixton (Lab) [V]
My Lords, the Minister’s initial Answer was a masterpiece in obfuscation—he referred to affordable housing, but the Question quite clearly relates to social housing. The Minister has also referred twice to 32,000 additional social housing units. May I draw his attention to the relative success of the Conservative Governments in the early 1950s, when they built more than 200,000 social housing units? They did so because they gave a leading role—the powers and the finance—to local authorities. What we need is a thoroughgoing council housing programme to get the number of social houses that we require.
Lord Greenhalgh (Con)
My Lords, in the last 10 years we have built more affordable homes than in the previous 10. We have seen around 148,000 homes built specifically for social rent in the last decade, and through this programme we are proposing to build more. The real revolution that has occurred is in the number of council homes: councils have built 29,993—nearly 30,000—affordable homes in the last decade, up from a paltry 2,994 over the previous 13 years. That is a record to be proud of.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, all supplementary questions have now been asked.
Fire Safety: Leaseholder Bankruptcies
(3 years, 6 months ago)
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The Lord Bishop of St Albans
To ask Her Majesty’s Government what assessment they have made of the (1) current, and (2) future, incidence of leaseholder bankruptcies attributable to remedial fire safety works and interim fire safety costs.
The Lord Bishop of Blackburn
My Lords, on behalf of my right reverend colleague, I ask the Question standing in his name on the Order Paper.
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
It is not possible to make such assessments because it will depend on a professional fire risk assessment of individual buildings and the extent to which costs might be met by or recovered from developers, contractors or building warranties. In addition, we are unable to assess the potentially wide range of individual factors that could lead to people either losing their home or declaring bankruptcy due to additional costs.
The Lord Bishop of Blackburn
I thank the Minister for his reply. The Institute of Residential Property Management estimated the cost of non-cladding fire safety defects as between £26,000 and £38,000 per lease, depending on the height of the building. These are huge costs that will bankrupt residents, even within the Government’s grant and loan scheme. Will the Government consider including these specific defects in the provisions to exclude ordinary upgrade and maintenance costs in their forced loan scheme?
Lord Greenhalgh (Con)
My Lords, I point out that our approach prioritises action on the risks of unsafe cladding, which is what accelerates fire. The costs for remediating this, and the risk posed by it, are high. We are putting in unprecedented sums to cover those costs.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, when does the Minister think the Prime Minister will take action to honour the promise he made in the House of Commons, when he said:
“We are determined that no leaseholder should have to pay for the unaffordable costs of fixing … defects that they did not cause and are no fault of their own”?—[Official Report, Commons, 3/2/21; col. 945.]
Lord Greenhalgh (Con)
My Lords, the Government have now committed more than £5 billion to the remediation of unsafe cladding. That will ensure that remediating the most risky element of a building will be covered in its entirety for those in high-rises and a substantial part of it for those in buildings of medium height.
Lord Mackenzie of Framwellgate (Non-Afl) [V]
My Lords, living in accommodation of whatever height with flammable cladding and other fire hazards is not the residents’ fault; they are the victims. Four years after Grenfell, does the Minister accept that natural justice requires speedy government action to right this appalling wrong and make these homes safe, with the bill being paid by those whose culpable negligence caused the problem in the first place?
Lord Greenhalgh (Con)
My Lords, I accept that leaseholders are victims and recognise the need to strengthen redress so that we can go after the people responsible for the shoddy workmanship. That is something we will bring through as we announce the building safety Bill shortly.
Lord Moynihan (Con)
My Lords, I would be grateful if my noble friend could update the House on any progress the Government have made to ensure that developers contribute to building safety remediation costs.
Lord Greenhalgh (Con)
My noble friend is right. We believe that developers should contribute and make buildings safe without passing the costs on to leaseholders. There have been a variety of announcements by developers: Bellway has announced a cladding removal fund of £46.8 million, Persimmon one of £75 million and Taylor Wimpey has pledged £125 million. The Government have also announced a gateway levy on high-rises, as well as a developer tax that will raise £2 billion over 10 years.
Baroness Pinnock (LD) [V]
My Lords, I refer the House to my relevant interests. Given the answer to the previous question, will the Minister provide any valid reasons at all for the Government expecting innocent leaseholders to pay the huge costs of remediating cladding and non-cladding fire safety defects, while those who created the problem—the developers he just mentioned—get off virtually scot free?
Lord Greenhalgh (Con)
My Lords, we are very clear that we expect building owners to make buildings safe and not to pass on costs to leaseholders where possible. We have provided a substantial sum of money to ensure that the costs of cladding will be affordable for those in medium-rises and that those in high-rises will not have to contribute to the remediation of the most dangerous element of the building.
Lord Singh of Wimbledon (CB) [V]
My Lords, the Government’s promise of a building safety Bill to reduce the possibility of future Grenfell-type disasters is welcome, but does the Minister agree that it is an acknowledgement of past national failure to ensure adequate fire safety standards, and that it should be the responsibility of the Government rather than of individuals to meet the cost of urgently needed safety improvements to existing property?
Lord Greenhalgh (Con)
My Lords, I recognise that this crisis has built up over many decades and that the Government have a duty to step forward and help to a degree, but we must recognise that government funding does not absolve building owners of their responsibility to ensure that their buildings are safe. They should protect leaseholders where they can.
Lord German (LD)
My Lords, the Government have said that they need £15 billion for the remediation of wall cladding. As the Minister rightly said, the Government are putting in £5 billion, but the levy they are seeking to raise from developers will provide only £2 billion over 10 years. It is capped at that sort of figure. When and how will the gap be filled?
Lord Greenhalgh (Con)
My Lords, I have mentioned the provisions made by major developers, which run into many hundreds of millions. The Government have also instituted a proposal for the gateway 2 levy. We need to watch this very carefully, but we have already committed more than £5 billion, which is an unprecedented sum, to make these buildings safe.
Lord Alton of Liverpool (CB) [V]
My Lords, I will take the Minister back to what he said about the role of developers. Following the United Kingdom’s departure from the European Union and the changes to public procurement rules, what consideration have the Minister and the Government given to banning developers which refuse to mediate their own defective buildings from bidding for public contracts?
Lord Greenhalgh (Con)
My Lords, obviously we take into account whether developers are good partners. There are many national schemes they will want to access for their businesses. We monitor very closely the number of defective buildings and whether the developers step up and contribute. That will be a factor in their future relationships with government at every single level.
Baroness Fox of Buckley (Non-Afl)
Will the Minister acknowledge that, by kicking this scandal down the road, the political crisis surrounding who pays for fire safety defects has not gone away but intensified, while the financial demands on blameless home owners who are unfortunate enough to be leaseholders are escalating way beyond cladding? Will the Minister specifically investigate the spiralling costs of the enforced requirement for waking watch patrols provided by private security firms, whose efficacy is, to say the least, contested? I note that the average cost to individual leaseholders is an extra—unaffordable—£400 a month even before the huge remediation bill drops through the letterbox.
Lord Greenhalgh (Con)
My Lords, I was asked to carry out a waking watch review on behalf of the Secretary of State some months ago. The noble Baroness is right that it is a significant cost for leaseholders. This is why we created the £30 million waking watch relief fund, which will help between 300 and 400 buildings put a fire alarm in place and benefit between 17,400 and 26,520 leaseholders, who will no longer have to pay those high interim costs for waking watches.
Lord Stunell (LD) [V]
During the passage of the Fire Safety Bill, the Minister repeatedly assured your Lordships that measures to protect leaseholders from cladding remediation costs would be coming forward in the building safety Bill and so would be out of place in that Bill, and at his fourth attempt, a majority of the House gave him the benefit of the doubt. Can he now confirm that the draft building safety Bill will be amended by the Government to achieve that comprehensive protection for leaseholders, or will he again leave it to your Lordships’ House to do it for him?
Lord Greenhalgh (Con)
My Lords, I will not pre-empt the publication of the building safety Bill, save to say that we recognise the importance of strengthening redress, otherwise the bill will fall either on the taxpayer or the leaseholder. That redress issue is being addressed in the Bill.
Lord Wigley (PC) [V]
My Lords, I declare my interests as set out in the register. Would the common-sense way out of this problem not be for the Government to buy out those leaseholders facing bankruptcy and, when the premises have been made safe, to let them to the thousands of people wanting rented accommodation?
Lord Greenhalgh (Con)
I thank the noble Lord for that creative idea. We will take it away and ponder it. In reality, we must recognise that the only three ways of helping leaseholders are by providing an additional grant, providing a financing scheme—of which we will provide details—or levelling a tax on the polluters, namely the developers that caused this problem in the first place.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, all supplementary questions have been asked. We now move to the next Oral Question.
Post Brexit: Small Service Businesses
(3 years, 6 months ago)
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Lord Aberdare
To ask Her Majesty’s Government what assessment they have made of the impact of the United Kingdom’s departure from the European Union on small service businesses dependent on mobility between the United Kingdom and the European Union; and what support they have offered to such businesses to preserve their incomes and jobs.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the Government are committed to supporting SME owners from all parts of the UK. My colleague, Minister Scully, recently formed an SME action group, which meets regularly to discuss key issues. The EU-UK Trade and Cooperation Agreement supports small services businesses, ensuring that many business visitors can stay in the EU for 90 days of any six-month period without requiring a work permit. BEIS is currently expanding GOV.UK guidance on member states’ immigration systems.
Lord Aberdare (CB)
My Lords, numerous small UK providers of cross-border services, based in the EU, EFTA and the UK, have found their businesses under existential threat following Brexit, including IT consultants, translators, exhibition organisers, tradespeople, sailing-holiday providers, ski instructors, journalists, artists and, of course, musicians, to name just a few. They find it hard to get clarity on the rules now governing their activities or on where to get help to resolve issues. What guidance can the Minister offer to such service providers to help them find ways of saving their businesses and their livelihoods, and will the Government consider setting up something similar to the EU’s Your Europe Advice and SOLVIT services to support them?
Lord Callanan (Con)
The noble Lord makes a good point. This is a complicated area. We are upgrading existing GOV.UK guidance on the immigration systems of EU and EFTA member states to help businesses adjust to the new requirements. The first tranche of these guides is available now, and from 1 January 2021, for short stays of up to 90 days in any 180-day period, UK nationals will not need a visa when travelling to and within the Schengen area to undertake a limited range of activities.
Lord McCrea of Magherafelt and Cookstown (DUP) [V]
Now that a free trade agreement with the EU is in place that enables the selling of equipment into Europe, what discussions have been held that would aid the removal of the 90-day restriction that is an impediment to UK experts being able to service the equipment or machinery that has been sold?
Lord Callanan (Con)
I understand the noble Lord’s concerns but we have reached a balanced deal with the EU similar to the EU’s agreements with Canada and Japan, and the TCA is the basis of our agreement, so I am sorry to tell him that this will not be renegotiated.
Baroness McIntosh of Pickering (Con)
I declare an interest as I practised European law in Brussels. Can the Minister explain the situation regarding the freedom to provide services, in particular family law, under the EU-UK Trade and Cooperation Agreement? I understand that this is not covered. What would the situation be if a solicitor or an advocate in this country wanted to represent a member of the family living in the European Union? How would the agreement apply to that? Also, can the Minister and his department urgently address the availability of insurance for small firms and solicitors post Brexit and post Covid?
Lord Callanan (Con)
As my noble friend is aware, legal services are subject to separate international agreements. The details of how that will apply across member states are complicated, so it is best for me to write to her.
Lord Berkeley of Knighton (CB) [V]
My Lords, does the Minister understand how grave the mobility problem is for the musical community, many of whom have earned nothing for the last year and are now struggling with piles of forms and visa fee demands? Did I understand him to say that they could work and be paid in that 90-day period? Illness often means that, in both directions, players and singers must be able to move at short notice.
Lord Callanan (Con)
As the noble Lord is aware, having raised this a number of times, we are working closely with the music industry to help musicians adjust to the new trading relationship. Bilateral conversations have established that some touring activities are possible and, under certain conditions, without visas or work permits being required. We have created landing pages on GOV.UK to provide guidance to musicians on these areas.
Lord Stevenson of Balmacara (Lab) [V]
Further to the question from the noble Lord, the TCA contains no overarching agreement with the EU on short-term work relating to our creative industries and, despite what the Minister says, no bilateral or reciprocal agreements are being signed at the moment. What assessment have the Government made of the impact that this will have on our services trade, which in 2019 was worth over £534 billion?
Lord Callanan (Con)
As I said, we are working closely with the sector and across government to consider how we can help resolve these issues. I understand the noble Lord’s point. This has been very damaging to the creative industries. It is hard to quantify the impact at the moment. Given the pandemic, not many people are travelling anywhere, but we will monitor the situation closely.
Baroness Ludford (LD) [V]
My Lords, the noble Lord, Lord Frost, admitted last week to our European Affairs Committee that the Government rejected the EU’s offer of a visa waiver system whereby arts and culture workers, such as musicians, could tour on the continent without a mass of red tape. The Government now seem to be trying to reach bilateral deals with individual EU countries, but this may well be blocked by Brussels. What effective strategy do the Government have to give mobility to a sector worth billions to our economy?
Lord Callanan (Con)
The proposals from the EU were complicated and would not have resolved many of these issues, so the noble Baroness should be wary of believing some of the propaganda she reads. We tried to reach a comprehensive agreement, but our proposals were rejected by the EU. I know that she will find this hard to believe but that is what happened in practice.
Lord Bilimoria (CB) [V]
My Lords, the nuances of the TCA mean country-by-country understandings for business travel. The CBI, of which I am president, welcomes the recently published guidance from the Government. However, do the Government agree that, as travel restrictions ease, government support should be provided to help businesses, particularly SMEs, navigate these complex new requirements? Do the Government also agree that the UK and the EU should work together to make these processes as efficient as possible?
Lord Callanan (Con)
I agree with the noble Lord, and we are doing exactly that to support SMEs. The Government have announced a £20 million SME Brexit support fund. We have also established a network of 38 growth hubs to support businesses, one in each local enterprise partnership area in England, and will continue to offer whatever support we can to business.
Lord Hain (Lab) [V]
My Lords, already hit by Brexit and Covid, small businesses have suffered a decline in their post-Brexit exports because of increased paperwork and shipment delays. The Federation of Small Businesses found that by the end of March, almost a quarter had suspended sales to Europe. Some companies have given up on trade with the EU or Northern Ireland altogether. Can the Government urgently use the provisions of the trade and co-operation agreement to ease post-Brexit burdens on small businesses?
Lord Callanan (Con)
Of course; we are more than interested and keen to ease burdens as much as possible. It requires a willing partner on the EU side to engage in constructive discussions, but we will continue attempting that.
Baroness Bull (CB)
My Lords, the increased costs and complexity of post-Brexit touring, about which we have heard, are particularly acute for the many micro-businesses in the cultural sector which do not have access to the resources or specialist skills needed to navigate multiple regimes in EU states. Can the Minister say what further discussion there has been about the establishment of a new creative export office to provide expert advice and support since Ministers first mooted the idea in February? Can he say what the remit of this office would be?
Lord Callanan (Con)
The noble Baroness makes some very good points, and I know that she has raised this point about the provision of services before. Regarding the creation of the creative export office, I will speak to my colleagues in DCMS who have responsibility for this and write to her with the details.
Lord Rooker (Lab) [V]
My Lords, I told my colleagues that I would try to sweep up any questions the Minister did not answer, but I have so many to choose from that it is difficult. However, in at least two of his answers, he has been very critical of the EU. In answer to the noble Baroness, Lady Ludford, he implied that the EU was not being sincere or constructive in practice and, in his answer to the question from my noble friend Lord Hain, he said that the EU is not a willing partner in discussion. We cannot carry on like this. We have left the EU. That is it: we have left. The consistent inability to do deals, to talk to the EU and to accept that it might be a willing partner and that the problem might be with us is very difficult. Will the Minister try to answer those two questions again please?
Lord Callanan (Con)
As I said to the noble Baroness, Lady Ludford, the UK’s proposals on input from the sector were repeatedly rejected by the EU and the EU’s proposals would not have addressed many of the sector’s concerns. They were non-binding and did not include touring.
Baroness Harris of Richmond (LD) [V]
My Lords, some members of the local business association in my town of Richmond are reporting that Brexit has driven up running costs by 10% to 15% since January. Can the Minister tell me how they are supposed to stay competitive in the global marketplace and where the much-promised level playing field is?
Lord Callanan (Con)
The level playing field in the context of the TCA refers to horizontal regulations governing business. In areas of competition, labour and environmental and climate law, our regulatory environment will no longer be determined by EU rules. We are free to set our own policies and, with the will of this House and the other place, we can make ourselves as competitive as we possibly can by adjusting those regulations.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, all supplementary questions have been asked. We now move to the fourth Oral Question.
Environmental Land Management Schemes
(3 years, 6 months ago)
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The Earl of Devon
To ask Her Majesty’s Government what progress they have made towards developing environmental land management schemes.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, I declare my farming interests as set out in the register. Our approach to environmental land management is the cornerstone of our new agricultural policy. Work to deliver the schemes continues at pace. In March 2021, Defra published plans for piloting the sustainable farming initiative, which opened for expressions of interest. All successful agreements will come into force from October 2021. Preparations to pilot the new local nature recovery scheme and to launch early landscape recovery projects continue. They are expected to start from next year.
The Earl of Devon (CB) [V]
My Lords, it is a pleasure to welcome the Minister to the Dispatch Box at such an important time for British farming. I declare my interests as a Devon farmer. Does the Minister agree with His Royal Highness the Prince of Wales that farmers face a unique triple threat from decreased basic payments, increased trade and an uncertain transition to sustainable farming under ELMS? Do the Government accept that the uncertainty over the details of that transition is bad for farmers and, more particularly, worse for the environment?
Lord Benyon (Con)
Like the noble Earl, I certainly recognise the need to provide further certainty. That is why in November we published the agricultural transition plan, which set out in detail how we will phase out direct payments and will support the sector to contribute to environmental goals and to be profitable and economically sustainable without subsidy. Since then, we have launched the initial farm resilience fund, opened the Countryside Stewardship scheme to further applications and published a consultation on delinking and the lump-sum exit scheme. More than 2,000 farmers have applied to pilot the sustainable farming incentive. Across the summer, we will provide further information on early rollout of the sustainable farming incentive, the farming in protected landscapes programme and our tree health pilot, and we will announce the successful applicants for the farming resilience fund.
Lord Colgrain (Con)
I welcome the Minister to his new role. Will he confirm that the results of the ELMS trials will be available to all and, in particular, that it will be possible to compare like-for-like soil types and typographies? Will he also confirm the possibility of carbon credits being applied more broadly across existing woodland and coppice, as opposed to the present eligibility for new woodland planting only?
Lord Benyon (Con)
I am grateful for the kind comments of welcome. I am living proof that you can boil cabbage twice: it is very nice to be back at the department. We are introducing three schemes that reward the delivery of environmental benefits: the sustainable farming incentive, the local nature recovery scheme and the landscape recovery scheme. The noble Lord is entirely right to talk about the importance of soils. They are fundamental to the first two schemes. As far as carbon credits are concerned, this is a huge opportunity for the farming community, particularly in getting some private sector investment to supplement farm incomes. I hope that we can have a clear system that will operate very soon for farmers to access.
Baroness Mallalieu (Lab) [V]
My Lords, I, too, welcome the noble Lord, Lord Benyon. I do not know about his cabbage, but he certainly knows his oats, and he is particularly welcome for that reason. I remind the House of my farming interests. A recurring theme in the feedback from the ELMS trials so far is the need for free advice about eligibility, especially for smaller farms. Will the Government make that a priority and also ensure that the requirements of the scheme are written in plain English rather than in environmental jargon, which has contributed to low take-up in some of the earlier schemes?
Lord Benyon (Con)
My Lords, we recognise that our changes will be challenging for some farmers. I know that Exmoor farmers, in particular, are close to the noble Baroness’s heart. The scheme that we have introduced will provide funding so that farmers can access support provided by organisations with relevant experience which are already known and trusted in the farming community. The scheme will focus on assisting farmers to make the right decisions for themselves, their families and their business through effective discussion and planning. I hope that we can keep that in clear English.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I, too, welcome the noble Lord, Lord Benyon, to his first outing at Oral Questions and look forward to working with him. There has been publicity around payments to elderly farmers to encourage them to retire but little about the encouragement being offered to younger people to enter farming. Can the Minister say how many farmers have applied for the grant to retire and how many new entrants have come forward?
Lord Benyon (Con)
My Lords, it is early days on the lump sum payment for farmers to retire. It is proposed that the scheme will come in next year and will involve two years’ basic payment scheme amounts on a reference year budget. It is intended to encourage to farmers to have a dignified exit where it suits them and their business. This will also encourage new entrants who, I hope, will see a future in farming and will be assisted by the Government in trying to enter a business which has been all too difficult for young people to enter in the past. I promise to keep the noble Baroness informed on this because I know it is of great importance to her and the House.
Baroness Hayman of Ullock (Lab)
My Lords, I, too, welcome the noble Lord to his position. Does the Minister agree with the assessment that granting tariff- free terms to Australia, and potentially New Zealand, undermining, in particular, small family farms, means that we have to make the same concession to the United States and Brazil? How are the Government ensuring that the design of ELMS considers external factors rather than being purely domestic in focus?
Lord Benyon (Con)
I thank the noble Baroness for her question and her welcome. The Government are committed to trying to assist farming through this transition period. She will be aware of the manifesto commitment that all our trade negotiations will not compromise our high standards of environmental protection, animal welfare and food standards; that is still the position. We need to make sure in ELMS that we are not just looking at the minutiae of a different support scheme and trying to migrate from area payments to a new form of support, but recognising the wider implications to the farming community and the international effects of commodity prices and the like. I am absolutely with her on this; I want to work with ministerial colleagues and others to try to make sure that this works.
The Earl of Shrewsbury (Con)
I, too, welcome my noble friend to the Front Bench. Can my noble friend the Minister tell me what financial incentives, if any, will be offered to farmers to encourage them to practise minimum-till disciplines for crop-growing—a method that the GWCT has proven is most beneficial in the improvement of soil structure, earthworm populations and moisture retention?
Lord Benyon (Con)
I entirely agree with my noble friend that our soil is a vital resource. I hope he will agree that our sustainable farming incentive scheme provides a range of opportunities for farmers to be paid for protecting and enhancing the quality of their soil, including the management of tillage. Two of the eight standards that will be piloted are focused specifically on soil management: the arable and horticultural soils standard and the improved grassland soils standard, which both include actions to reduce tillage on at-risk soils at the intermediate and advanced levels of ambition.
Lord Carrington (CB) [V]
My Lords, I declare my interests as set out in the register. Please can the Minister—whom I congratulate on his appointment—tell us what steps will be taken to protect good agricultural land from being taken out of food production to accommodate environmental impact measures such as biodiversity, net gain, offsetting and other schemes that might affect food production? What are the Minister’s views on the establishment of a land use register to ensure national food security?
Lord Benyon (Con)
I am grateful to the noble Lord. I think he will be reassured that, in moving from area payments to a more nuanced system of supporting environmental activities, farmers will be encouraged to farm their best land as best they can and look at those corners of fields and other parts of their farm that are less productive and are economic only because of the basic payment scheme. I hope he will see that kind of, if you like, market-led push by the Government as moving in the right direction. As far as a register is concerned, that will have to happen as part of further schemes, which will require local authorities, or local government at some level, to be involved in their rollout.
Lord Browne of Ladyton (Lab) [V]
My Lords, I join in the words of welcome to the Minister. Some 30% of farmland in England is let to tenant farmers. Published survey evidence reveals a lack of confidence and willingness among them to participate in the SFI pilot. Their association spokesperson said that
“tenant farmers are concerned that DEFRA does not fully understand or appreciate the diversity of land management models that exist within British agriculture”
and that
“the pilot may not be able to fully test out the implications of the scheme for the tenanted sector.”
How do the Government plan to ensure that this is not the case?
Lord Benyon (Con)
We have had about 2,000 requests to enter the sustainable farming initiative pilot; we will probably go with around 1,000 of those, starting from October this year. We intend to have a wide geographical base as well as a wide group of different farm sizes; this will certainly include tenant farms, and we are working with the Tenant Farmers Association to achieve that.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, the time allowed for this Question has elapsed. We now come to two First Readings.
Higher Education Cheating Services Prohibition Bill [HL]
Monday 24th May 2021
(3 years, 6 months ago)
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Elderly Social Care (Insurance) Bill [HL]
Monday 24th May 2021
(3 years, 6 months ago)
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Post Office Update
(3 years, 6 months ago)
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Baroness Hayter of Kentish Town (Lab) [V]
My Lords, no one who knows this story can feel other than shame that a government-owned institution, the Post Office, oversaw—nay, facilitated—the biggest miscarriage of justice that we have seen, with nearly 1,000 false prosecutions as well as bankruptcies, prison and unemployment all flowing from the actions of Fujitsu and the Post Office, and indeed from the lack of action from the Post Office’s shareholder, the Government.
The Minister knows we are delighted that the inquiry will now be statutory—though somewhat bemused that it has taken a month for the Government to reach that conclusion—and that a progress report will be made public, but there remain other concerns. First, while we agree with the Statement that
“We cannot undo the damage”,
we can move faster and with generosity on the question of compensation. Perhaps the Minister can explain why the inquiry will not cover compensation, and assure us that speed will be of the essence in beginning to help those so badly affected by this sorry saga. Can he update the House on the appointment of a new Post Office director to handle compensation and ensure that this will not replicate the disgraceful Windrush scheme?
Secondly, there is the major issue of the lack of accountability of those who were deeply implicated in the lies and lack of openness that led to the prosecutions and the delay in dealing with the results. Michael Keegan was Fujitsu’s chief executive when the company was telling the Post Office that Horizon was fine and when its staff were even appearing in court as prosecution witnesses against the sub-postmasters. He does not appear to have suffered any penalty and indeed is now a Crown representative at the Cabinet Office, where he oversees the Government’s relationships with suppliers. Given that Fujitsu continues to work with the Post Office, a £42 million extension to the Horizon contract having been agreed with the Post Office last month, can the Minister assure the House that Mr Keegan would have had no role in any such decision?
We continue to worry about the role that Fujitsu played in covering up concerns about Horizon and in facilitating the blame-shifting to sub-postmasters and their subsequent prosecutions, actions for which the company appears not to have paid a penny in compensation. What discussions are taking place in that regard?
The Post Office, which now wants taxpayers to take on its liabilities over this issue, has still not explained why no one questioned how it was that a vast cohort of upright citizens—people selected and trusted to run sub-post offices and handle public money—all at the same moment became petty thieves, as if a dishonesty virus had suddenly taken hold. Did nobody notice? The management incompetence at the highest level, as senior directors watched unlikely criminals paraded in court, still beggars belief.
I turn to the Government, the Post Office’s only shareholder, which somehow failed to spot what journalists, the noble Lord, Lord Arbuthnot, and finally the court did: that the Post Office was abusing its power over postmasters, failing to question Fujitsu and prosecuting a swathe of unlikely thieves. Will the Minister acknowledge the Government’s failure of oversight and due diligence, with drastic consequences both for individuals and for taxpayers?
We welcome the fact that the inquiry will now be statutory, but my plea to the Minister is: will he ensure that in parallel to the inquiry the Government themselves take a close look at how they oversee not just the Post Office but all expenditure, personnel and IT decisions to ensure that there is sufficient curiosity, challenge, openness and honesty, so that taxpayers’ money and people’s lives are never again put at the risk of a saga like this one?
Lord Fox (LD)
My Lords, let us remind ourselves of the human scale of this outrage. Starting more than 20 years ago, the Post Office prosecuted nearly 1,000 sub- postmasters and sub-postmistresses based on incorrect information from a recently installed computer system. Some went to prison following convictions for false accounting and theft, many were financially ruined, and some have since died with the shame of this still hanging over them and their families.
As we know, a subset of those people were acquitted and, as we discussed around a month ago, the Government have asked Sir Wyn Williams to inquire into this episode. We are of course pleased that the lid is beginning to be lifted on some of these issues. Speaking on 28 April about suggestions that the inquiry was underpowered, the Minister was very clear:
“Given that all parties so far are committed to co-operating, we remain of the view that a non-statutory inquiry is the right approach.”
He added:
“However, if Sir Wyn does not get the co-operation he requires, then all options are on the table and we will not hesitate to act.”—[Official Report, 28/4/21; col. 2324.]
Today we are discussing a new Statement that says the context of the inquiry has changed, hence the move to a statutory basis, but it cites the successful appeal as that context. That is strange as the results of that appeal were available on 28 April. So what has actually changed? What has caused the department to change its mind? For example, has the co-operation of which the Minister spoke evaporated? If so, who is now no longer co-operating?
I do not think the noble Baroness, Lady Hayter, or I are surprised that this change has had to happen. Like her, we welcome it as a small step in the right direction, but I point out that on an already tight schedule this has not helped. On 28 April the Minister said he expected the report in the summer, and in your Lordships’ House the Minister was adamant that this deadline could be met. Now the inquiry report is delayed. What will take the extra time? What has caused that delay? Will the new deadline of the autumn be met?
As the Statement suggested, the terms of reference for Sir Wyn have been amended. As we do not have the benefit of tracked changes, can the Minister please outline for the record and for your Lordships the principal changes in those terms of reference? If we look overall at the terms of reference, the overriding problem is there for all of us to see: six clauses, each set out with very passive language. “Assess”, “understand” and “acknowledge” are all good words, I will admit, but they are not an indicator that this inquiry has any way to identify culprits. They are not the words of a robust bringing to book. Even if he wanted to, Sir Wyn will not be able to go beyond those terms of reference as there is no wriggle room. If this is the only inquiry, I fear it is not going to be a satisfactory one.
For example, section B of the terms of reference uses the words
“to establish a clear account of…the implementation and failings of Horizon”
and the Post Office’s use of that information—the latter are my words, not those of the ToR. Given that this inquiry is essentially a fact-finding mission, what will the Government do with the facts when they get them? Further, it seems to be focused largely on the failure of the Horizon system and not that of Post Office management—and, as we know, this case was compounded by what appears to have been an intentional decision by the Post Office not to disclose material that undermined its case. So where in the terms of reference will this issue be tested and judged?
As in other cases, there are two levels of failure here. The first was an excess of trust in the system and technology; the second was the failure to deal with the consequences of this when the facts became apparent to some people within that organisation. This inquiry is set up to learn lessons from history but not to deal with the legacy of this past. With these terms of reference, I do not see how this inquiry will establish culpability from these facts, and how it will be the means to deliver resolution to the sub-postmasters and sub-postmistresses and their families over whom this case hangs. I do not see it as a route to compensating these people. So, while it is a step forward, I can understand why former sub-postmasters are demanding a judge-led inquiry into this scandal. I have a great deal of sympathy for their demand.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Fox, for their comments. Let me say from the start that I completely share their outrage about this scandal, as I think they both know. It has been going on for many years, under many different Ministers and Governments, and we should all accept our share of the responsibility for the dreadful way these poor people were treated. Nobody who saw them emerging on to the steps of the High Court a few weeks ago could have failed to have been moved by what they had to say.
Turning to the many questions that the noble Lords asked, as I said, this Government deeply regret that this situation has occurred. Since it was launched in September 2020, the Post Office Horizon inquiry has made swift progress. The inquiry’s chairman, Sir Wyn Williams, and his team have heard from many affected postmasters and gathered evidence from key parties, including the Post Office, my department, UKGI and Fujitsu.
The noble Lord, Lord Fox, asked about the changes to the terms of reference. It is clearly critical that the inquiry is able to look at exactly what decisions were made and why, in relation to the Horizon prosecutions, so that lessons can be learned. The terms of reference have changed to clarify that the inquiry can investigate the Post Office’s decision-making in taking action against postmasters, including pursuing prosecutions and a fairly aggressive legal strategy, and in particular of course it can investigate the cases of those whose prosecutions have now been quashed.
The noble Baroness, Lady Hayter, asked about accountability. Let me be clear, for the avoidance of doubt, that the inquiry can make findings of fact and make recommendations. With regards to accountability, as noble Lords will understand, matters of criminal and civil law remain for the courts, as only the courts can make such judgments. However, they and other bodies can draw on the findings of the inquiry when considering these issues. It is therefore now for Sir Wyn to establish what happened, what went wrong and why it went wrong. We can then consider whether more needs to be done in the light of those findings.
The noble Lord, Lord Fox, asked about the timeframe for the inquiry. The deadline for the final report has now been extended to autumn 2022, to take account of the new statutory nature of the inquiry, but we are expecting a progress update later this summer. The changes to the inquiry’s timeline mean that Sir Wyn will have more time to determine exactly what went wrong at the Post Office during this period and to make sure that a situation such as this cannot happen again.
The noble Lord, Lord Fox, and the noble Baroness, Lady Hayter, both raised the issue of compensation. I know that many postmasters, and Peers across this House, have called for further compensation for those who have been caught up in this situation. Those whose convictions have been quashed, with a settlement amounted in the group litigation, are of course outside the scope of the inquiry. But, as I said previously, the Government are keen to see that all sub-postmasters whose convictions are overturned are fairly compensated as quickly as possible. We will ensure that we work with the Post Office to make this happen as quickly as it is possible to organise.
The noble Baroness, Lady Hayter, referred to Fujitsu. She will be aware that two Fujitsu employees are still the subject of a police investigation. However, so far Fujitsu has co-operated fully with the terms of the inquiry. I confirm to the noble Lord, Lord Fox, that all actions of the Post Office, including its fairly aggressive legal strategy, can and will be examined under the terms of the inquiry.
The Lord Speaker (Lord McFall of Alcluith)
We now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.
Lord Arbuthnot of Edrom (Con)
My Lords, last week the Minister, Paul Scully, said:
“We want to ensure justice and fair compensation for all who have been affected”.—[Official Report, Commons, 19/5/21; col. 721.]
He did not limit that to those whose convictions had been overturned. Does my noble friend accept that this must mean reopening the settlement of the group litigation order? Please will he stop using the words “full and final settlement” to describe a settlement which was not just and not fair?
Lord Callanan (Con)
Let me again pay tribute to the work that the noble Lord has done, both in the other place and here, in seeking to draw attention to this scandal. He was well ahead of many people in seeing the true extent of this horrendous scandal but, as I have previously said to the House, the December 2019 settlement was between the Post Office and a group of sub-postmasters. Both those parties were legally represented; the Government were not a party to this litigation, nor to the settlement that was agreed, and we still believe that it would not be appropriate for the inquiry to reopen or review such a settlement, which was agreed in the courts.
Lord McNicol of West Kilbride (Lab)
Perhaps I may take the question put by the noble Lord, Lord Arbuthnot, a little further and probe the Minister. I would like to ask about the scale, scope and timeframe of compensation; the Minister touched on it a little, but perhaps I could dig a little further. As we all know, Her Majesty’s Government are the sole shareholder in the Post Office, which has ultimate responsibility for where the compensation lies. Can the Minister set out in a bit more detail the scale and scope of the compensation discussed between Her Majesty’s Government and the Post Office? Importantly, can he put a bit more meat on the bones of the timeframe? We all know that this compensation for sub-postmasters and sub-postmistresses is so well deserved.
Lord Callanan (Con)
I agree with the noble Lord and understand his impatience. The Government are keen to ensure that postmasters whose convictions are overturned are fairly compensated. But I am sure he will understand that it is for the Post Office to consider the next steps in this case, in the first instance. I therefore regrettably cannot provide him with a timescale for this process or make commitments on funding at this point, but I can assure the House and the noble Lord that we are eager to see that this happens as speedily as possible.
Baroness Tyler of Enfield (LD) [V]
My Lords, this shocking injustice, perpetrated by the Post Office, has left a sour taste in the mouth of many people and badly damaged public trust in a national institution. Sadly, this comes at the same time as the Post Office is playing an ever more important role in helping people to access cash and other banking and financial services, particularly in poorer and less well-served communities. So what plans do the Government have to rebuild trust in the Post Office, particularly in its management culture, and provide greater direction in the way that it runs its affairs while the inquiry takes place? Can the Minister confirm that the Post Office will continue to play a key role in the new access to cash banking hub pilots, to protect people from the impact of bank branch closures?
Lord Callanan (Con)
The noble Baroness makes some very astute observations and I agree with her; the Post Office is a vital access point for customers to deposit cash, enabling the Government’s financial inclusion agenda and ensuring that many small businesses can benefit from accessible, convenient and local ways of depositing cash. The Post Office has seen significant growth in the use of this facility in recent years and it is particularly important for more vulnerable or remote customers in the context of bank closures, so it is very important for it to carry on with this work. She is also right to point out the need to rebuild the trust of the public.
Lord Forsyth of Drumlean (Con) [V]
My Lords, I congratulate the Government on extending the remit of the inquiry, but I am afraid my sympathies are with my noble friend Lord Arbuthnot. I do not understand why all those affected cannot be compensated, nor why we are not asking Fujitsu to stump up. Has my noble friend seen the report in Computer Weekly of 19 February, in which a developer said that
“senior managers at Fujitsu were aware that an important element of the Horizon system did not function correctly and could not be fixed”
and that, when this product was launched,
“no design documents, no test documents, no peer reviews, no code reviews, no coding standards”
were issued?
Surely these people are victims of gross incompetence, both on the part of the Post Office and by a corporate organisation which is still working for the Government. Why it it not being properly held to account and stumping up, instead of relying on the taxpayer?
Lord Callanan (Con)
We are actively discussing the next steps with the Post Office, including the best process for ensuring that fair and swift compensation is provided. As I said, it will be for the Post Office to determine the next steps but, as I have said repeatedly, we want this to be done as quickly as possible. Regarding Fujitsu, I have considerable sympathy for the points the noble Lord made, but compensation from Fujitsu is a contractual matter between the Post Office and Fujitsu. I hope all options are being examined. It is for the Post Office to lead on the compensation process, but I assure my noble friend that Ministers are closely following this process.
Baroness Quin (Lab) [V]
My Lords, I welcome the Government’s U-turn and I agree with what the noble Lord, Lord Arbuthnot, said about compensation. Will the inquiry also look at issues such as the way the Post Office’s actions left some remote, rural villages without a post office for months? This includes one example I know of where the post office was closed without notice on pensions day, leaving a number of pensioners and vulnerable people stranded without any proper explanation, help or apology.
Lord Callanan (Con)
The next stage of the inquiry will continue to hear from affected sub-postmasters to understand what impact the Post Office’s actions had on individuals and local communities. I do not know the specific example the noble Baroness refers to, but if she wants to write to me about it, I will certainly get her a more detailed answer.
Lord McLoughlin (Con)
My Lords, the sheer size and scale of this miscarriage of justice is quite difficult to believe—that in this day and age an organisation such as the Post Office was allowed to continue doing this year in, year out. I pay tribute to my noble friend Lord Arbuthnot for the way he conducted the campaign, both in this place and the other place. In welcoming the fact that this has now been turned into a statutory inquiry, I think the Government have a responsibility to speed up the compensation to those who were treated appallingly by both the Post Office and, in turn, as the Post Office was owned by the Government, by Governments of all colours.
Lord Callanan (Con)
It is for the Post Office to determine the next steps, but Ministers are closely following the situation. We are keen for it to act as speedily as possible and get on with the process, as we all want to see these people fairly compensated.
Baroness Stuart of Edgbaston (Non-Afl)
My Lords, the Minister is making a valiant attempt at defending the split between the Government as a shareholder and allowing the Post Office to conduct its own operations in relation to compensation. The path we are currently going down is only adding insult to injury. To say that the outcome of the inquiry can be used for future compensation claims and further civil action simply delays wrong being put right. I urge the Minister to reconsider this and not hide behind the operational and shareholder split on this issue.
Lord Callanan (Con)
I assure the noble Baroness that I am not trying to hide behind anything. I totally accept that the Government need to accept their share of responsibility, as do the Post Office management and Fujitsu, but all these matters will be brought out. That is what the inquiry is for: to determine what went wrong, what lessons can be learned and who was responsible. So we need to wait for that inquiry. But as I have said, we want to ensure that the compensation process proceeds as swiftly as possible.
Lord Hain (Lab) [V]
My Lords, I am sorry but the Minister’s answers on compensation are simply not good enough. Surely the Government must fully admit to their own culpability? Throughout the shabby and shameful persecution of innocent sub-postmasters, the Permanent Secretary in the department was the Post Office’s accounting officer and a government representative sat on its board. It is no good just passing the buck. The Treasury must fully fund an extremely generous compensation scheme to atone for a criminally negligent failure of ministerial and Permanent Secretary responsibility.
Lord Callanan (Con)
I am not trying to pass the buck to anybody; I have accepted all the responsibility that falls on my department and on Ministers present and previous. The inquiry will draw all these facts out in due course. I say to noble Lords that it is for the Post Office to continue with this process. The Government will accept their share of responsibility when it comes to that, but we need the Post Office to get on with it and we want it to do so as soon as possible.
Lord Polak (Con)
My Lords, over the weekend I checked in with my friend Rita Threlfall, one of the 555 claimants who brought the successful action against the Post Office in 2019 but received scant compensation. She is rightly concerned that some victims are being treated differently from others. Does my noble friend the Minister agree that we should be insisting on fairness and equity for all those wronged in this appalling injustice? Can he assure me that everything will be done to create a level playing field for all those who suffered? There is a danger that the Post Office will be responsible for a system where there is a first class and a second class. How can my noble friend the Minister ensure that this applies only to its stamps and not to its people?
Lord Callanan (Con)
As I have said to other noble Lords, we are discussing the next steps with the Post Office. I agree with my noble friend that that needs to include the best process for ensuring that fair and swift compensation is provided to those sub-postmasters whose convictions were quashed, but it is for the Post Office to decide on the next steps.
Lord Mackenzie of Framwellgate (Non-Afl) [V]
My Lords, I thank the Minister for updating the House on this industrial miscarriage of justice. On 28 April, I, along with other noble Lords, asked for the powers of the inquiry to be increased. I am delighted that the Government have acted decisively in converting this into a statutory inquiry. Can the Minister confirm that the Government will press the Post Office to include Fujitsu in any liability for compensation? In the light of the Statement mentioning that a criminal investigation is going ahead, can the Minister confirm this will give certain witnesses the right to remain silent? Does this not somewhat inhibit the scope of the inquiry?
Lord Callanan (Con)
The noble Lord refers to the ongoing Metropolitan Police investigation into two Fujitsu employees following a referral from the Director of Public Prosecutions in response to the findings of the Horizon issues judgment. I see no reason this should cause problems with Fujitsu co-operating with the inquiry, as the company—notwithstanding the announcement of the police investigation—has already fully indicated its willingness to co-operate with Sir Wyn and the inquiry. As I have said in previous answers, the matter of compensation from Fujitsu is a contractual one between the Post Office and Fujitsu.
Lord Browne of Ladyton (Lab) [V]
My Lords, some of these wrongful convictions go back to 2003—a wait for some of nearly 20 years for justice. The delay can be explained in part by the Post Office cover-up and its contesting of cases for as long as possible. However, this is also an egregious, systemic failure of the criminal justice system. What is being done to stop it happening again, especially with regard to the digital evidence rule that made it easier for the Post Office to bamboozle courts, with regard to judicial capacity to test the reliability of computer evidence and with regard to the power of self-interested entities to bring private prosecutions? Where were the lawyers?
Lord Callanan (Con)
There were lots of lawyers involved in this case; some might think that there were too many. However, the noble Lord makes some very good points about the operation of the justice system. As I have indicated in previous answers to this House, I have received personal assurances from the Post Office that it is no longer pursuing any private prosecutions and will not do so in future. This is indeed an egregious scandal; there are many lessons to be learned from the inquiry, and we will learn them.
Baroness Altmann (Con)
My Lords, I echo the welcoming of the extension of the inquiry. I also echo the tributes to my noble friend Lord Arbuthnot for his work on this issue. This was an affront to justice and compensation is urgent. There is a clear feeling across the House that the sense of urgency perhaps needs to be increased by a level or two. More than £100 million of taxpayers’ money was spent on criminal prosecutions of innocent people that were investigated, managed and conducted by the Post Office itself—marking its own homework. Can my noble friend assure the House—I believe that he may have just done so in answer to the previous question—that private prosecutions will not be used as a fast-pass ticket to jump the queue to the criminal courts by companies with deep pockets? This would mean that we could learn lessons in this case so that, generally speaking, wealthy private companies would not be able to bring private prosecutions or we could review their ability to do so.
Lord Callanan (Con)
I have given the noble Baroness an answer about the Post Office pursuing private prosecutions. I reiterate that it has no special powers in this regard: the power to bring private prosecutions exists across the piece and is used by a number of other organisations. The Post Office has assured us that it has no plans to pursue any further private prosecutions. The issue of private prosecutions generally has been studied extensively; indeed, a committee of this House looked at the issue and recommended—I will correct this for the noble Baroness if it is not right—that the power should remain. However, I repeat that the Post Office will not be pursuing any more private prosecutions.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, the Minister referred to the fact that the Government were actively discussing this issue with the Post Office. Can he confirm whether that means that the Government will take full responsibility for the compensation for all those post personnel, including those from Northern Ireland, who were so wrongly maligned and convicted?
Lord Callanan (Con)
The noble Baroness is of course right, and I assure her that the Government are keen to see that all sub-postmasters with quashed convictions are fairly compensated. The noble Baroness will understand that this question is being followed closely by the Treasury; the Post Office as a company is 100% owned by the Government, so we are following it and the financial implications very carefully.
Leasehold Reform (Ground Rent) Bill [HL]
(3 years, 6 months ago)
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The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
My Lords, first, I declare my residential and commercial property interests as set out in the register.
This Bill will lead to fairer, more transparent home ownership for thousands of future leaseholders. It represents part of the most significant changes to property law in a generation and should be welcomed by all across this House. The Bill is intentionally narrow in scope and exists to put an end to ground rent payments for new residential properties with long leases—those in excess of 21 years.
The Bill’s measures have been informed by consultation with the public and the leasehold sector. We consulted on proposals to reduce future ground rent in October 2018; that consultation received more than 1,200 replies, which have informed the Bill and its implementation approach. I extend my thanks to all those who have made invaluable contributions to the process of bringing this Bill forward, as well as to those who engaged with me ahead of today. We can all agree that this has ensured that the Bill will be even more effective in delivering on its promise to ensure that, for the first time, ground rent in residential long leases will have no financial element. I look forward to further engagement with noble Lords across the House in the coming weeks.
The Bill is only the first part of a two-part legislative programme to reform the leasehold system. Further leasehold reform will follow later in this Parliament and will redress a range of issues facing leaseholders. Taken together, this programme of reform delivers on our manifesto commitment to improve the leasehold system for generations to come.
I am pleased that the Bill is now before the House. It is an integral part of Government’s broader reform to create a housing marking that works for everyone. This includes improving leasehold as a system of home ownership. There are an estimated 4.5 million leasehold dwellings in England and 235,000 leasehold properties in Wales. In England, that represents almost one in five of the total housing stock. Leasehold has always been a common form of ownership for flats: more than two-thirds of leasehold dwellings are flats and the rest are houses, which equates to 3.1 million leasehold flats and 1.4 million leasehold houses in England.
We know that leaseholders face a range of problems, such as a lack of transparency in an often opaque system and high charges when buying or extending a lease. We have been consistently clear on our ambition to take forward a comprehensive programme of reform to end these unfair practices in the leasehold market. We are committed to helping existing and future homeowners by banning the sale of new leasehold houses, giving freehold homeowners the same rights as leaseholders to challenge unfair charges and closing loopholes to prevent unfair evictions.
On 7 January, the Secretary of State announced a package of leasehold reforms covering enfranchisement valuation and 990-year leases. This is the first part of our response to the Law Commission’s reports on leasehold and commonhold. We will respond to the Law Commission’s remaining recommendations in due course. In addition, we know that commonhold does not work as well as it could. That is why we have established the Commonhold Council—a partnership of industry, homeowners and government—to prepare the market and consumers for the new, widespread take-up of commonhold; the first meeting of that council took place last week. Our reforms will ensure that leasehold is a fairer and more transparent system for homeowners.
I am aware of the concern that many noble Lords will have for existing leaseholders. The package announced in January by the Secretary of State will result in substantial savings for existing leaseholders, particularly those with fewer than 80 years left on their lease. For existing leaseholders, we will increase the length of lease extensions to 990 years, which is a significant improvement on the current length of 90 years for flats and 50 years for houses. Existing leaseholders can currently pay a premium up front in exchange for extinguishing or buying out the ground rent and extending their lease.
We will also abolish marriage value, cap the treatment of ground rents at 0.1% of the freehold value and prescribe rates for the calculations at market value. A new online calculator will make it simpler for leaseholders to find out how much it will cost them to enfranchise.
We know that some leaseholders have faced serious problems with high and increasing ground rents, which is why we asked the Competition and Markets Authority to conduct an investigation into potential mis-selling and unfair terms in the leasehold sector, including the problem of onerous ground rent. The CMA carried out a detailed investigation into these practices. Its report, published in February last year, estimated that doubling ground rent has affected more than 18,000 lease-holders. In March this year, the CMA informed developers that they may be in breach of the law. This is a very serious issue indeed, and the Government strongly welcome the CMA’s efforts to bring justice to home owners affected by unfair practices.
On the specific issue of ground rent for future leaseholders, historically, leases would require a ground rent payment of no or little financial value. This payment was often used to form the contract between the leaseholder and freeholder, and what might be known as a “peppercorn ground rent”, but the leaseholder received no tangible service in return for this limited ground rent payment.
Since the early 2000s, we have seen an increasing number of properties sold with leases that require significant financial ground rent payments from leaseholders. We have seen little consistency in when and how much ground rent is charged—and, still, no tangible service in return. Thousands of leaseholders bought homes for which the ground rent started at hundreds of pounds a year. These payments were subject to increases, some doubling more frequently than every 20 years. Unfair practices relating to ground rent have damaged the reputation of the leasehold system, but, fundamentally, we know that ground rents are frequently not transparent and have caused substantial difficulties for some leaseholders. With this Bill, we are legislating for the first time so that new residential long leases have no financial demand for ground rent. In new leases, ground rent will be set in law at a genuine “peppercorn rent” level. This means that nothing more than an actual peppercorn can be sought from leaseholders, if indeed any ground rent is sought at all.
Let me be clear: this Bill is not an attack on freeholders. They play a clear, central role in the property market. However, by ensuring that ground rent in new residential long leases does not impose a financial burden, we are removing an opaque charge faced by home owners and making home ownership more transparent and fairer for future generations. We are ensuring that the costs associated with home ownership are clear and easily understood, and that high charges with no tangible service in return can never happen again. Institutional investors will be able to benefit from their existing investments, but in future they will find alternative investment elsewhere. I fully expect investors to adjust their business models to account for this change. Crucially, the benefit to future home owners will be significant.
I turn to the key provisions of the Bill, which apply to future long leases exceeding 21 years of dwellings in England and Wales. The Bill will mean that if any rent is demanded as part of a new residential long lease, it cannot be for more than one literal peppercorn per year. As is the case now, there will be no obligation on a freeholder to charge or collect a peppercorn, and following this Bill we do not envisage that in practice freeholders will ask their leaseholders to pay a peppercorn in rent.
It is not our intention to put barriers in the way of freeholders collecting payments needed to maintain the building and provide tangible services to leaseholders, but it is unacceptable if freeholders attempt to find loopholes and ways around this legislation. We have tussled with the notion of closely defining the meaning of “ground rent”, and of a “rent”, and concluded that a fixed definition could lead to workarounds by those who wish to avoid the legislation. That is why the Bill includes a wide definition of “rent”: to deter attempts by freeholders to charge what is effectively a ground rent by another name.
For the same reason, the Bill also bans freeholders from charging an administration fee for the collection of a peppercorn rent from long residential leaseholders. Leaseholders will have the right to apply to the first-tier property tribunal if a prohibited rent or administrative charge is paid.
There are some exemptions in the Bill. It does not apply to leases used only for a business purpose. As my noble friend Lord Young of Cookham has previously pointed out, the Bill includes a slightly different definition of a business lease from the one used for business tenancies in the Landlord and Tenant Act 1954. We have carefully considered how to define business use for this Bill. As a result, we have crafted a new definition to ensure that residential leaseholders are protected, and commercial landlords can still collect rent from their tenants. For mixed-use properties, the residential use must significantly contribute to the business purposes of the lease for the exemption to apply.
Statutory lease extensions for flats are unaffected by the Bill because they are already restricted to a peppercorn rent. Statutory lease extensions for houses—for which no premium is currently paid—are exempt and can continue to include a ground rent higher than a peppercorn, but we intend to reform this later in this Parliament. Leaseholders extending through the voluntary process are also exempt and will be able to choose to continue to pay ground rent for the remaining period of the existing lease instead of paying a large up-front sum. However, the peppercorn limit will apply to the new, extended lease.
Clause 2 provides for applicable community housing leases also to be exempt. This allows a community land trust or a co-operative society to collect rent to provide services for their community. Community housing schemes that promote the supply of new housing to meet local need and where residents contribute towards the cost of shared community services are very different from ground rent for long residential leases where no clear service is provided in return.
The Bill also makes special provision for home reversion equity release plans and homes bought using a rent-to-buy arrangement. It is important that such specialist financial products can continue, maximising choice for home owners over how they finance their property purchase. This exemption ensures that such specialist financial products that rely on rent can continue, giving home owners choice over how they finance their property purchase. Clause 2 is clear that to benefit from this exemption, home reversion plan products must be regulated by the FCA.
The Government believe strongly in the benefits of home ownership. It is right that we should do everything we can to support people from all backgrounds to realise their ambition to own their own home. We believe that shared ownership has a vital role to play in offering a route into home ownership to those who would otherwise struggle to buy a home. By purchasing a share of a property, aspiring home owners can overcome the income and deposit barriers that may stand in their way. Under the shared ownership model, landlords can collect rent on their share of the property and this Bill will allow them to continue to do so. Once the leaseholder has purchased 100% of the property, the rent will be limited to a peppercorn. The Bill does not amend any other aspect of shared ownership.
It is only right that older residents also benefit from the Bill and are no longer burdened by a financial demand for ground rent. That is why it will also apply to retirement properties. I acknowledge that the Government had originally announced that the retirement housing sector would not be covered by the legislation. In recognition of that, the Bill will not affect retirement properties until after 1 April 2023, giving the retirement sector additional time to transition.
The Bill proposes a number of enforcement measures that offer a strong deterrent to any freeholders and their managing agents who try to get around its provisions and in doing so it protects leaseholders. Enforcement will be the duty of local trading standards authorities. Trading standards do a good job of enforcing current regulations and have an excellent understanding of their local areas. District councils in England will also have the power to enforce this Bill if they choose to do so. Enforcement authorities will be able to retain the proceeds of any penalties they impose to meet the costs of their work relating to residential leasehold property.
In terms of sanctions, freeholders who charge a non-peppercorn ground rent on regulated leases will face financial penalties of between £500 and £5,000. The penalty applies per lease, so freeholders of multiple properties could receive higher penalties if they breach the legislation multiple times. In addition to any financial penalties, enforcement authorities and the tribunal can order the freeholder or their agent to refund any prohibited rent within 28 days. Leaseholders who have paid prohibited rent or administrative charges can also apply to the First-tier Tribunal for recovery of the rent or to determine if the charge is payable. Enforcement authorities may also help a leaseholder apply to the tribunal. This help can include conducting proceedings or giving advice. I believe that this enforcement and penalty regime has been set at an appropriate level to act as an effective deterrent.
These measures will deliver an important and meaningful improvement to the leasehold system for future generations of home owners. We recognise that the system as it stands is not working for all leaseholders, which is why we are committed to an ambitious programme of reform. The Bill is an important first step, and with noble Lords’ support we will see it made into law with speed. By banning ground rent for future residential long leases, while delivering on our commitment and making the leasehold system fairer and more transparent, the Bill will make a real difference to thousands of future leaseholders across England and Wales. I commend it to the House and beg to move.
Baroness Andrews (Lab) [V]
My Lords, I welcome the Bill although, as the Minister might expect, with some caveats. But I welcome the way in which he introduced it and the context in which he placed it. Four years after it was promised in 2017, a leasehold reform Bill has reached this House—and it is an important start to remove what the Minister called the massive and increasing disadvantages that leaseholders have to contend with. The law has until now not been on their side, and this helps redress that.
We recognise that leasehold reform has been in process for decades. The Law Commission has done its work after endless investigations and consultations, but the Minister will know that, along with many others in this House, I am disappointed that the Government have not been able to bring forward the full range of leasehold reforms that we were promised. The Minister spoke about bringing them forward later in this Parliament. Inevitably, my first question is: what does that mean and can he be more specific? As we know, this Bill will deal with new leases only.
However, the Bill is a start in addressing the scandals and abuses that leaseholders have faced for years. As the Minister said, the problem is that leaseholders receive no clear service in return for these ground rent payments and it is not always clear what costs leaseholders will have to pay when they purchase their home. How very true. A survey for Propertymark, which has been campaigning for leasehold reform for years, found that 57% of leaseholders had no idea of the escalating costs they would face and, tragically, 50% were first-time buyers. Had they known, 93% said that they would not have chosen a leasehold home. They certainly had no idea that their ground rents could double in 10 years. This has been a real scandal, documented throughout by the Leasehold Knowledge Partnership, which has charted years of distress and anxiety among leaseholders.
While we have to wait for that bigger scandal to be fixed, we can welcome the Bill as incredibly important, not least because it abolishes ground rents and therefore cuts off the income stream that underpins the current leasehold system. If investors are not incentivised to buy up leaseholds for their ground rents, that removes the risk they will appoint managing agents who see leaseholders as little more than cash cows. Once that happens, there is a prospect that buildings may start to be run in the interests of the people living in them, as opposed to the interests of investors who see them as little more than accounting entries. It is a systemic change, which can root out abuses throughout the system, and I welcome it as such.
However, inevitably, I have some questions for the Minister. What is the Government’s estimate of the number of homes that will actually be affected when the Bill is enacted in 2023? Given that leasehold properties are not evenly distributed across the country, which areas of the country will benefit most? Secondly, how will the Bill interact with the Government’s plans for reinvigorating commonhold, which we certainly welcome. How will the timetables overlap? I ask this because, if the Government succeed and synchronise the introduction of commonhold plans with this Bill, it is possible that there may be none or very few residential leaseholds to which the Bill will apply because most flats will surely be sold as commonhold.
Thirdly, given that the Bill will become law in 2023, what does the Minister think the effect of knowing that ground rents are about to be abolished will be on the housing market for leasehold homes?
The Minister raised the question of the definition of rent, and I would like him to clarify what he said when he winds up. Does the Bill intend to force future leases to be redrafted to restrict the definition of rent? As he knows, the problem is that many modern leases define rent as including ground rent and service charges and sometimes building insurance. Will that continue or will it be changed? The argument is that, if you exclude them from the definition of rent in strict form, the landlord cannot take advantage of the forfeiture. I would be most grateful for an answer on that point.
The Minister referred to enforcement. The problem is that this is going to be left to the trading standards departments. How realistic is that? He must be aware that those departments are chronically underfunded and under huge pressures, as are other local government departments that have been stripped out, such as planning and conservation. It is really unlikely that local authorities will get involved, not least on the grounds that leaseholders are better off using civil claims to recover prohibited ground rent. What plans do the Government have to encourage local authorities to ramp up the capacity of the local trading standards?
In conclusion, let me return to those not helped by the Bill. It is significant that the property associations welcome the Bill. Indeed Mark Hayward, the chief policy adviser at Propertymark, has said that the legislation will
“go a long way to help thousands of homeowners caught in a leasehold trap”.
However, it has called on the Government to extend the provisions on ground rents to those who already hold a leasehold property to create a “level playing field”.
Power has been in the lands of the freeholder for far too long. Aggressive and escalating ground rents continue to be a scandal against which there is no redress. I know that the Minister understands and appreciates the work of the Leasehold Knowledge Partnership, so he will know of the countless cases it has collected. For example, recently there was a story of a lady living in south London whose ground rent is threatening to reach £1 million in the next 50 years at the rate of escalation. The problem is that in some ways—and this lies at the Government’s feet—the situation of leaseholders has gone on getting worse. The cladding scandal is, of course, in a class of its own, but the extension of permitted development rights is another way in which the rights of leaseholders to protect themselves and their homes against ruthless developers are being lost as upward extensions are permitted outside the protection of normal planning law.
I hope that the Minister, while he basks in the welcome given to the Bill, will also reassure us that the Government are only too aware of its limitations, and the imperative to act fast to protect current—as well as future—leaseholders, who have waited patiently but in increasing anxiety for so long.
Baroness Pinnock (LD) [V]
My Lords, I draw the House’s attention to my relevant interest as a vice-president of the Local Government Association and a member of Kirklees Council.
The basic tenet of the Bill is to be welcomed. The excellent briefing by the House of Lords Library states very clearly the intention that
“freeholders or landlords will no longer be able to make financial demands for ground rent. It seeks to do this by establishing that new, long residential leases are only permitted to charge a peppercorn rent (which has zero financial value) … In addition, the bill would prohibit the charging of administration charges relating to peppercorn rents. The bill would also establish a civil penalty regime for those who charge a prohibited rent”.
The Bill sets out the 26 clauses needed to enact that intention.
The Bill is, therefore, both technical and detailed, and I am sure that other noble Lords will be able to use their expertise to probe and challenge different aspects of the Bill and whether it achieves its stated intention. In her excellent contribution, the noble Baroness, Lady Andrews, has already started to challenge and probe the meaning of the clauses in the Bill. I concur with all the questions she asked; they are both relevant and important.
As the Minister said in his opening speech, there are 4.5 million domestic properties with leasehold agreements, of which approximately 3 million are flats and 1.5 million houses. This is, therefore, not a niche issue but one which affects millions of people. My attention was first drawn to an impending scandal when it was reported in local Yorkshire media some three or four years ago that new-build houses had been bought with the new owners seemingly unaware that the developers had attached a spiralling ground rent charge to the property. As the Minister has stated, the Competition and Markets Authority became involved. The situation has been likened to the mis-selling of PPI. An individual case was highlighted in a report in the Independent this weekend. There, the annual ground rent for a one-bed flat in London, purchased for £170,000 in 2018, was to double every five years. In 20 years’ time, the ground rent will have risen from an affordable £1,050 per annum to a completely unaffordable £16,800. Such abuse is the scandal that the Bill seeks to prevent, by permitting only a peppercorn ground rent and banning administrative charges on ground rents, thus closing any further legal loophole through which leaseholders are at the mercy of unscrupulous freeholders. This is welcome news, but it does, of course, penalise those freeholders who have acted responsibly and not exploited the situation.
The additional huge gap in the Bill is its failure to address the situation of existing leaseholders faced with spiralling ground rent costs. This means that leaseholders—often, but not always, first-time buyers—could be left with costs spiralling to unmanageable levels and their property becoming unsellable. The failure of the Bill to deal with past abuses of ground rent and service charges will leave existing leaseholders in a worse position, because it will create a housing market where new-build properties, with zero ground rents, will be far more attractive than those with spiralling ground rents. Who in their right mind is going to purchase a property with those extortionate additional costs attached to it? Then there is what I define as a scam, which some freeholders are using: the so-called informal lease extension, which also includes clauses of doubling ground rents. Using this approach, freeholders agree to an extension, not of 90 years, which reduces ground rents to zero, but, say, of 125 years, which then has within it clauses which double ground rents every five or 10 years. That is an abuse by some freeholders that has to be prevented.
There is a theme in this Bill, which I have challenged before in relation to the Fire Safety Bill: existing leaseholders being left to hang out to dry or, more exactly, of the Government wringing their collective hands, offering empty promises and absolutely failing to take action to protect those who have been completely failed by existing legislation, by highly profitable developers and by freeholders who have lost all sense of integrity. The challenge for this Bill, as in debates on the Fire Safety Bill, is: what are the Government going to do for the innocent leaseholders? The scandal of flammable cladding and fire safety defects, which the Government have contrived to avoid, is happening on their watch. The scandal of spiralling ground rents hitting leaseholders is happening on their watch. This Bill could have been used to provide wider protection for leaseholders: both the innocent victims of the cladding scandal and construction crisis and, now, those who are victims of abuses and unscrupulous behaviour by some freeholders. Will the Minister outline to the House what effective action is being proposed by the Government to provide redress for those leaseholders who are innocent victims in both these scandals? I look forward to the Minister’s reply and to further stages of debate on the Bill.
Lord Hammond of Runnymede (Con) [V]
My Lords, I draw attention to my interests, as set out in the register, in various businesses associated with property, including long leasehold property, though, I hasten to add, not including residential ground rents. As the Minister has already made clear, this is the first part of a two-stage reform process. I am sure that this afternoon the House will hear many issues raised which relate to stage two and there will, no doubt, be a very deep debate about that stage of the reform programme before we move to it. I shall attempt to focus my comments today on stage one—the Bill before the House.
As the Minister indicated in his opening remarks, this issue has been on the Government’s agenda for some time. When I was serving in the previous Government, it was a live issue in 2018 and 2019 and some considerable time and energy was spent looking at the wider issues of leasehold reform. Residential ground rents have been around for many hundreds of years. It is fair to say that, until relatively recently, residential ground rents themselves have not been the major cause of concern. Service charges, management practices and the broader operation of the leasehold property system have occasioned some concerns, but ground rents themselves generally did not.
Unfortunately, over the last decade or two, as the previous two speakers have outlined, we have seen an increasing practice of ground rents being used not as a nominal annual payment but as a substantive and escalating one. That has been an abuse which clearly has to be tackled now; it has rendered the need for radical reform unavoidable. I note the CMA investigation into the practices of doubling ground rents. I also pose the question: where were the conveyancers of these innocent leaseholders who apparently did not understand the nature of the transaction they were entering? I hope that the relevant bodies will also be looking at whether conveyancers did their job properly during these processes.
So I accept that there needs to be reform; I accept the need for the abolition of long leasehold ground rents; and I say to the Minister that I think that the Government’s current approach of seeking to abolish ground rents rather than leasehold in its entirety—is a much more practical solution. But I want to ensure that the measure is narrowly focused and does what it intends to do.
The Government have, I think, made clear that narrow focus, and that the Bill is targeted at long leaseholds where, typically, a substantial premium is paid by the purchaser of the leasehold interest. The noble Baroness, Lady Pinnock, talked about an example where a premium of £170,000 had been paid for the property, yet there is a recurring ground rent— maybe doubling regularly—that will in future become a substantial payment to be made annually on top of the initial, substantial purchase price. The Bill will make that recurring payment a peppercorn only, so that, in effect, the premium paid for the acquisition of the lease becomes the only payment for the effective purchase of the right to use the property for the duration of the lease, with no further payments due.
The second stage of the Government’s reform programme will deal with rights to extend leases in such a way that, in practical terms, the premium paid at the outset of the lease will deliver almost the same outcome for the leasehold property occupier as the purchase price delivers to a freehold purchaser.
My purpose in intervening today is to ensure that the stated narrow intention of the Bill is delivered in the outcomes. But the Bill does not, as the Minister has already acknowledged, define ground rents, although I think in discussion we all know what is meant by them. The Bill in fact reduces all rents on long leases, whether they are ground rents or not, to a peppercorn. That was not my understanding of the Government’s intention for the Bill. So, if person A buys a freehold residential property and lets it to person B for 25 years at no premium at all but an annual rent of £5,000, that rent, as I understand it, would be reduced to a peppercorn—and that would deliver an unjust outcome. Person A would not receive the rent they legitimately expected to receive. Person B would enjoy the occupation of that residential property for 25 years without paying a single penny at any stage, either as premium or as rent. That is not, as I understood it, the intention of the Government’s legislation.
In an alternative example, a fund might invest in build-to-rent properties but not want to manage and operate them itself, so might grant a 25-year lease to an operating company that would then let the properties on assured shorthold tenancies to occupiers. But, again, unless the business lease exception in Clause 2 applies, I fear that the rent in question could be reduced to a peppercorn.
I am hoping the Minister will be able to clarify and confirm, in his winding-up speech, that where there is no substantial premium paid, and where the consideration for occupation of the property is wholly in the form of an annual, quarterly or monthly rent, it is not the intention of this legislation to abolish that rent—and I hope the Minister will be able to explain how that can be made clear to participants in the market.
There is one other point I seek to clarify: home finance leases, as the Minister has said, are excepted by Clause 2. Clause 2(8) also provides that a lease will be excepted if, inter alia,
“it meets any further conditions specified in regulations made by the Secretary of State.”
If the Government have any plans to bring forward such regulations, it would be helpful if they could publish them in draft. If they do not have such plans, it would be very helpful if the Minister could make that clear, so that any blight placed on the market by the possibility of imminent further regulations is removed.
I support this Bill and the purposes that have been stated to lie behind it. I look forward to the Minister’s clarifications on the points I have raised. Subject to it being clear that the Bill does what we have been led to believe it is intended that it should do, I will be happy to support it and engage in the substantive discussion on the second stage of reform in due course.
The Earl of Lytton (CB) [V]
My Lords, I welcome the opportunity to debate this Bill and in doing so refer to 45 years of professional interest in the matter and my interest as the first chairman of the Leasehold Advisory Service. Although I have personal interests in residential and commercial lettings, they do not include long leasehold and, as a technician, I take no particular position for or against it. I, too, am a vice-president of the Local Government Association.
First, to positive matters: I pay tribute to the Government for moving to tackle some of the known problems and abhorrent abuses with long leaseholds—especially that of escalating ground rents. For years, I have advised clients against taking on such leaseholds, so that maybe makes me part of the problem. But I do think that much swifter action could have been taken to deal with them—but there we are. I welcome the measures. I also welcome the actions of the CMA. But, before we get too excited, I would just point out that 18,000 escalator rents, as I would call them, equate to 0.4% of all leasehold ground rents.
Anything that speeds up the leasehold transaction process is, of course, good for market confidence. So dealing with unnecessary delays is also extremely welcome. However, I do need to point out some procedural shortcomings here. There is an overwhelming case for remedies, so it is utterly extraordinary to me that the department should have chosen to conduct its consultation via SurveyMonkey. The department then found it necessary, on analysis, to allocate a significant proportion of the responses to a category entitled “General comments that did not answer the question”. Undaunted, but finding there some muddle in responses on leaseholders’ payments for various things, it then resorted to regression analysis to resolve the confusion. I suggest that this is not an appropriate way to conduct consultation on such an important matter, and I feel that in this instance it damages the credibility of the process.
The Government also make the point that leaseholders see no benefit from the ground rent they pay—but it is ostensibly for the use of the shared bits they do not own outright. The same could be said of any rent under any lease—or, for that matter, many taxes—so I regard that argument as potentially disingenuous and unhelpful.
I acknowledge that this is the first part of a two-part approach, but I believe that from the consultation there was a clear expectation that other evils would swiftly be dealt with, such as unjustified charges for rent collection, the fees for consent, unfair rent charge situations and more—all of them abuses at the expense of leasehold and freehold homeowners. There was no reason to delay tackling at least some of these, and it is a disappointment that we have an indeterminate wait for action in some of these areas, which has already been mentioned. I am not sure why the whole process needs to be so convoluted and multistage. The means chosen to achieve the Bill’s ends are complex, and complexity leads to loopholes, avoidance and unintended consequences. A part-reform is always hazardous, and this should be a more coherent and thoroughgoing package.
Between muddle and confusion stalks another character, known as dishonesty. Those with a pre-disposition towards fleecing homeowners are not guided by ethical or moral considerations, and there is no knowing what they may dream up next. This might also explain why the Law Commission’s consultation produced minimal responses on intermediate interest—those lying between the freehold and the long leasehold. To me, it is obvious why: sharp practitioners tend to keep their own counsel and their powder dry.
A preference for keeping things simple prompts me to ask why, more generally, there could not be a statutory redefinition of “quiet enjoyment”, a covenant for which is embedded in every leasehold either expressly or by statutory implication. What is there not to like in specifying that this means no unfair, unjustifiable, oppressive, opaque or deceitful activities?
I now turn to some areas where the Bill may have gone more seriously awry. First, as was pointed by the British Property Federation and the noble Lord, Lord Hammond, the Bill would prevent the granting of any residential long lease at a rack rent. It also makes some complex provisions for mixed-use exemptions, but I am far from clear that these and the meaning of “significant contribution” would actually work or be free from challenge. I expect market sentiment to be negative. This may be unintentional but, if not, I ask the Minister to explain it.
Secondly, the timeframe for providing lease information is tight—potentially unreasonably so. I will leave the point at that.
Thirdly, the proposal to render ground rents under long lease as valueless is not a free bet. In any large and complex building in which individual flat owners have ownership over a small portion only and no direct contractual relationship with each other, there is a need to govern how the common parts—the fabric of the building, its services, its uses and the environment in which it sits—are organised. This and the conduct of the respective interest holders vis-à-vis each other and the building they occupy do not happen by accident but by the legal construct of a lease and the enforceability of governance.
If long leaseholds are the time-honoured, legally understood and principal means for procuring occupation and title in a physically subdivided building, they will continue to be a feature for many years to come. It therefore matters that they function effectively and command confidence and that both tenures be made fit for purpose, with freeholders who are motivated, competent, of substance and, above all, engaged. This measure does not consolidate this parallel need, which I fear is sadly out of scope. As I have observed in separate correspondence with the noble Baroness, Lady Grender, and others—I look forward to her speech later—if you think a greedy landlord is a nadir, you have not encountered a clueless, ineffective or inactive one.
The Bill would reduce the freehold rental value in future long leasehold tenure to nil. I may have missed it, but I do not see that the Bill mandates what happens to the truncated rump of freehold interest and the remaining important functions attached to it. What is to stop cost recovery and these being the vehicle for the very same unfair practices we all want to prevent, or to stop these freeholds falling into the hands of unscrupulous entities, perhaps becoming of negative worth or being bankrupt, with significant implications for leaseholders? We are not necessarily dealing with decent people in the ownership of these assets, so to my mind the remaining freehold should be parked permanently in a safe and competent pair of hands. I invite the Minister to explain why he does not feel that this can happen.
There is also the risk of a wider message getting about that residential long leasehold is intrinsically bad. That is untrue, and in so far as it may be intended to accelerate lacklustre commonhold or support some political platform, there is a need to be very careful that market sentiment does not downvalue wholesale—the investments of more than 3 million homeowners, many of whom are already under severe stress due to fire safety matters. I cannot overstate the importance of this.
Should commonhold take off—I wish the work of the Commonhold Council well—it will likely be many years before it is the main form of apartment tenure. Running two systems is inherently problematic for market confidence, and I did not detect from its briefing that UK Finance, the sectoral voice, views this differently. The Law Commission refers to the divergent interests of freeholder and leaseholder. Insurers, building managers, safety regulators and even fellow leaseholders often have divergent interests, yet come together for specific reasons of mutual convenience and necessity. Commonhold may improve this but it will not make these issues disappear altogether.
I end by thanking all the bodies that sent me briefings, as well as the Minister and his staff for responding to my queries and offering to arrange a meeting. I hope that, with good will and understanding, we can improve this Bill.
Lord Berkeley (Lab)
My Lords, I very much welcome this Bill. I am no property expert but I have explained my interest in the Bill—I hope, as other noble Lords have said, that there will be at least one more. I welcome the Government’s statement, I think from 11 January this year, accepting the recommendations to introduce legislation to allow residential leaseholders to extend their leases at zero ground rents for 999 years or to buy it out. This is welcome. Although this Bill does not cover that, it sets some useful pointers—I hope—on government thinking. I declare an interest as living in Cornwall and the Isles of Scilly.
To some extent, it seems that this Bill just covers the easy bits. I hope I am wrong about that, because the noble Lords who have already spoken raised some interesting issues that are way beyond my competence. My understanding—I am sure the Minister will correct me if I am wrong—is that this applies to new build, but does it cover conversions from shops or houses cut into several smaller bits? I suspect many people will wish for some element of retrospectivity in this, but that is probably impossible.
I will concentrate my remarks on Clause 23, which concerns the Crown lands of the Duchies of Lancaster and Cornwall. I am pleased to see that no exemptions are mentioned here. That is really good. However, there is potential for some people who might seek to delay or wriggle out of the spirit and letter of this Bill, which applies not only to this Bill but—hopefully—to the next one as well. I have been seeking assurances from the Duchies of Cornwall and Lancaster and the Crown Estate, for when it comes to the next piece of legislation, about the statements in paragraph 7.150 of the Law Commission report that
“the Crown has given an undertaking to Parliament that, in most cases, it will act ‘by analogy’ with the legislation to give its leaseholders the same rights that they would enjoy if their landlord were not the Crown.”
It goes on to suggest that the commitment is disapplied when the property is in or near
“historic Royal Parks and Palaces”
or has some
“long historic or particular association with the Crown.”
I have been writing to all these groups for comment. I noted that the Law Commission report states that many consultees had negative experiences in negotiating with the Duchy of Cornwall, compared to no problems with the others. I am sad to have to agree with them. I wrote to the Duchy in January asking for its views on this report and whether it intended to follow the examples of the Crown Estate and the Duchy of Lancaster. Four months later, I have not yet had a reply, in spite of several reminders. This leads me on to the situation that the Duchy claims to be in the private sector. My first question, then, is why it should be treated any differently to other private sector organisations.
But then we have the issue, which noble Lords know well, that Ministers have to seek the consent of the Prince of Wales and the Queen. From the Prince of Wales’s point of view, it is odd that the Duchy of Cornwall should have to give consent to a Bill in which it presumably has a commercial interest. Have the Government applied for consent in this case from the Duchy of Cornwall and the Crown? If so, what changes were made to the draft document as a result of either of these questions? This situation seems to be of such concern to some Ministers, and certainly to the Crown, that they do not like even to put this in writing; they have to do it by phone so that there is no record of it. Frankly, I find this pretty non-transparent.
But the Duchy is in a different position from that of the Crown Estates or the Duchy of Lancaster. As I have said, it claims to be in the private sector. But it has all these special privileges—such as Crown immunity, special tax status and free legal advice from the Treasury Solicitor—which other private estates do not enjoy. I think that the lawyers will be rubbing their hands in glee after some of the discussions in this debate today. But this is not the point. This Bill—and, I hope, the subsequent one—provides an opportunity to ensure that the Duchy behaves in the same way as the Crown Estates and the Duchy of Lancaster. All communications should be transparent, and it should not seek special privileges for its property in a manner which is out of line.
To conclude, I will give one example. Somebody I know very well lives in a Duchy-leased house in St Mary’s on the Isles of Scilly. There is nothing special about his house; it happens to be next door to a castle built by the military 200 or 300 years ago. I do not think the Duchy has any title to that at all, and it will not even discuss with him the idea that he could buy the freehold. His house is not historical; it is nothing very special. It is probably a 1960s building. This example is so that all these organisations can agree with what the Law Commission suggests in its report and have the minimum exemptions.
My final question to the Minister is: when do we expect the next Bill? He would expect me to ask that. I am sure he will not give me an answer, but it would be nice to know. I hope to explore some of these issues in Committee.
Lord Stunell (LD) [V]
My Lords, like other noble Lords, I welcome the Bill before us today. Although the scandalous problems currently facing leaseholders in homes covered in dangerous cladding materials will not be alleviated by it, as my noble friend Lady Pinnock so eloquently spelled out, and it will not in any way improve the lot of existing leaseholders faced with escalating ground rents and spurious charges for routine paperwork—as the noble Earl, Lord Lytton, so comprehensively set out—it will nevertheless be a small step forward, and I welcome it. It will, at least to an extent, provide protection in future for new leaseholders from predatory third-party owners and landlords, who are often in it solely for the steady cash flow and income—in fact, not a steady but an escalating cash flow and income. They have very little or no interest in providing even a notional service to those who pay the fees.
So far as it goes, so good. We shall look to move the Bill forward expeditiously—not least because, like other noble Lords, we want to see the Minister honour what he said in opening this debate: publishing the Government’s response to the Law Commission’s report, tabling the second further leasehold reform Bill as soon as possible, and then beginning to tackle some of those existing abuses and malpractices blighting the leasehold sector. But we will also look for some meaningful assurances from the Minister about the timetable for that further reform; I suspect that the answer the noble Lord, Lord Berkeley, will get is, “shortly”. But we need some assurance that real progress will be made—not just shortly, but pretty much immediately. We will also want to examine carefully the safeguards—or, rather, the lack of safeguards—in the Bill for leaseholders against unscrupulous landlords. They will be working hard to find loopholes to exploit in yet more imaginative and lucrative ways to restore their missing cash flow.
I think there is a bigger question for the Minister. If, as the Law Commission has shown and multiple sources of evidence attest, the current leasehold model is fundamentally unfair and inequitable, why is he merely tweaking it in this legislation and introducing a peppercorn rent to neutralise it, rather than going where the evidence leads and abolishing leasehold for new contracts altogether in favour of commonhold? I hope the Minister will explain why the Government are being so timid and cautious in the Bill.
What are the good parts of the Bill, and where could it achieve more even within its limited ambition? First, the proposal to end escalating leasehold charges is long overdue and very welcome, and with it an accompanying regime for monitoring and punishing recalcitrant landlords. For once, the Government propose to give the new power of enforcement to local councils, which is a welcome recognition of their role in the communities that they serve. But the Minister will be well aware—the noble Baroness, Lady Andrews, made this point as well—that local authority trading standards departments have been comprehensively de-fanged, not just by painful cash cuts but by a powerful deregulatory policy drive, coming out of central government departments, for light-touch enforcement of those regulations. That provides no incentive for the diligent use of their existing powers, let alone a commitment of limited resources to a new task. What assurance can the Minister give us today that new funding will come alongside the new powers? I suggest to him that the transfer of any fines which are levied to the budget of trading standards will fall very far short of the costs of investigation preceding that.
Of course, the Minister has a stock answer on funding: funding for any new burdens will be taken into account in the next local government settlement. But if a local council faces a deficit of millions in providing social care, £1,000 or £2,000 for trading standards provides no guarantee of improved capacity. What priority does the Minister attach to ensuring that rogue landlords are prevented from exploiting loopholes in the new arrangements once they see the ready sources of income that they are exploiting dry up?
That brings me to what the Bill does not do for new leaseholders. Here I draw on the briefing from the Building Societies Association and the Leasehold Knowledge Partnership in particular, and I thank them for their assistance. The Bill as drafted does not protect leaseholders from any of the many other imaginative charges that landlords sneak into leases. Unfair transfer fees on sales, grossly excessive charges for permission to improve the home, or imposed contractual duties to take out insurance with the landlord’s preferred provider—none of these will be captured in the Bill. In case a prospective purchaser was inclined to nitpick when presented with a leasehold contract to sign, a requirement to use the landlord’s nominated solicitor helps keep things firmly under his control. I suggest to the noble Lord, Lord Hammond of Runnymede, that that may be one reason why so many people sign those contracts. They are not necessarily getting the top level of advice that they should be, and which I am sure the noble Earl, Lord Lytton, would be providing them.
There is nothing to prevent an unscrupulous landlord continuing with all these highly profitable strategies with new leasehold tenancies in future, not to mention treating residential car parking places as “commercial” and so beyond the reach of the new restrictions altogether. Woe betide any leaseholder who falls into arrears with any of these imposed charges; their lease may be forfeited and their home lost. The Law Commission was clear that this practice is unfair and disproportionate, and yet such a term can and certainly will continue to appear in new leasehold contracts after this Bill becomes law if we do not amend it.
This is far from a complete list of serious omissions from the Bill as it stands, but it all points to a failure to comprehensively reform the sector and tackle well-known and easily preventable abuses. In Committee, my colleagues and I hope to obtain from the Minister some clear assurances and, if necessary, some amendments to the Bill, to ensure that, at least in respect of these matters, leaseholders are given the protection they deserve.
Lord Blencathra (Con)
My Lords, I declare a personal interest as someone who pays ground rent on my flat in London.
I congratulate my noble friend the Minister on his usual courteous and full explanation of the Bill. I just do not know what he has done to draw the short straw again, but I suspect that he will get as much hassle from this House on this Bill as we saw with the Trade Act, China and the Fire Safety Act. However, I shall support it, inadequate though it is, because it is a small step in the right direction and because I have never before been involved putting lipstick on a pig, which the Bill attempts to do.
Before one can judge the merits, one has to look back at how we got here with these things called leasehold and ground rents. I do not mean just looking back at the 2017 consultation, nor the Commonhold and Leasehold Reform Act 2002, nor the 1993 leasehold reform Act, nor even the Leasehold Reform Act 1967. No, to understand where we are coming from, we have to go back a bit further than that—right back 1,000 years to the 11th century and the Domesday Book of 1089, which uses the term “freeholder” for the first time. The term “leasehold estates” appears a few decades later.
Medieval or feudal law was not concerned with hard-working families trying to get on the property ladder; in those days there was no concept of levelling up in Hartlepool or Rotherham. Land meant power in the Middle Ages, and powerful families wanted to retain ownership of their land while maximising their earnings from it. Thus the concept of leasing was established to allow serfs to work a plot of land, for a fixed period, on the basis that they would pay “in kind” by providing food and services to their master further up the social order. Thus, the common law of the landlord-tenant relationship evolved in England during the Middle Ages, based on a feudal social order and an agrarian economy, where land was the primary economic asset and ownership of land was the primary source of rank and status.
Let us roll on 1,000 years, and what has changed today? Nothing of real substance. We may buy a property but find that we are still vassals of a landlord who does nothing for us. We sit in this place as noble Lords and most of us are life Barons, but for those of us who are leaseholders, like the 4.6 million of our fellow country men and women, we are still just feudal serfs paying our masters for nothing in return. I suggest that the whole leasehold system is rotten to the core and has no place in a modern property-owning democracy.
Ground rent is even worse and can be traced back to Roman times, when the solarium, or ground rent, was payable by the lessee of a piece of land. I rather liked studying Roman law as a student in Scotland many years ago and learning, through the Institutes of Gaius and Justinian, how to manumit my slaves. Little did I realise on moving to England and buying a flat, that England still had that Roman equivalent of slavery with its servile property laws, whereby we are bonded to the master for 999 years, paying for nothing in return. It is therefore no surprise that the Normans brought the concept of ground rent to England and, following the 1290 statute of Quia Emptores, the landlord had complete control over the tenant.
I simply do not understand how such an iniquitous system can have survived for 800 years. In the last century we had radical reforming Governments, and even socialist Governments, but we still have a 1,000 year-old feudal law with regard to property ownership. Will the Labour Party opposite bring forth a new Wat Tyler or Jack Straw—the old Jack Straw, of the Peasants’ Revolt—and lead a revolt against ground rent? I hope it will, because I will be tempted to—or rather, I certainly shall—support it.
The Bill seeks to amend 800 year-old rules of common law. I like common law and respect it—it is one of the greatest systems of law in the world—but as far as the property rights of England are concerned, it has long outlived its moral justification. In this Session of Parliament we will debate Bills dealing with the challenges of the technological age: policing the internet, creating an advanced technology organisation, telecommunications infrastructure—all the stuff of the modern age and the future. Then let us look at this Bill. Clause 4(3) states:
“In this Act a ‘peppercorn rent’ means an annual rent of one peppercorn.”
What in the name of God are we doing in 2021 legislating with terminology such as “peppercorns”, a term invented in the late 16th century? Nothing demonstrates how archaic, obsolete and unlevel is our society like the iniquitous system of leasehold and ground rent surviving and prospering to this day.
The Minister hit the nail on the head when he said in his letter to all Peers:
“Ground rents are a charge that leaseholders pay with no clear service in return from freeholders. Unfair practices relating to ground rent have damaged the reputation of the leasehold system and caused substantial difficulties for some leaseholders. We believe that people’s homes should be theirs to live in and enjoy, not designed as an income stream for third party investors.”
There was never a truer paragraph—my noble friend is absolutely spot on—so why must millions of leaseholders be exempted from the Bill and still have to pay for no service?
We have a situation in which all future serfs will be freed from bondage but existing ones must still pay the master. I thought it was quite instructive when my noble friend said in his opening speech that the Government had decided not to define “ground rent” because—I paraphrase slightly—unscrupulous freeholders would use every underhand trick in the book to find a way round it. That is the problem we face: it is not about the innocent, decent freeholders but the unscrupulous ones.
I was going to put down an amendment to abolish ground rent completely, but I understand that landlords could complain to the European Court of Human Rights that they had been deprived of their property rights. Well, we cannot have that, can we? Since the Government like peppercorns, I suggest that we should have a full packet of them. Thus, I will invite the House to support an amendment so that all ground rents, including all present ones, become peppercorn rents. If future leaseholders need to be protected from being ripped off for no service in return, to use the Minister’s words, existing leaseholders are even more deserving of being protected. The Government might say that it is unfair to interfere with the income received from property, but the Government do that all the time when they take up to 12% stamp duty, 28% capital gains and 40% of your money when you die.
In conclusion, therefore, there is no fundamental new principle in limiting the charge of ground rents to a peppercorn. Landlords would not be deprived of their property rights, although in all morality they should be; they would just get a lower income in peppercorns—although that may rub salt in the wounds. Let us build those 300,000 homes per annum as a bare minimum, and let us give existing home owners proper rights to their homes, free from a feudal serfdom system that should have no place in a modern society.
Baroness Jones of Moulsecoomb (GP)
My Lords, I declare an interest as a vice-president of the Local Government Association. It is of course a pleasure to follow the noble Lord, Lord Blencathra. I will sign his amendment to make all ground rents peppercorns, so I ask him to get it tabled as soon as possible.
Many years ago, when I was on the London Assembly and sitting on the housing committee, an officer from Newham Council said that there are many more incompetent amateur landlords than rogue landlords, and plenty of rogue letting agents managing properties poorly on their behalf. In fact, the noble Earl, Lord Lytton, said that much more forcefully. Personally, as a feudal serf of Lambeth Council—albeit that I own my flat, to which it holds the leasehold—I would like to say that not all leaseholders are incompetent; Lambeth Council is superb.
But when we do have rogues and incompetents, councils are hopelessly underresourced to tackle them. I am concerned that the Bill adds more statutory enforcement powers to local authorities without any corresponding increase in funding for them to carry out those functions. Enforcement officers are inevitably faced with choices about which issues to prioritise and will usually have to focus on the worst cases. I noted what the Minister said about being able to recoup costs and that sort of thing, but that sounds to me like a complete failure. The Government need to start seeing housing enforcement as an investment in levelling up the country’s housing stock. Those bad or incompetent landlords act as a drag on our housing. They suck up scarce housing supply, they fail to invest to maintain it and then they sell it back to renters at unjustifiable rates. Local authorities are on the front line in tackling that problem but, without a significant uplift in their resources, they will continue to struggle.
Ground rents on long leases are inherently exploitative, and the Bill recognises that. The noble Lord, Lord Blencathra, called it a timid Bill. I sense that he will probably not vote against it, but the fact is that it needs updating and improvement. It acts only on future leases, as other noble Lords have mentioned. We need to think about what will happen to leases that people are tied into that could last anywhere from 100 to 1,000 years. People are already seeing spiralling ground rents. Although there is a legal process to challenge this, it is quite difficult. For example, there are supermarket companies which own the land on which a block of flats is built, with the supermarket on the ground floor. We have seen cases where the supermarket then uses the leases of the flats as cash machines to fund improvements that really benefit only the supermarket company and, because they have some negligible benefit to the owners of the flats, it becomes very difficult to challenge. It is wrong for people’s homes to be used to subsidise big business like that.
There is a notable exception to this exploitation of leaseholders, and I am very pleased that the Government have included it as an exemption in the Bill. That is the exemption for community housing leases where the landlord is a community land trust or a co-operative society. That is an excellent thing to put in the Bill. As community land trusts and co-operatives exist to serve their community and their members, the usual exploitative nature of the landlord/tenant relationship falls away. There are housing models that should be encouraged, and I should be very happy if the Minister would share his thoughts and plans to support community land trusts and co-operatives to tackle Britain’s housing crisis.
I must say that I am really looking forward to Committee, because noble Lords who have already spoken in this debate brought up a host of issues that will clearly mean a lot of wonderful amendments to the Bill to make it the best Bill it could possibly be—and obviously that will be very exciting.
Baroness Wheatcroft (CB)
My Lords, I must start by declaring an interest as somebody who pays a ground rent. It is not a peppercorn—it would probably buy a few kilos of peppercorns—but I cannot claim to find it too onerous.
The Minister began his remarks by saying that the Bill is intentionally limited in scope, but I can only echo the words of the noble Lord, Lord Blencathra: why is it so limited? It is clearly ludicrous at this stage to be talking about a peppercorn rent. Clause 4(3) states:
“In this Act a ‘peppercorn rent’ means an annual rent of one peppercorn.”
That may explain why weights and measures will be policing this, presumably to check whether the peppercorn is of a certain size and weight. Otherwise, the whole thing is so outdated.
For new properties, the Bill is of course a good move, but existing ground rents need to be addressed. The Competition and Markets Authority estimates, as others have cited, that 18,000 leases have a doubling ground rent clause that applies between every 10 and 15 years. The Minister acknowledges that this is a serious issue. Simple mathematics shows why. If the ground rent is just £200 a year in year one but doubles every 10 years, by year 41 it will be £3,200. By year 71 it will have reached £25,000 a year. No wonder, then, that ground rents are now marketed as profitable investments. According to one of the organisations promoting such an investment, it is possible to generate a return of 5% to 10% a year on a ground rent. Where else can one find such a return without risk and without delivering any service? This is clearly too antiquated.
Of course, one can argue that those who buy leasehold properties with onerous ground rents are subject to the rule of caveat emptor. The noble Lord, Lord Hammond of Runnymede, was eloquent on this subject, and hoped that conveyancers who failed to point this out to their clients would be brought to book. Certainly, there are lawyers out there who are trying to bring such cases and trying to get potential clients interested in such a move. But caveat emptor does not have to apply in every case. Just as the Government moved to protect consumers from onerous interest rates on payday loans, for instance, ground rents now could and should come into the category where people need to be protected by the state.
Clause 2(5) states that statutory extensions will not be subject to these provisions. Why should that be the case? A long lease, many will tell you, is as good as a freehold. Would not this legislation have been the opportunity to demonstrate that, by dealing with the anomaly of escalating ground rents in leases that are being extended under statutory provision? Perhaps reform could go further. Given the existing rights to extend leases, would it not make sense to insist that new properties sold with leases of 99 years or more should be sold with a share of freehold?
Ground rents come on top of service charges. When will the Government move to deal with the malpractice of many landlords in imposing greedy service charges? Far too often, contracts are given to related companies at prices which are really robbing the tenants. These problems often affect new-build properties as much as existing ones—another reason why insisting that a share of freehold should be included in the selling price makes sense. Then the people living in the properties can get themselves together and organise the management of the block.
It is notable that developers of retirement homes have been particularly averse to this legislation. Could that be because they are some of the worst offenders on service charges, yet they argued that they need ground rents as well. They claimed that the ground rents went towards looking after the communal areas—but surely service charges can provide that, and clarity over service charges is what is required in all these situations. So, finally, when will the Government move to make service charges an area that they monitor very carefully and take action on?
Lord Bourne of Aberystwyth (Con) [V]
My Lords, I declare my interests as set out in the register. It is a great pleasure to follow the noble Baroness, Lady Wheatcroft, and I agree with many of the points she made, not least on the antiquated, archaic references to “peppercorn rents”. The Minister referenced how it was not expected that anybody would enforce the provision for payment of a peppercorn. Let us hope not, because if they did, the only people who would benefit would be the sellers of peppercorns, and goodness knows what shortage may be occasioned by everybody claiming and enforcing that provision. It is archaic and has no part in legislation in the 21st century.
I thank my noble friend for setting out the proposed legislation as clearly as he did; it was most helpful. Its purpose, in a nutshell, is clearly to abolish ground rents on long leases in future. I strongly welcome that and this legislation, although I think it could go further, as other noble Lords have indicated. I hope it ends the iniquitous practice, particularly of late, of claiming indefensible ground rents on property that is freehold in all but name and, in recent years, increasing—sometimes doubling—these charges from year to year. That is clearly indefensible. As referenced early on by the noble Baroness, Lady Andrews, Liam Spender, in a valuable article on the subject, said that leaseholders are too often treated as “cash cows” by some disreputable freeholders. That practice must surely end.
I understand why the legislation is not retrospective on rights that are vested long ago. I clearly see dimensions related to the European Convention on Human Rights and so on. That is reasonable. However, I want to probe with my noble friend why the disreputable practice of late of imposing unjustified ground rents is to continue. Since the Government’s declared intention is to render it illegal, why should there be an indulgence, possibly for a further two years, towards those who are putting this in contracts now? I cannot see why that needs to be the case or that the human rights argument applies in relation to it.
Further to that, I have read that it is suggested that the provisions will not be brought into force until 2023, in about two years from now. Can my noble friend indicate why that is the case, if it is? In short, when do the Government intend the Secretary of State to bring the provisions into force, under Clause 25 of the Bill—assuming that it passes according to the programme set out by the Government?
The Bill is relatively short and straightforward, but I would like to tackle some other points with my noble friend and seek his views on the Government’s intention. First, he referred to rent not being defined, because it may lead to exploitation and loopholes being sought. I do not follow that argument; I cannot see why a definition would do that. There are definitions of rent under other provisions and no cross-reference to them in this legislation. I do not think there is a definition of rent or ground rent, except in the most general terms, in this legislation. I cannot see how that is helpful. It is not, for example, clear whether a freeholder making a provision to fix buildings insurance for the leaseholder is within the definition of rent. If it is not, it presents a loophole. As I say, this is not at all clear and I wonder whether my noble friend could provide more information about the thought given to that and the possible loopholes that may arise from there not being a definition, which I can clearly see may be the case. I hope that, on reflection, the Government bring forward an amendment to add a definition of rent to the legislation, because there are clearly practices that could be exploited by a disreputable freeholder, in much the same way as we had action on tenant fees legislation to list procedures that could be permitted. I ask the Government to give some more thought to that.
A second and related area is the permission fees sometimes imposed in such agreements—for example, for keeping a pet—when drawing up the relatively straightforward paperwork that may be needed when permission is needed under the agreement. Again, has any thought been given to restricting the exploitation of such a provision, in the same way as for the provisions that I have just mentioned? These necessary considerations could improve this legislation.
Lastly, I reference an overriding point that has been mentioned by others, including my noble friend in his introduction, on the enfranchisement of existing long leases. Clearly, if that legislation is long in coming, there is the possibility of a two-tier market in leaseholds, which—
The Deputy Speaker (Baroness Garden of Frognal) (LD)
We appear to have lost the noble Lord, Lord Bourne. I think he was coming to an end anyway, so we will go to the noble Baroness, Lady Bowles of Berkhamsted.
Baroness Bowles of Berkhamsted (LD) [V]
My Lords, it is impossible to speak on leasehold matters without acknowledging the dire situation of tenants in properties with defective fire cladding, as has been ably explained by my noble friend Lady Pinnock. It is an extreme example of how leaseholders have been exploited, wronged and left to carry the financial can, and help is overdue.
I welcome the Bill’s intentions to make leasehold fairer and less exploitable, but I regret that it does not do more now. I fear that, without simultaneously plugging loopholes and dealing with legacy matters, it leaves traps and legacy exploitation in its wake. Although it tackles unfair ground rent, it leaves intact freeholders being able to impose transfer fees and other charges. The briefing from the Building Societies Association says that this could be a charge of 0.25% of the sale price, but assignment fees still run at 12.5% at the Castle Village retirement complex in Berkhamsted, and they are similar in many other places.
Ground rents have been rising unfairly in recent years but any income stream related to property, whether from ground rents or estate service charges, is often sold on, traded as a securitised income stream and disconnected from originating responsibilities, assurances and real-life implications. It becomes securitised misery with householders, too distant to be considered fairly, just being treated as commodities and cash cows.
Similar problems have crept into freehold purchases on new estates, with home owners gouged by estate charges and rents, and freeholders not yet having the same rights and protections even as leaseholders. The Building Societies Association gave examples of estate charges of £1,000 per property for maintenance of a 250-property new estate—you can bet that soon escalates—and of ground rent charges seemingly linked to RPI, but with a minimum increase buried in the appendix and frequent reviews, every five years. There are also many reports of estate management companies being slow to provide information during resale or making charges at every turn for doing so.
I looked up some reviews of Trinity Estates, a company that is designated to take over the management of a Taylor Wimpey estate being built now in Berkhamsted, but that manages many others too. “Stay clear” is the message of the reviews, and “hard luck if you are already trapped”. When it comes to later transfers, it seems that Trinity charges £300 just to provide information in response to solicitors’ questions. Others report that, despite paying substantial maintenance charges for gates, they still get a bill every time any work is done on them and that threatening letters follow rapidly, sometimes even after payment.
Estate management company misery is still set to trap hundreds of thousands more every year with the new building that is now happening. Surely all service-type charges, whatever they are called, urgently need to come under a cost-related umbrella, whether to leaseholders or freeholders and whether masquerading as ground rent or something else. Some building societies will not lend where charges are onerous, because it erodes value. In some instances, changes get made, but not everybody has an escape possibility. New-build estate charges are a recent development, councils nowadays not routinely adopting responsibility for roads. As the Building Societies Association briefing points out, there is no council tax discount for those in new builds who do not have adopted roads. I have sympathy with the funding plight of councils, but everybody has been let down by the system that has been allowed to develop and, really, it should stop.
Leasehold is feudal and outdated. It is the only system under which total forfeiture of an asset is allowed when the debt may be only a small part. That is a threat that is waved around to frighten, even where no longer applicable, because it is all in the documentation. If it were invented today, I do not see how it would escape the human rights provisions on confiscation. Frankly, it must be brought to an end. The Law Commission has already consulted on this and found widespread consensus.
I acknowledge that there is more legislative expectation, but can the Minister guarantee that it will stop the estate charge-type scams for freeholders and will help already trapped leaseholders and home owners? When it comes to the largest purchase people make, there simply is not adequate consumer protection. That is what was said regarding PPI, but in comparison that looks mild; PPI never threatened homes.
Like others, I share the concern that councils will not be able to be proactive enforcers. Perhaps a general leaseholder and estate charge ombudsman would be an option. Going to law should not have to be the only effective option, but in the end only comprehensive legislation can stop and reverse the egregious creep of modern feudalism and exposure to extortion now endemic in housing. Will the Government’s future legislation ensure that all aspects are tackled as a matter of urgency?
Lord Best (CB) [V]
My Lords, I congratulate the Government on bringing forward this Bill, with its central proposition to get rid of ground rents for leaseholders. These charges represent payment of “something for nothing” and, when capitalised and sold on, have netted an undeserved windfall bonus for the housebuilders. As the Minister noted, some of the housebuilders have exhibited greed and a complete lack of transparency in charging ground rents that escalate alarmingly.
My maiden speech in your Lordships’ House, nearly 20 years ago, was in the Second Reading debate on what became the Commonhold and Leasehold Reform Act 2002. I expressed the view that this legislation would mean that commonhold would, in time, largely replace conventional leasehold, to the great benefit of occupiers. How wrong I was. Commonhold has never taken off because the oligopoly of volume housebuilders has prevented its growth by offering only leaseholds with ground rents that give them spurious additional profits.
I greatly welcome the imminent end to ground rents. This will enable a much-needed reawakening of the commonhold model, and I am delighted that the Minister has set up a task force to explore the next steps for commonhold. Of course, ground rents will remain problematic for existing leaseholders, so we must look forward to the Government introducing measures to help these occupiers too.
I have two, more specialist points. First, there are some different considerations relating to ground rents for developments exclusively for older people. I declare my special interest as co-chair, with Peter Aldous MP, of the All-Party Group for Housing and Care for Older People. There is a dearth of purpose-built accommodation designed specifically to provide the manageable, accessible, comfortable and sociable retirement accommodation for older people wanting to “right-size” and avoid loneliness and isolation. I am keen, therefore, not to undermine those companies selling well-designed new retirement homes.
Although I know of serious complaints in times past about service charges from the less reputable of these housebuilders, their ground rents can represent “something for something”. When the freeholds are sold on to investors, the sum raised can pay for the capital costs of more spacious communal areas: perhaps a meeting room with kitchen facilities, shared garden areas and so on. While these capital costs could be funded by a higher purchase price, there is a sensitivity that the total price may then deter some purchasers. Moreover, as I read it, the Bill means that these extra costs could not be covered by any form of ongoing charge, any addition to the service charge. So meeting the additional costs of extra space and amenities could be problematic.
This is compounded by the issue of timing for sales of retirement housing schemes. Because the Bill provides a breathing space right through to April 2023, most of the homes where a site has already been acquired will be sold before the ban on ground rents becomes law, so, in negotiating the land purchase, the developer can take account of the absence of any ground rent. But the sales process is often very slow for retirement properties, as I know from experience in housing associations that have sold retirement homes, because older people are much harder to please than young buyers. They will take their time before committing themselves to a purchase. Almost always, and very properly, they want to inspect their potential home when it is fully finished, rather than buying in advance after seeing a show home. They may even want to meet up with the scheme’s manager before taking a final decision.
This means that there will be some retirement housing developments that have not been fully sold out by April 2023, but for which the land had been bought in good faith, with planning consent, before the Government’s decision to end all ground rents was announced in January 2021. In these cases most of the apartments in a retirement development are sold, but a handful are yet to go. Where that happens there will be the anomaly of most occupiers continuing with a ground rent, but later purchasers living next to them not paying these charges. Could the Minister see whether it might be relatively simple to incorporate an amendment to the Bill that exempts from the ban on ground rents that small number of retirement apartments where the developer/housebuilder had started construction works by January 2021 but has still not sold all the apartments by April 2023?
My final issue concerns the property agents handling leaseholds: the estate agents who sell them and the managing agents who collect the ground rents. I had the pleasure of chairing the MHCLG working group on regulation of property agents—RoPA—which, as requested by the then Housing Minister, reported in July 2019. We raised concerns about leasehold and freehold charges, and we made recommendations to government for improvements to this unregulated sector to protect consumers and raise standards.
Improving the lives of leaseholders depends not just on the legal framework, of which the ground rent issue is an important aspect, but on the performance of the property agents who, day by day, manage the properties. Indeed, these managing agents are in the front line of the new arrangements for fire and building safety, for which other legislation is before Parliament and which will involve spending billions of pounds, much of it public money, on leasehold property. Although there are some highly professional and thoroughly commendable firms of managing agents, shocking tales abound of managing agents who behave badly, often with leaseholders ignorant of the misdemeanours because of a lack of clarity, transparency and accountability on the part of the agents.
The RoPA report spelled out exactly how this sector could be properly organised and regulated to protect consumers by licensing agents, requiring qualifications and adherence to a code of practice. Our report was unanimous and came from a group representing the key professional bodies, trade associations and consumer representatives. I believe that the Government remain committed to professionalising this sector, and it would be very helpful if the Minister could tell the House where his Ministry has got to in progressing the RoPA 2019 recommendations.
In conclusion, it is great that the Government are now on the case and taking forward significant improvements for leaseholders. This is the start of an important journey, with more yet to come.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, it is a pleasure to follow the noble Lord, Lord Best, who has a wide knowledge of housing—especially housing policy matters. I remember meeting him some years ago when I was the then Minister for housing in Northern Ireland.
This Second Reading of this small piece of housing finance legislation provides an opportunity for the Government to set out how they intend to fully reform the leasehold provisions within the legislation in England and Wales. Instead, in this instance the Government have chosen to deal with the reform of ground rent. Although this is welcome, it represents only part of the change that is required and is a missed opportunity for the Government to fully address and embrace the needs of communities within the wider housing field.
Last week your Lordships’ House debated the Queen’s Speech; there was much reference to the need for building better for the communities and societies of the future in the post-pandemic phase. A better way to do that is through greater accessibility to social and affordable housing; the sustaining and provision of new jobs; investment in skills and training; the provision of decent homes and a reformed welfare/social security system; regeneration of our towns and cities, and investment in the rural economy. All those sectors are interlinked, and central to them all is the provision of affordable and social housing so that communities have a kick-start as we rebuild out of the marginalisation and disadvantage created by the pandemic. Housing provision offers communities and people a safe basis on which to rebuild their lives following the pandemic, and homes provide that necessary foundation and security to individuals and families.
However, and as a matter of regret, the Government in many ways are still ensuring that the housing market is geared towards the developer and have offered reform only of ground rent, which is referred to by this leasehold Bill. I ask the Minister: where are the other components required in leasehold reform that were promised? In July 2017, the then Conservative Government under Prime Minister May ran a consultation seeking views on measures to
“tackle unfair and unreasonable abuses of leasehold”;
in particular, the sale of
“new leasehold houses and onerous ground rents.”
In December 2017 the Government published their response to the consultation and stated that they would seek to bring forward legislation
“as soon as Parliamentary time allows, prohibiting new residential long leases from being granted on houses.”
The Government also stated that ground rents allow developers to maximise their profits, despite consumers seeing no clear benefit from them. Consequently, they also reaffirmed that they would introduce legislation so that ground rents on newly established leases of houses and flats were set at a peppercorn rate. I recognise what other noble Lords have said—that such a provision could not be retrospective—but could a time limit not have been placed on that to ensure that, in many cases, exorbitant ground rents are truly tackled?
Furthermore, the Government asked the Law Commission to review leasehold enfranchisement to make it easier, quicker and more cost effective for leaseholders to buy their freehold or extend their leasehold enfranchisement. The consultation ran until January 2019 and in July 2020 the Law Commission published its findings. It identified problems with leaseholds and made several recommendations, and in January this year the Secretary of State, Robert Jenrick, stated that the Government would bring forward legislation to set future ground rents to zero in the next parliamentary Session—hence the Bill under discussion today. He stated that it would
“be the first part of major two-part legislation to implement leasehold and commonhold reforms in this Parliament.”—[Official Report, Commons, 11/1/21; col. 11WS.]
The Minister has today referred to the commonhold forum that has been established, which I understand he may chair. In that respect, can he indicate the timeframe for this legislation, which would involve enfranchisement and the whole area of commonhold?
I note that this legislation has been welcomed by the property associations and the Conveyancing Association. Notwithstanding this fact, the property associations have called on the Government to extend the provisions of the Bill to those who would be exempt from it as drafted. Why was the legislation to extend the provisions on ground rents not extended to those who own a leasehold property? Maybe the Minister could provide answers to those questions, which have already been referred to by previous noble Lords in the debate.
I am reminded of the words of the noble Baroness, Lady Andrews, in last Monday’s Queen’s Speech debate:
“There was nothing on the scale of leasehold reform that we were anticipating. Yes, ground rent reform is important, but it is the low-hanging fruit of leasehold reform.”—[Official Report, 17/5/21; col. 408.]
This percipient statement clearly highlights what is not in the ambit of leasehold reform but needs to be, thus highlighting the importance of a more all-encompassing reform of leaseholds. The noble Baroness, Lady Andrews, referred to those issues today in her speech.
There is a need to correct the injustices faced by leaseholders locked in unfair contracts and faced with rip-off costs. The leasehold model needs to be totally reformed to include some of the following provisions: to impose a cap on ground rents for existing leaseholders at 0.1% of the property value up to a maximum of £250 a year; to set a simple formula for leaseholders to buy the freehold to their home, or commonhold in the case of a flat, capped at 1% of the property value—I ask the Minister whether that will be included in future legislation on commonhold; to crack down on unfair fees and contract terms by publishing a reference list of reasonable charges, requiring transparency on service charges and giving leaseholders a right to challenge rip-off fees and conditions of poor performance from service companies; and to ensure that residents are given greater powers over the management of their homes, with new rights for flat owners to form residents’ associations and by simplifying the right to manage. Can the Minister indicate when the Government will be prepared to bring forward supplementary legislation to reflect the foregoing points, which would encompass a total reform of the leasehold system?
I suppose I am a little envious, from a Northern Ireland perspective, because there is not much set out here in terms of leasehold. Rules on leaseholds are set out in individual contracts and there is no regulation of service charges in Northern Ireland. I will be pursuing this legislation—and, I hope, subsequent legislation—with the Minister for housing in Northern Ireland. But, in the meantime, can the Minister indicate whether discussions have taken place with the devolved Administrations—notwithstanding the fact that all matters to do with housing are devolved—about the content of this legislation and future reforms of the leasehold sector?
I have posed several questions to the Minister and look forward to his response.
Lord Young of Cookham (Con)
My Lords, like others who have spoken, I very much welcome this Bill. It is another step along the road of reform that, as my noble friend Lord Blencathra said, began in 1967 with the Leasehold Reform Act, which gave tenants of houses the right to buy the freehold. That was followed in 1993 by the Leasehold Reform, Housing and Urban Development Act, which gave leasehold tenants of flats the right collectively to buy the freehold.
I modestly remind the House that I put that piece of legislation on the statute book nearly 30 years ago. The junior Minister who skilfully piloted it through your Lordships’ House was my then youthful noble friend Lord Strathclyde. This was subsequently amended by the Commonhold and Leasehold Reform Act 2002, which introduced commonhold. In my view, the destination of this journey should be the eventual elimination of leasehold. Here I agree with my noble friend Lord Blencathra, who spoke without restraint a few moments ago about the feudal form of tenure, which exists nowhere else in the world and has no place in a modern society.
Switching metaphors, the Bill before us today is the appetiser for the main course—a more comprehensive piece of legislation to remove some of the inequities of the present leasehold system, which I look forward to and, along with other noble Lords, hope will not be delayed too long. I accept what my noble friend the Minister said right at the beginning: that we should not use this piece of legislation to shoehorn in parts of the more substantial legislation that I hope will follow soon. I applaud the role that my noble friend the Minister has played behind the scenes in moving this whole debate forward. While I am delighted that many builders such as Barratt Homes have abandoned ground rents and are establishing resident management companies, not all are following—hence the need for the Bill.
As many noble Lords have said, although the Bill has “Ground Rent” in the title, nowhere in the Bill is this defined; I will refer to that again in a moment. However, given that “Ground Rent” is in the long title, the Government could have included in the Bill the Law Society’s recommendation that existing leaseholders should be able to buy out ground rents. At the moment, they can in effect extinguish the ground rent but only by extending the lease, which of course involves paying a premium. Many may not be able to afford this but they could buy out the ground rent on the basis suggested by the Law Commission. Might my noble friend include that as a government amendment in Committee, which I am sure would be very popular?
As I said, the Bill does not define “ground rent”; this was raised in the Zoom meeting that the Minister was kind enough to hold with a number of us last week, and it is being raised again today. Clause 22 is headed “Interpretation”. It tells us what a dwelling and a peppercorn rent are, but not what ground rent is. Instead, it says that
“‘rent’ includes anything in the nature of rent, whatever it is called.”
That is very broad and, as my noble friend Lord Hammond said, may capture other elements that are not ground rents. What it calls a “permitted rent” is defined in Clauses 4 to 6, but that definition may go wider than ground rent.
The Explanatory Notes say that the Act is intended to capture any payment under a lease which does not impose an obligation on the landlord to provide a service, but this is not in the Bill. However one defines ground rent—there are definitions in the Law of Property Act 1925, and the Law Society in its helpful briefing for this debate suggests another definition—it is important that ground rents do not reappear under another name. Could this happen by specifying a fixed service charge rising in line with inflation to cover the landlord’s expenses in arranging buildings insurance? This point was made by my noble friend Lord Bourne before he was excommunicated. As the law currently stands, fixed service charges cannot be challenged by leaseholders, but they could be used by freeholders as the basis for secured lending, thus perpetuating the ground rent investment industry. Also, as my noble friend Lord Hammond said, in modern leases and modern case law, rent often has a broader meaning, including ground rent and service charges. Perhaps, as the noble Baroness, Lady Andrews, suggested in her speech, the Bill intends all future residential leases to be drafted so that only the peppercorn rent is described as a rent. Perhaps my noble friend the Minister could deal with that in his wind-up.
I am also concerned at one of the exceptions in Clause 2(1)(b), which my noble friend mentioned in his opening speech. The right in the Bill does not extend to premises where the nature of the business purposes demised by the lease as a dwelling
“significantly contributes to the business purposes”.
In the case of a block that has offices on the ground floor but flats above it, where there is a head lease, does this mean that the flats are excluded from the provisions of the Bill? Speaking from memory, the 1993 Act excluded from enfranchisement premises where more than 25% was non-residential; I wonder why that definition is not used here.
On the commencement date, the noble Lord, Lord Best, made a valid point about retirement homes in the process of being sold, where there was the risk of a two-tier system of ground rents. Hopefully, Wales will move at the same pace as England, but I see that the Bill allows a separate commencement date. Perhaps the Minister can clarify.
I was going to end by saying that I did not see why we needed three days in Committee but, having listened to today’s debate, I am not sure that three days will be enough. However much time is spent in Committee, I hope that this will not delay too long the arrival of the Bill on the statute book.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
My Lords, the noble Lord, Lord Thurlow, has withdrawn so I call the noble Lord, Lord Bhatia.
Lord Bhatia (Non-Afl) [V]
My Lords, as almost the last Peer to speak, I have decided not to speak from the notes that I had prepared for this event. There have been some excellent speeches on the Bill. I mention that of the noble Lord, Lord Best, in which he shared his excellent experience in this field. His reference to retirement homes was very well articulated and I fully agree with what he said.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
The noble Baroness, Lady Gardner of Parkes, has withdrawn so I call the noble Baroness, Lady Grender.
Baroness Grender (LD)
My Lords, as many noble Lords have said, this Bill is most welcome. I thank the Minister for the meeting that he held with me last week, but I think all of us would recognise that this is a first tentative dip of the toe into the vast lake that is leasehold reform. We all hope and are impatient to see the full-blown dive, and we want it to come soon.
It was five years ago that the Leasehold Knowledge Partnership warned the Government of the pending ground rent and leasehold scandals; that was before the tragedy of Grenfell and before the pandemic of the past year, cited as the reason for the latest delay. I believe that we should pay particular attention to its recommendations regarding this Bill; it wants this Bill as a first small step. We must beware the powerful lobby of freeholders and investors who will try to widen the Bill then find loopholes to change it; we should pay attention to the Leasehold Knowledge Partnership’s recommendations with great care.
It has taken too long; the timetable outlined by the noble Baroness, Lady Ritchie of Downpatrick, was helpful with respect to the history of this. This Leasehold Reform (Ground Rent) Bill cannot come soon enough for the leaseholders of tomorrow. As many noble Lords have mentioned, this of course leaves the question of what happens next to the 4.5 million current leaseholders who have been treated as commodities or income streams to be sold to the highest bidder in a feudal system—as brilliantly explained by the noble Lord, Lord Blencathra—in what I will describe as “the peppercorn peroration”. The system, reinvented by wealthy Victorian landowners, is almost unique in the world, in which third-party ground rent investors or landlords often sit in direct conflict with the interests and needs of the leaseholders—the families and individuals who have bust a gut to own a home but, sadly and tragically, been screwed by the small print.
The noble Baroness, Lady Bowles, shared one example of charges of £1,000 per property on a 250-unit site with five-year reviews, while the noble Baroness, Lady Wheatcroft, shared an example of service charges. On Friday, on BBC Radio Four’s “You and Yours”, a lady called Jane Hewland, who bought in 2006, described how she started with service charges of £12,000, which are now £30,000 per annum. I appreciate that, for Boris Johnson, this is an annual takeaway bill, but it is the equivalent of an annual salary for a health worker. The noble Baroness, Lady Pinnock, also described an extraordinary figure that rose from £5,000 to £16,000 on a £170,000 flat in London.
Ever since the attempt in 2002 so ably described by the noble Lord, Lord Best—I am sure I am not the only Peer in this House who is reassured that he has got something wrong, given that he is such an expert in this area—to encourage more commonhold, it has been clear that, in this so-called free market, the people who are not free are the leaseholders themselves. Indeed, government incentives, subsidies and ideology have pushed people into home ownership with unclear leases and hidden charges. Little wonder that the Leasehold Advisory Service, a Government-funded body, has found that 57% of leasehold purchasers have regretted becoming owners—or alleged owners, because of course they have soon discovered that they are not. As one leaseholder said to me last week, “With the fire safety costs and the additional charges for leaseholders, England is the very opposite of a free-market home-owning economy”. Jane Hewland put it this way: “You own nothing, you control nothing and going to court means you end up paying all the charges”.
I therefore support the strong words of my noble friend Lady Pinnock and the noble Earl, Lord Lytton. Alongside my noble friend, I will continue to test every sinew of each law coming through this place to ensure that leaseholders—who, as she always says, did nothing wrong and everything right—get a fair deal when it comes to cladding and the fire safety issue. As she also says, clearly we are dealing with highly unethical freeholders. I also welcome the reform of the regulation of property agents suggested by the noble Lord, Lord Best, and look forward to hearing the Minister’s response on that issue.
I place on record my thanks to the Leasehold Knowledge Partnership, the National Leasehold Campaign and the Building Societies Association for their briefings on the Bill. It is clear from the charities that fight for the rights of leaseholders that this legislation is welcome, albeit a small step. The particular advantage that we in the Lords have is that across parties and with the Government we can sometimes, in Committee and in more informal discussions, have useful conversations that will rule out loopholes and tighten some of the language. This was particularly successful for the then Tenant Fees Bill under the strong leadership of the noble Lord, Lord Bourne, and I hope we can repeat that exercise with this issue so that the fears of the noble Lord, Lord Young of Cookham, about three days of Committee may not come to pass and we can find some easier ground.
We need this legislation soon so that we can get to the main Bill with greater reforms. It is a good first step to strip out of the market the ability for a third party to acquire a freehold and levy charges, so Clauses 3 and 4, which make the permitted rent a peppercorn rent, have our support, although I look forward to hearing the Minister’s answer to the excellent question from my noble friend Lord Stunell and the noble Baroness, Lady Andrews: in the face of all the evidence, why are we settling for this? That said, it is also welcome that there will be no administration fees for the cost of collecting that peppercorn rent. This is an achingly slow process. When it was changed in Australia in the 1960s, it took decades for the inherently unfair system of leasehold to be removed.
In Clause 5, we will look at whether there are some unintended exceptions of shared ownership, and will watch to ensure that a developer cannot use this clause to circumvent the original intention of the law.
In Clause 8, what support will local government have to enforce these changes? I particularly note the comments of the noble Baroness, Lady Jones of Moulsecoomb, and my noble friend Lord Stunell. Will the Minister perhaps consider some pump-priming to get enforcement started? He will already be aware of the current abysmal failure to register rogue landlords, so what can be done to improve enforcement and resource it in the first stage? After all, it is a bit of a chicken-and-egg situation.
That takes me on to some of the things that are missing from the Bill. In his opening remarks, the Minister confirmed that informal lease extensions can continue and can be chosen to include a ground rent for the remaining period instead of a larger up-front sum. There is significant concern that freeholders will put in massive multipliers when offering informal lease extensions just to make the premium look more attractive and lower. In other words, in the period running up to the introduction of this Act, what kind of dodgy deals are going to be done to extend leases where the consumer will come a cropper?
The current, almost barbaric, system of forfeiture for a level of arrears that bears little relation to the overall value of the property is, as my noble friend Lady Bowles said, the only system under which total forfeiture of an asset is allowed when the debt may be only a small part. I look forward to hearing from the Government that there are further reforms on this in the pipeline, particularly following the Law Commission’s recommendations. I wonder whether we should try to put this into primary legislation.
I also look forward to further news regarding the CMA’s enforcement action, particularly against Countryside and Taylor Wimpey for their use of terms that double the ground rent every 10 or 15 years. It is suggested that this breaks consumer protection law. Can the Minister clarify whether it is the Government’s intention to tackle this issue in primary legislation or to wait for the courts if the CMA’s action fails?
We also all wait with some interest and impatience to hear the results of the deliberations of the Commonhold Council set up by the Government and chaired by the Minister. Frankly, as we have heard from almost every speaker, until that thorny issue is concluded, until we end a system almost unique in the world and until we follow in the footsteps of Australia, Scotland, Canada, New Zealand and the USA—to name but a few—the claim that these are the most significant reforms will at least be on hold.
I stress the words of the noble Earl, Lord Lytton, and my noble friend Lady Pinnock, who asked about the unintended consequences of a two-tier system in the market where long leaseholds end up having a bad press and cannot be sold on by the people who own them.
Also missing from the Bill are unfair terms and conditions, unfair estate charges, the imposition of unfair insurance, as described by my noble friend Lord Stunell, redress schemes and commission fees. These are all things we will want to examine in Committee, as well as some of the late changes in transparency of reporting, which Opposition Peers successfully introduced in the final stages of the then Tenant Fees Bill. Therefore, we will look for opportunities to have, for example, a register of reasonable charges, enabling consumers to understand fair pricing and challenge unreasonable costs.
Like the noble Baroness, Lady Andrews, and the noble Lords, Lord Bourne and Lord Young of Cookham, we will also want to explore further how clear the definition of rent is. The Explanatory Notes say that the Act will capture any payment under a lease that does not impose an obligation on the landlord to provide a service but, in modern leases and case law, rent may have a broader meaning. I thank the Law Society for its briefing and concerns on this issue; I also thank Liam Spender of the LKP for his helpful blog on this matter. I look forward to the Minister’s clarification of the use of “assured shorthold tenancies” as described by the noble Lord, Lord Hammond of Runnymede.
This week, Jane Hewland, who I mentioned earlier and who was on “You and Yours”, will receive a bill of around £30,000. She has a flat with no facilities and no garden, and has had no explanation and no warning in advance. For her, and for millions of future leaseholders like her, we need to get on with this Bill and get to the main issue of the current 4.5 million leaseholders as soon as possible. Yes, these are baby steps, or piglet steps for the purposes of the noble Lord, Lord Blencathra, but I look forward to them being fully grown—and soon, please.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I refer the House to my relevant interests as set out in the register, namely as a vice-president of the Local Government Association, a non-executive director of MHS Homes Ltd and chair of the Heart of Medway Housing Association.
The Minister will have heard the speeches of all noble Lords who have taken part in the debate today. I think it is fair to say that everybody welcomes the Bill as far as it goes. I entirely accept that progress is being made and it is welcome, but—there is always a “but”—the issue that noble Lords have mentioned is the pace of reform, which is slow. In fact, it is really, really slow, and it is regrettable. This Bill could do so much more than it is doing.
My noble friend Lord Berkeley asked whether this Bill is doing the easy bits. Sadly, it is doing exactly that. The Government have form here. On a lot of legislation, they like doing the easy bits and making announcements about what will come down the track, but in many cases we are still waiting for what is coming down the track. I am reminded of the Housing and Planning Act 2016—a dreadful piece of legislation. Thankfully, Theresa May got rid of most of it, but regarding the rogue landlord database, which the noble Baroness, Lady Grender, just mentioned, the Act was passed in 2016 and five years later we are still waiting for the legislation to make that publicly available. I hope that we get some progress and are not just kicking the can down the road.
Perhaps the Minister can give us some more detail about when we can expect the more substantial legislation dealing with the real issues, such as the 4.5 million people today who are struggling with unsatisfactory leases. Leaseholder problems are nothing new and neither is the call for the reform. However, the problems have got worse. The Bill’s major failure is that, if you have problems with your leasehold property today, there is nothing here to help you.
The noble Lord, Lord Hammond of Runnymede, made a very fair point about conveyancers and the advice that they gave to leaseholders. I hope that the Minister responds to the noble Lord’s points.
The noble Earl, Lord Lytton, raised the issue of the consultation flaws. I have raised issues about inadequate consultation many times. Again, I hope that the Minister responds to those questions.
The noble Lord, Lord Blencathra, in a most enjoyable speech, set out why the Government must act urgently. We got it all: the Romans, the Normans, the Doomsday Book, the Peasants’ Revolt, Wat Tyler—the only one missed out was Lord Mayor Walworth. However, although it was enjoyable, the noble Lord’s serious point was that reform is desperately needed and long overdue. This goes back so many years. I hope that the Minister takes that on board. We must ensure that this leasehold type of property ownership has had its day and that the Government are marking that, and that this is the start of the process to end that. If that is what we will hear from the Minister, I will be very pleased, because if you are a leaseholder, you can be trapped in very unfair terms and must go on waiting for that leasehold reform, which is unacceptable.
Many noble Lords have described the Bill as “timid”. The Bill is good as far as it goes, but it could do so much more. Why is it so timid and what is the time scale for a more substantial piece of legislation? When will we see it in this House? It would be good for all of us to know, because this Bill is a missed opportunity, and in that sense it is a failure. The noble Baroness, Lady Ritchie of Downpatrick, made these points.
My noble friend Lady Andrews pointed out the huge problems that people face when they buy a leasehold property and then see their ground rent double, as well as other onerous charges. We have heard several times of people being “ripped off”, which is totally unacceptable.
I will be pursuing several issues in Committee and on Report. I hope to persuade the Minister and the Government of the merits of my case, and I am sure that the Minister will want to do the same, but if not, I am happy to divide the House on Report regarding certain issues. Here are some of the issues that I will be interested in looking at. We will be exploring whether we can remove the ground rent from existing leaseholders and put into the Bill a requirement for the Government to begin that work and get a timetable for it to go forward.
There is also the issue of unfair terms and conditions beyond ground rents, which is not addressed anywhere in the Bill. I am talking about unfair terms and conditions such as transfer fees imposed by freeholders on the sale of a leasehold property, which are totally unfair and unjustified.
Another issue is leasehold forfeiture, which has been talked about already today. That is a process whereby somebody can lose their property for a small debt, which is totally unacceptable and needs to be dealt with. The concept is disproportionate in relation to the potential debts involved. The Bill could have been used to stop that practice and put in place a more proportionate system to address issues of debts owed, but it does not do that.
I am also not convinced that the penalties in place to deal with rogue freeholders who seek to illegally charge leaseholders a fee beyond the peppercorn go far enough. Is the maximum fee of £5,000 the right amount? Should there not be an extended sliding scale for repeat offenders?
One of the clauses refers to getting the fee back that has been charged to a leaseholder illegally. If the fee has to be paid back, that is good but I would like to see some interest and compensation for the leaseholder if it was charged to them illegally. I would also want to see larger-scale fees charged to companies that do that, because they probably need to be deterred. If their fee is only ever £5,000, they might well get away with it in some places and think, “Actually, this is worth taking the risk.” We need a much larger fee to deter people from behaving like that.
Another problem the Bill does not address is what people and companies will seek to do to get around this ban on ground rents. By that, I mean a whole new raft of additional fees, special provisions and other charges—generally, rip-off revenue streams which freeholders might seek to place on the leaseholders. These types of fees will be of no benefit to the consumer or leaseholder; it is unfair if they are just cash cows. What will the Minister do to stop this becoming a reality? Let us be clear: some of these organisations have lots of clever people. Their lawyers will sit down and say, “Right—this has been banned, but what can we do to get around it by doing something else?” What are the Government going to do about this? Otherwise, we will be here in a few months’ time saying, “That’s great, but what about these charges?”, and people would be no better off. The noble Lord, Lord Stunell, referred to this in his contribution.
The noble Baroness, Lady Wheatcroft, rightly highlighted the problem of service charges. I have spoken to many leaseholders over the past few months who have been asked to pay a really unfair level of service charge. I often wonder how much these charges reflect actual work done and how much they are a sort of management fee, where they do not get a lot for them. Again, we are not dealing with that and it is disappointing, as the Bill could have dealt with those things as well.
The noble Lord, Lord Bourne of Aberystwyth, highlighted the permission fees. Again, that is another example of leaseholders being ripped off and seen as cash cows.
The noble Lord, Lord Best, spoke about the risk of rogue property agents and others acting in an unscrupulous manner. Often when we legislate in this House, it is not to deal with the good people who play by the rules but to deal with the rogues—the people who just push their luck and pull strokes. How are we going to deal with that, when it is really important? It is not about good businesses but the rogues who will behave badly. The noble Lord, Lord Young of Cookham, mentioned those points in his contribution as well.
This has been an excellent debate with lots that we can generally agree on. There is also a lot to get our teeth into during our Committee and Report stages. I hope the Bill will be given three days, or maybe a bit longer. As we can see from this debate, lots of issues will need addressing. I hope that the Minister will have an open mind—I am sure he will—and want to engage with the House. I think we all want the same thing here; we know there is a problem and are trying to sort it out. It is just that we are a bit more frustrated and maybe want to get it done a bit quicker. We have raised serious points that need to be addressed in the Bill, even given its narrow provisions, so we ensure that when it becomes an Act it is a good one and does what the Government seek to do. With that, I look forward to the Minister’s response and our deliberations in the next stages.
Lord Greenhalgh (Con)
My Lords, I am grateful to all noble Lords for their very valuable contributions and for setting my expectations for the depth of scrutiny in Committee. It has been extremely helpful to hear all noble Lords’ views.
I pay tribute to my noble friends Lord Blencathra and Lord Young, who in many ways set out the historical context for this modest first step in the Government’s programme of leasehold reform. It has taken nearly 1,000 years to establish landlord and tenant law. We started with the Domesday Book of 1089 and then gravitated to the Middle Ages and the feudal system, when the words “freehold” and “leasehold” were formally established. I am surprised that my noble friend Lord Blencathra did not mention copyhold, the form of tenure whereby a serf received a copy of the manorial roll as an indication of where they should live—so they had absolutely no rights at all. That was true serfdom.
In his speech, my noble friend Lord Young showed the relatively recent steps that we have taken. In the year of my birth—1967—nearly 54 years ago, the first Act was passed, and we saw the legislation that he brought in in 1993 and, obviously, the Commonhold and Leasehold Reform Act 2002. That is a little over half a century to reform, so I argue that reform of a system that has taken over 1,000 years to establish is not—and can never be seen as—a quick fix. Certainly, I prefer the description of the noble Baroness, Lady Grender, of this as a small but significant step, as opposed to the metaphor used by my noble friend Lord Blencathra, which I will not repeat.
To return to some of the points made, the noble Baronesses, Lady Andrews, Lady Pinnock, Lady Ritchie of Downpatrick and Lady Wheatcroft, and the noble Lords, Lord Berkeley, Lord Stunell and Lord Kennedy, all pushed for an indication of when wider leasehold reform would take place. Essentially, the Law Commission has made it very clear that bringing in the more detailed legislation will take at least a year, so, ideally, we hope to get this through quickly—notwithstanding the depth of scrutiny in Committee—so that we can bring the second step of the legislation in the next Session of Parliament. That is our objective; of course, events may take place that steer us away from that, but we certainly want to move at great speed to establish that very important second stage.
The Government are committed to reforming the leasehold system. It is complex, and it will take time to get the detail right because, as referenced by the noble Lord, Lord Best, commonhold has not taken root, even though it was introduced and established in 2002. We want to get it right this time: this is very much a first step in getting leasehold reform to work and in the widespread adoption of commonhold.
The noble Baroness, Lady Pinnock, the noble Lord, Lord Stunell, my noble friend Lord Blencathra and many others mentioned and asked about existing leaseholders, who are unhappy with ground rents that their lease requires them to pay. We understand these difficulties and have been working with industry to get existing leaseholds with onerous ground rent terms changed to a better deal. We are pleased that the Competition and Markets Authority is taking enforcement action in relation to two key issues: first, tackling certain instances of the mis-selling of leasehold property; and, secondly, addressing the problems faced by homeowners due to high and increasing ground rents.
It should also be noted that, where existing leaseholders have a complaint about a conveyancer, solicitor, property developer, estate agent, freeholder or management agent, there are existing routes to redress. We have worked with trading standards, which have published comprehensive information for leaseholders to access the right support.
In January 2021, we announced the introduction of a cap on ground rents in the enfranchisement valuation process. This will make it more affordable for leaseholders to purchase their freehold or extend their lease. As we set out in January, we will bring forward those further reforms in this Parliament.
This is not the Bill to address the costs of historical fire safety defects, as raised by the noble Baroness, Lady Pinnock. We will look at measures to strengthen redress and the building regime for high-risk buildings as part of the building safety Bill that will come before Parliament later this year.
Many noble Lords, including the noble Baronesses, Lady Andrews and Lady Grender, and my noble friends Lord Hammond, Lord Young and Lord Bourne, all raised the definition of ground rent. In drafting this legislation, we considered at length whether closely to define the meaning of “ground rent” or “rent”. We concluded that such a definition would likely do little more than offer a fixed target from which a nimble operator could diverge at ease. That is our principal concern. To avoid this, the Bill adopts a flexible definition of rent, which relies on its naturally understood meaning and includes anything in the nature of rent, whatever it is called. I understand that there are some concerns around this, but I can confirm that the Bill applies only to properties that can be considered long leasehold tenure with residential use. I am happy to meet noble Lords again to discuss the matter further. My noble friend Lord Hammond of Runnymede gave an interesting “person A to person B” example involving passing on a shorter lease of some 25 years where no premium was charged and then establishing a rent. He asked whether that would be covered. We recognise my noble friend’s concern and can be clear that it is not our intention to cover market rents and restrict those to a peppercorn. The Bill is forward-looking, so current investments are protected, and it applies only to leases of over 21 years. However, I would be happy to meet him and discuss these concerns further.
My noble friend Lord Hammond also mentioned the publication of regulations. There is no secondary legislation in relation to home finance plan leases. Clause 2(8)(b) is a reserve power which will be used only if abuse occurs and the Secretary of State needs to specify further conditions to deter such abuse. We have no plans to introduce conditions on the sector.
My noble friend Lord Young mentioned buying out existing ground rents. He will forgive me if I say that it was an issue also raised by my noble and learned friend Lord Mackay of Clashfern. Leaseholders of flats can already buy out their ground rents. Leaseholders of houses can do it by buying their freehold, which I appreciate can be prohibitively expensive. In January, we announced plans to reform the valuation process, which will cap how rent is treated and reduce the premium to be paid. The Law Commission has made specific recommendations in this area, mentioned by my noble friend, which we are currently considering.
Many noble Lords, including the noble Lord, Lord Stunell, and the noble Baronesses, Lady Bowles of Berkhamsted, Lady Andrews and Lady Grender, mentioned the important issue of resources for trading standards. We are very clear that funding for new burdens and new requirements will be taken into account in future local government settlements—I know that response was predicted by the noble Lord—but enforcement authorities will also be able to retain the proceeds of any penalty imposed by them. Penalties can be up to £5,000 per breach. If someone is doing this multiple times, they face that fine on multiple occasions. I am sure that we can explore in Committee whether we consider that to be enough, but that is currently what we have set, and it can be applied multiple times to an individual who perpetrates the breach on many occasions. We will publish guidance to local authorities and trading standards to help them enforce the Bill and work closely on implementation.
The noble Lord, Lord Best, an expert on retirement housing, asked whether the transition period was long enough. We believe that those who purchase retirement homes should benefit from the same reform as other future leaseholders. Including retirement properties in the Bill means that they are not exempt.
That does not change the way in which other types of charges such as event fees can be used in the retirement sector, but I am happy to discuss this further with the noble Lord, as he brings a wealth of experience, including in the regulation of property agents. I thank the noble Lord for the invaluable work that he led in that area, with the publication of the report on the regulation of property agents. We welcome the working group’s final report. The recommendations are with the Government for consideration, and we are committed to ensuring that those living in the leasehold sector are protected from abuse and poor service and to raising professionalism and standards among property agents.
The noble Baronesses, Lady Wheatcroft and Lady Ritchie of Downpatrick, raised unreasonable or egregious service charges. We believe very strongly that any fees and charges should be justifiable, transparent and communicated effectively and that there should be a clear route to challenge or redress if things go wrong. The law is clear that service charges must be reasonable and, when costs relate to work or services, the work or services must be of a reasonable standard. We will continue to be very vigilant on that matter and will consider any other measures that we need to take as part of our second step on the road to leasehold reform.
The noble Lords, Lord Stunell and Lord Kennedy, referred to other abuses. I point out that the Bill as drafted covers administrative fees so that we can stop freeholders who charge fees for the collection of a peppercorn ground rent, which would be frankly ludicrous, as it is a peppercorn that we do not even need to see levied. We will continue to look at fees such as those mentioned by the noble Lords, Lord Stunell and Lord Kennedy—transfer fees, permission fees and transfer charges. We welcome the report from the noble Lord, Lord Best, that looked at those issues, and we are considering his recommendations.
The noble Baroness, Lady Bowles of Berkhamsted, mentioned the estate charges scam. We intend to legislate to give freeholders on private mixed-tenure estates equivalent rights to leaseholders to challenge the reasonableness of estate rent charges, as well as the right to apply for the First-tier Tribunal to appoint a new manager to manage the provision of services covered by estate rent charges. It is important that there is a level playing field.
The noble Earl, Lord Lytton, asked why we should not bring about a statutory redefinition of “quiet enjoyment”. We have not looked at the statutory definition of quiet enjoyment as part of the legislation; the Bill does not affect rights to charge and receive ground rents for commercial premises in mixed-use development when the lease for the commercial premises is held on a separate lease from the residential part of the development.
The noble Lord, Lord Berkeley, wanted some clarification on the scope for new leaseholders’ conversion of houses into flats and retail into housing. I can provide the assurance that the Bill will apply to all new residential long leases, including in those instances exceeding 21 years. That includes those new leases created as a result of subdivision or conversion of properties. He also asked whether we had applied for consent from the Crown and, specifically, the Duchy of Cornwall. I can say that consent was sought and granted in writing from the Crown and the Duchy of Cornwall, and no changes were made.
The noble Baroness, Lady Ritchie of Downpatrick, wanted to know about the Government’s discussions with devolved Administrations, especially Northern Ireland. I point out that the legislation applies to England and Wales only. However, early discussions with Northern Ireland officials took place to help to inform the development of the policy.
I hope I have done my best to cover the principal points. This is necessarily tightly focused legislation which will improve the leasehold system for future home owners. The Government are therefore keen to get this Bill on the statute book as quickly as possible so that the new measures can take effect. I will be grateful for the support of noble Lords in achieving this.
This is only part of the start of an ambitious package of leasehold reform, with further legislation on a wider set of measures to follow later in this Parliament. As I have indicated, this will come in the next Session, I hope. This Bill is small, but it is vital and it is a step towards the better, fairer and more transparent leasehold system that the Government are committing to delivering. Therefore, I commend it to the House, and I beg to move.
Arrangement of Business
The Deputy Speaker (The Earl of Kinnoull) (CB)
My Lords, the Hybrid Sitting of the House will now resume. I ask Members to respect social distancing.
Britain’s Railways
(3 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Rosser (Lab) [V]
Television has given us “The Great British Bake Off”, “The Great British Sewing Bee”, “Great British Menu” and “Great British Railway Journeys” as programmes for our delectation and entertainment. Now the Williams and Shapps plan, determined not to be outdone, but hardly in a display of originality, is offering us Great British Railways. The Secretary of State is at pains to tell us that the proposed changes for our railways, extending the role of the public sector, are simplification not renationalisation. The changes may not mean full public ownership but they are certainly a further step closer to it, and would make the final switch easier, which is no doubt why the Secretary of State doth protest so much.
The plan does a demolition job on the failed, fragmented privatisation of our railways and the insuperable problems it has created, which the Secretary of State now admits can no longer be allowed to continue. The plan is basically a statement of hope and assertions about what the proposed new structure and Great British Railways will deliver. The shadow Secretary of State has already written to Grant Shapps with questions on 15 initial specific points and we await a detailed written response. I will, though, make a few points now.
The plan makes great play of 400 jobs that exist to determine the allocation of blame for delays. The need to do this will seemingly disappear under Great British Railways. Yet the Government talk about incentivising train operators to run services on time. Whether that also means penalties for running services late is not clear. Either way, there will presumably still be a need to determine where responsibility for a delay lies, since it would hardly be appropriate to attribute to a train operator, on a management contract with incentives to run services on time, responsibility for a passenger train delay caused by a track or signalling failure or another operator.
We need to know far more about how the proposed incentives regime will work and its potential rewards and for whom. Even Great British Railways is going to be incentivised. The plan refers to the perverse effect of incentives under franchising arrangements. We could be in danger of going down that same path again, despite the repeated assertions in the plan to the contrary. Train operators will continue to bear cost risk, but there will be incentives to run trains to time, to run clean trains, to run safe trains, to run high-quality services, to manage costs, to attract more passengers and to work with other railway organisations for the greater good. It will be some bureaucracy that will be needed to devise, manage and supervise that sort of regime if these are more than token gesture incentives—and all because the Government are not prepared to countenance Great British Railways operating the rail services itself.
That is also why the plan represents change from what we have at present, rather than the transformative, generational change that the Secretary of State wants us to believe. There is little more than a passing reference in the White Paper to the rolling stock leasing companies. No case has been made for why, almost alone, they need to continue in their present form, or indeed at all, in a situation where Great British Railways will have ownership of the railway infrastructure and assets, apart, it seems, from the rolling stock. This is despite the plan asserting that the new structure will increase Great British Railways’ purchasing power and economies of scale, and bemoaning the fact that we have so many variations in rolling stock.
Likewise, from reading the White Paper one would hardly know that we have elected metro mayors with responsibilities over transport. Giving metro mayors much greater responsibility, certainly for local rail services within their areas, and the associated resources, is not something that appears to be being entertained. It looks as though Mr Grayling’s boast as Secretary of State that he would not hand over control of rail services to a Labour mayor may still inform the Government’s claimed non-ideological approach.
We will need clarity on what specific responsibilities and powers are being transferred from the Department for Transport to Great British Railways, and what specific railway responsibilities and powers are being retained or created within the department. Likewise, we will need clarity on the impact of the proposals on the powers of the devolved Administrations. I assume that the transfer of undertakings regulations will apply to all staff transferred from their existing employer to Great British Railways or any other railway organisation. Legislation will be required to implement some of these proposals, not least in relation to the creation, governance, roles and responsibilities of Great British Railways and other statutory bodies whose remit is changed.
The plan refers to financial resources covering five-year periods. One assumes that also applies to Great British Railways. Those resources need to be guaranteed if service levels and quality are to be maintained and improved, and rolling programmes of investment sustained, but the plan does not make it clear whether that will be the case or how. We are already hearing noises that the Treasury is demanding significant savings. Indeed, the plan asserts that the new structure and working procedures will save £1.5 billion.
I pay tribute to the role and work of railway staff during the pandemic. I hope the Government are determined to see our railways make a full recovery from its effects and then develop further, because the plan blows a bit hot and cold on this. The foreword says:
“Much of the old demand will return … This government profoundly believes in the future of the railways. Without them, our cities could not function … We are growing the network, not shrinking it.”
Yet tucked away in the section of the plan on “Empowering rail’s people”, it states:
“The future of the sector hangs in the balance.”
That is a very different tone. Which represents the Government’s true thinking and intentions will become clearer when we find out whether the emphasis of these changes is on achieving a rapid reduction in costs, at all costs, or on growing the network and recognising that the value of our railways to the quality of life of our citizens and the economic well-being and strength of our country extends far beyond the content of a Treasury financial spreadsheet.
Baroness Randerson (LD)
My Lords, I strongly welcome this long-overdue plan for reform and thank Keith Williams for his work on this. My only regret is that it has taken this long to get here. The industry has been crying out for reform for many years; one in three trains was late in the last year before the pandemic and two-thirds of contracts since 2012 have been awarded to single bidders—hardly a sign of a vibrant, competitive industry.
However, unlike some, I do not believe that the answer lies in a return to British Rail, which ended in stagnation and closures and as the butt of rather predictable jokes. This Statement harks back to the glory days of the 19th century, but the last 60 years have all been a bit of a mess. For a long time, the Transport for London contract structure has been touted as the answer, with the appropriate balance of risk for private contractors yet a fully integrated service. However, Transport for London has said publicly that it took it two decades of experience to get to the ideal contract model.
This is welcome, but it does not mean it will be easy—I do not for a minute imagine that the Minister thinks it will. The sheer scale of the thing is a problem. Great British Railways will be a massive organisation, bringing together Network Rail, many other DfT functions and some of the Rail Delivery Group functions. Currently DfT has three director-generals to cover rail services alone. The new organisation will be enormous and complex, and freedom from direct government interference will be essential for success.
The first problem is that, despite the name, Great British Railways is not really British, because it does not cover most of Scotland, Wales, Northern Ireland or London. Those have devolved services. So, my question is an important one: how will GBR liaise and link in with those other services? It is essential that that link is smooth and coherent. And what about the devolution of services to local authorities, which has been encouraged lately? Local authorities can add a great deal to the standard of service. There must be a role for them in order to raise the threshold. I rather feel that the word “Great” will be at the mercy of headline writers the first time something goes wrong—but I think there is the potential to get a coherent picture of the whole, so long as devolution is taken fully into account.
In interviews, the Secretary of State has indicated the likelihood of fare rises. First, how much power will the Department for Transport have to intervene and dictate fare rises? Secondly, is it wise to raise fares at a time when the Government are trying to reduce emissions and rail services are desperately trying to attract passengers back after the pandemic? Fares are up 50% in real terms since 1997; they are the most expensive in Europe. I welcome the details on flexible season tickets and other long-overdue innovations, but the Government predict savings of £1.5 billion within five years—so are fare rises justified?
The Minister will tell us again that taxpayers have subsidised the railways to the tune of billions of pounds in the last year. In fact, they have subsidised train operating companies, not the passengers themselves. Taxpayers also subsidised Eat Out to Help Out, but the Government are not expecting restaurant customers to pay more now to refill government coffers. So I put in a plea: rather than raising fares, now is the time to reduce them for a short period, to lure people back on to the railways and, as new travel and working patterns emerge, to encourage new leisure rail users?
Finally, freight. The combination of recentralisation, better co-ordination and the current lower passenger numbers provides a big opportunity for bold steps to improve and increase freight services. But that needs capital investment, too; will we get it?
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
I thank the noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, for their generally—I think—fairly positive welcome for these proposals. The noble Lord, Lord Rosser, had a long list of Great British XYZ, and perhaps I may say, as we come out of restrictions, I feel we have a Great British bounce back coming along. So, what are we going to do about our railways and Great British Railways, which will be one of the “Great Britishes” that will be so important to us as we go forward?
The noble Lord, Lord Rosser, seemed to be a little bit muted on the subject of the changes we have proposed. I do believe that we are proposing a once-in-a-generation change. It will be a massive transformation of the current way our railways operate, and it will lead to very significant improvements in service to passengers. But the noble Baroness, Lady Randerson, is absolutely right: it will not be easy. This is a national infrastructure with national services; it is hugely complicated now and will continue to be in the future. We know that. It will not be easy.
So the scale of transformation will have to be taken in bite-size pieces, and we will have to think about how the development of these phases will happen. Andrew Haines, who, as we all know, is the current chief executive of Network Rail and a well-respected industry leader, will be developing these interim arrangements for Great British Railways. It is important we do that. We could not have done it before because we had not announced the White Paper, and we will be establishing phases for the delivery of Great British Railways and all the phases that have to happen in between. We will be working collectively and collaboratively with the sector, and that is really important.
On the DfT side, I am well aware that there are an enormous number of very talented people in rail. We will continue to support Great British Railways as much as is needed in the short term. The DfT will establish the rail transformation programme, which will assist Andrew Haines and the wider sector as we make these changes.
The noble Lord, Lord Rosser, talked about how the blame for delays will not disappear. I agree. I asked exactly the same question about big birds and little birds, and whether you could be blamed for one and not the other. I am reassured that it will be vastly simplified and will not be as complicated and long-winded as it is now.
The noble Lord went on to mention the incentives regime. It is important that we have a really firm and accountable incentives regime, because we must lift the quality of services for the passenger. Therefore, we will incentivise high-quality, punctual services. We will ask operators to manage costs and to attract passengers. From a ministerial perspective, we will hold Great British Railways to account and it will hold the holders of the passenger service contracts to account via statutory powers and the ability to issue binding guidance—for example, on any of the elements the noble Lord mentioned.
We believe that there should continue to be private sector investment in rolling stock, but the noble Lord highlighted the slight tension that exists. We will ask Great British Railways to take a strategic approach to the overarching issue of rolling stock. It will look at supply chain sustainability, for example, and how to generate high-value jobs in the UK, but the TOCs will still be responsible for procuring value from the market and improving the passenger experience when the trains are running.
Devolution is a very important part of improving our transport system. I am speaking specifically about devolution to the local transport authorities. That would include the metro mayors. We are extremely keen to work with the metro mayors on devolution. The White Paper publication is a significant landmark as we start the process of these implementing reforms, but it is obvious that they cannot be devolved immediately. We will work together to think about how the structures with the metro mayors and the smaller local transport authorities will work and where they will be able to take a greater level of control of the services in their area.
Scotland and Wales are both extremely important in this regard. Both will exercise their existing powers and be accountable for them. The infrastructure is, of course, all owned by Great British Railways, with the exception of some of the valley lines in Wales, and we will work in partnership with Transport Scotland and Transport for Wales. We would expect a good relationship with them, because it is so important for the services to improve.
Great British Railways will have a five-year business plan, which will be drafted in the context of a 30-year strategy. It will set out the infrastructure funding settlement for that five years and the level of operational subsidy. This will give certainty and stability to the network as a whole.
The noble Baroness mentioned fare rises. I suspect that my Secretary of State would not rule them out, but we have to simplify the current mass of ticketing options and prices and the endless bits of paper that you have to carry around with you. We will look to introduce more pay-as-you-go, more contactless payment and more digital ticketing as soon as possible.
The noble Baroness mentioned some short-term incentives to get people back on to the trains. The Department for Transport has commissioned Network Rail to look at this. It has set up the rail revenue recovery group, which we will look to for advice on short-term and long-term interventions on fares. This links back into the recovery in demand, because we want people to come back to the trains and we hope that the number of passengers will grow further. Financial sustainability is linked to demand but not necessarily on a very firm basis, because it depends on how much passengers are paying.
Therefore, it is the case that we have to make sure that our railways are financially sustainable in the long term. On one side, we will look at how we can improve services to passengers, as well as at fares, and on the other side we have to look at how we will modernise the system with regard to some areas where there might be changes to the ways in which people work. We want to develop skills and perhaps use them more effectively within the system. That will be up to the industry, working with the unions, to develop the best and most highly-skilled workforce that we can for our industry.
I hope that I have been able to answer the questions asked by the noble Lord and the noble Baroness. I thank them genuinely for their positive engagement, and I am sure that there will be more questions to come. I look forward to comments and questions from all noble Lords, and I hope that they will consider joining me at the all-Peers briefing section with the Rail Minister on Wednesday.
The Deputy Speaker (The Earl of Kinnoull) (CB)
My Lords, we now come to the 20 minutes allocated for Back-Bench questions. I ask that both questions and answers be kept short.
Lord Haselhurst (Con) [V]
My Lords, I remind the House of my interest as chair of the West Anglia Taskforce. Does my noble friend except that this railway, having only two tracks, demonstrates the impossibility of satisfying the competing needs of Transport for London, Hertfordshire and Essex commuters, freight operators, the advanced industries around Cambridge and the operators of Stansted Airport? Will the creation of GBR offer a better prospect for the restoration of the two extra tracks that were torn up after the Beeching report?
Baroness Vere of Norbiton (Con)
My noble friend raises an important point and highlights why Great British Railways is so desperately needed, in that we have so many different operators and indeed types of train services—be they passenger or freight—trying to access limited track in certain areas. It is the case that we will continue to invest tens of billions of pounds into the railways on new lines, trains, services and electrification; we want to provide the stable foundation for innovation and future investment. My noble friend mentioned the Beeching closures. The £500 million Restoring Your Railway Fund remains open, and any ideas should be forwarded to that fund.
Lord Craig of Radley (CB) [V]
[Inaudible]—the experience, particularly of Southern, has been blighted from time to time by industrial disputes. What involvement have the rail unions had in helping to formulate these new plans? Post Covid, many people may continue to work part-time from home, reducing passenger numbers below the 2019 figure of 1.8 billion per year. What assessment have the Government made of this likely reduction?
Baroness Vere of Norbiton (Con)
On the first issue raised by the noble and gallant Lord, Keith Williams met with the general-secretaries on a number of occasions while he was carrying out this review. As I previously mentioned, we need to create an efficient and sustainable railway; that is in the interests of passengers, taxpayers and the workforce as a whole, so we will of course continue to work with the unions to achieve that as we take these reforms forward. On future demand, we are confident that people will return to the railways, and in line with the road map we will continue to work closely with the sector on measures to enable people to come back again, and to come back quickly. This includes the introduction of a flexible season ticket, which will be introduced across the network and which will make it easier for those people who commute, say, two or three days a week. It will make that more cost effective for them, and that will be introduced to coincide with the final step of the Government’s road map out of lockdown.
Lord McLoughlin (Con)
My Lords, I draw attention to my interests as set out in the register. I welcome the Williams report, but we should recognise the very great changes that were brought about by privatisation. Up until 1992, the number of people using our railways was 700 million. In 2019, it was 1.9 billion. That was a tremendous success, which was partly brought about by engaging with the private sector so that we got better services across our railway network. While I accept the necessary changes that the Secretary of State and my noble friend have set out, will my noble friend also acknowledge the very important part played by the private sector, and will she say that the private sector will be very much seen as partners in the way forward?
Baroness Vere of Norbiton (Con)
My noble friend is absolutely right: during privatisation, passenger numbers more than doubled, so the involvement of the private sector has had a transformational impact on the way that we run our railways today. This Government want to keep the best elements of the private sector. We want to keep its capacity for innovation and work with it to drive growth in the railways. We will do that by having these new contracts for passenger operators, with strong incentives to run very high-quality services.
The Deputy Speaker (The Earl of Kinnoull) (CB)
The noble Lord, Lord Adonis, has withdrawn, so I call the noble Lord, Lord Bradshaw.
Lord Bradshaw (LD) [V]
My Lords, I believe it is very important that a clear distinction is made between what Ministers do and what Great British Railways does. It is important that they do not tread on each other’s feet, because that will lead to disputes and trouble. A clear financial target, preferably for three or five years so that the industry can make trade-offs without constant Treasury interference, will give the freight railway a chance to do what it does best. An electrified freight railway will make huge inroads into the amount of fuel we burn with lorries. Lastly, we need to follow best practice in using data to improve the passenger experience. Do not level down to the standards of the worst performer; rather, level up to the standards of the best.
Baroness Vere of Norbiton (Con)
Those were some very interesting observations from the noble Lord, who is clearly well versed in the railways. He is right that we need to make sure that Ministers’ responsibilities are separate from those of Great British Railways, which is why we are proposing strong levers to hold them to account, but will not meddle in the day-to-day running of the organisation. So there will be statutory powers and the ability to issue binding guidance in specific areas, which will be important.
The noble Lord mentioned planning, and I have already pointed out that there will be five-year business plans within the 30-year strategy. He also mentioned freight, which is a very important part of this. It is often a forgotten area of the railways, and we believe that it will benefit from the national co-ordination that Great British Railways will bring. His last point was on data, which is one of the key areas where we feel that we can improve customer satisfaction. Historically, data has been held by the train operating companies and not shared as well as it should have been. By putting all this data and responsibility for revenues within Great British Railways, we will necessarily bring together all the data. We believe that from that we will not only simplify tickets but think of better ways to use that data to provide more value-for-money services for passengers.
Lord Davies of Gower (Con)
My Lords, as a frequent user of Transport for Wales and GWR from west Wales to London, I very much welcome this Statement. It is good to see the travelling passenger put at the forefront, in ticketing and the adoption of modern, flexible ways to pay. I note the comments that close collaboration is promised between Great British Railways and the devolved nations. Can the Minister perhaps elaborate on how the new ticketing system will integrate, for ease of use by the travelling public, with the payment systems of the now nationalised Transport for Wales and the proposed south Wales metro scheme? What conversations have the Government had with the Welsh Government on this?
Baroness Vere of Norbiton (Con)
Our engagement with Transport for Wales and the Welsh Government has been very significant and over a long period, both at ministerial and official levels. Next, we want to develop a joint working agreement with Transport for Wales and Great British Railways, so that all issues around fares, not only within Wales but for cross-border services, can be considered in the round. We would like them to join us in sharing data and using the single website and app to purchase tickets. We cannot force them to do that, but we look forward to having a close working relationship as we take this forward.
Lord Harries of Pentregarth (CB) [V]
Does the Minister agree that rail fares are already far too high—the highest in Europe—but that if they are to be kept at a reasonable level, it is necessary for railways to carry more passengers? This means increasing the capacity and more investment. Are the Government willing to put in the necessary investment? Of course, this would also be highly desirable from an environmental point of view. I understand that Chiltern Railways—which in my experience has always been very efficient—has in fact put in a lot of investment in recent years. I wonder what lessons there are to be learned from its example.
Baroness Vere of Norbiton (Con)
I think there are lots of ways to attract passengers back on to the railways, and investment in improving capacity is one of them. Of course, that is why the Government are investing many billions of pounds in HS2, which will release capacity on other lines to enable more short-distance services to be put into place. But it is not just about those mega-projects; it is about the small and urgent network capacity upgrades that we can make, and the Government continue to look at these. I reassure the House that the RNEP—which sets out which projects the Government will take forward over what sort of timeframe—will be published soon, and that will set out all the schemes under consideration.
Lord Snape (Lab) [V]
Does the Minister accept that we have spent many years listening to Conservative Ministers extolling the virtues of franchising, yet the White Paper acknowledges, in effect, that the franchising system has been an expensive failure, the abolition of which is long overdue? On rail freight, what actions will Ministers take to ensure the future success of the rail freight industry if we are to achieve a meaningful transfer of freight from road to rail and reduce the number of heavy goods vehicles on our roads? Will Ministers reject the RHA’s incessant demands for bigger and heavier lorries on our overburdened road network? Does the Minister agree that, properly encouraged, rail freight could make a significantly greater contribution towards the Government’s carbon reduction targets?
Baroness Vere of Norbiton (Con)
I cannot agree with the noble Lord that franchising has been an expensive failure. We have seen an enormous growth in passenger numbers as a result of the involvement of the private sector, and I think that has given us a really firm foundation from which to go better. However, rail freight is a topic that we can probably agree a little more on. I believe that it will benefit from this national co-ordination, as I said earlier, and we will consult closely with the freight industry to find out what challenges it has and how we can help it by making changes. We will introduce a new rules-based track access regime, which will have a statutory underpinning. That will be relevant for both freight and open access operators. We believe that that will yield more goods going by rail freight, and we will engage with the industry to make sure that this is the case.
Lord Beith (LD)
My Lords, train operators run many stations. If a train operator such as LNER runs stations well, enhancing facilities to support customers and promote its services, would it not make more sense to contract it to continue to do it, rather than doing what the Government propose in this White Paper, which is to transfer station management entirely to this behemoth of an organisation—Great British Railways—where it may well be administered from some distance away? We would end up with two lots of staff on the platform, with one administered from a great distance.
Baroness Vere of Norbiton (Con)
The noble Lord raises an interesting point about stations. Stations are a great asset, particularly in local communities, because sometimes they are not just railway stations. Certainly, I would like to see many more of them being developed into integrated transport hubs where we could have buses and active travel interventions as well, so that they connect much more into transport for the local community. Obviously, how station ownership and operation will pan out in the future will be subject to a fair amount of work. For example, some of them may end up being run by local government or local transport authorities, and we will be able to say more on that in the levelling-up White Paper.
Lord Young of Cookham (Con)
Can my noble friend confirm that the key objectives of privatisation—which could have been called the “Young-Major plan for rail”, had modesty not intervened—will be retained? These objectives are: no monopoly in the train operating industry but new entrants encouraged; the capital costs of the passenger rolling stock and freight rolling stock borne by the private sector, not the public purse; and passenger service contracts being constructed to reward efficiency, quality and passenger growth. None of those characteristics is available under full nationalisation.
Baroness Vere of Norbiton (Con)
Bring back the Young-Major plan for rail greatness is what I say. I can absolutely confirm all those things to my noble friend. We are retaining the original objectives of privatisation to make sure that passenger services are awarded following a fair competition. We had to strip out some of the complexity of those competitions to allow train operators to bid on a simpler basis, and we think we have achieved that. We will open up new opportunities for private sector involvement where we can.
As I have said, the capital cost of passenger and freight rolling stock will be borne by the private sector. There will be a certain element of a guiding mind when it comes to a strategic intervention on the rolling stock, but this will not preclude train operating companies purchasing their own rolling stock. Obviously, we are replacing the franchises with this more commercially sustainable model of a passenger service contract, which will ensure that we get the right amount of innovation into the system and passengers benefit.
Lord Faulkner of Worcester (Lab) [V]
My Lords, I remind the House of my railway interests as declared in the register. I am happy to share the optimism of the noble Baroness for the future of the railway, not least because of the involvement of both Andrew Haines and Sir Peter Hendy in Great British Railways. I have the highest confidence in both, and I believe they will work well to deliver what could be a very successful railway.
I would like to ask the Minister one specific question about the reference in section 4, on page 33 of the White Paper, to a “national brand and identity”. Does this mean that train operators will have to repaint all their rolling stock in new standard Great British Railway colours? Not even British Rail had a common identity for all its passenger trains. The Government may find some resistance to making companies abandon their established, and in many cases attractive, liveries.
May I also ask about the reference to electrification, which I asked about last Tuesday, particularly the references to Oxford, Sheffield and Swansea on page 14? An announcement is promised “shortly” on page 88. How shortly is “shortly”?
Baroness Vere of Norbiton (Con)
My Lords, shortly is shortly. I, too, am optimistic about the railways and all forms of transport because they are the great connector. The noble Lord asks about branding. Branding is important because having a coherent, consistent and clearly branded rail network gives passengers greater confidence in using it. Great British Railways will use an updated version of the classic double arrow logo. We also have an updated version of the font, which I think will be widely recognised across the system. However, variants of the national brand will be developed to reflect the English regions and Scotland and Wales, while emphasising that the railway is one network serving the whole of Great Britain. It may well be that, as the noble Lord suggests, there will be slight variants depending on which part of the country the train operates in.
Baroness Altmann (Con) [V]
My Lords, are there any plans for environmental targets for Great British Railways, such as carbon emission reductions or progress towards net zero, and incentives for them?
Baroness Vere of Norbiton (Con)
The Government are committed to decarbonising the railway as part of our wider, legally binding target of reaching net zero emissions across the whole UK economy by 2050. Our forthcoming transport decarbonisation plan will set out the scale and pace of rail decarbonisation that is necessary for us to achieve that. The rail network enhancements pipeline—the RNEP—will be updated soon, and in that we will have various schemes which will lead to decarbonisation. Indeed, we are working very closely on research to look at how we can also decarbonise the vehicles themselves; for example, by looking at hydrogen trains. The new industry structure, including Great British Railways, will ensure a more co-ordinated approach to delivering our carbon emissions commitments.
Lord Haskel (Lab) [V]
My Lords, as the White Paper states, passenger service contracts work well for local, regional and commuter services, but experience here and elsewhere has shown that these service contracts work less well on intercity routes because they allow less room for innovation. Will there be two types of passenger service contract to allow for this? Where will the line be drawn? Will it be just one size fits all?
Baroness Vere of Norbiton (Con)
My Lords, there will not be two types of passenger service contract. There will be many types because the noble Lord is right. Some may incorporate revenue risk in due course to encourage innovation and get passengers back on to the railways.
Lord Moylan (Con)
My Lords, rail fare income is closely correlated with the economic cycle. The new arrangements involve a complete transfer of fare risk from the train operating companies to the taxpayer. This means that the Chancellor of the Exchequer is going to have to be very indulgent towards Great British Railways, especially in an economic downturn, if falling fare income is not to cannibalise the investment programme. Has my noble friend reached a specific agreement with Her Majesty’s Treasury on its approach to this aspect of funding Great British Railways? If so, will it be in the public domain?
Baroness Vere of Norbiton (Con)
The five-year business plan that will be developed by Great British Railways will be in the public domain and it will set out the capital and revenue funding over that period. I agree with my noble friend that passenger demand is challenging to predict as we move out of the pandemic. Evidently there will be risks for the Government as the holder of the revenue risk. The Government have supported the railways to the tune of £8.5 billion in the last financial year. However, on a positive note for the Treasury, we expect that the reform package will deliver savings of around £1.5 billion per year after about five years. That is 15% of pre-pandemic income.