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Speaker’s Statement
Mr Speaker
I must inform the House that Yvette Cooper has written to me giving notice of her wish to resign from the Chair of the Home Affairs Committee. I therefore declare the Chair vacant.
The following arrangements will be in place for electing a new Chair of the Home Affairs Committee. Nominations should be submitted in the Lower Table Office—located in the Reference Room of the Library—or the Public Bill Office by 12 noon on Tuesday 14 December. Nomination forms are available from the Vote Office and the Table Office.
Following the House’s decision of 16 January 2020, only Members of the Labour party may be candidates in this election. If there is more than one candidate, the ballot will take place on Wednesday 15 December from 10 am to 1.30 pm in Committee Room 15. A briefing note with more details about the election will be made available to Members in the Vote Office and on the intranet.
Oral Answers to Questions
(3 years ago)
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Caroline Lucas (Brighton, Pavilion) (Green)
Christine Jardine (Edinburgh West) (LD)
Peter Grant (Glenrothes) (SNP)
The COP26 President (Alok Sharma)
COP26 was the first COP where a section of the cover decisions was devoted to loss and damage. We agreed a new Glasgow dialogue on loss and damage, which will discuss the arrangements for the funding of activities to avert, minimise and address loss and damage.
Caroline Lucas
The COP26 President will know of the extraordinary anger and sense of betrayal that was felt by the climate-vulnerable countries, in particular, when they saw the finance facility that they had proposed downgraded to just a dialogue. Will he say more about how practically he will use that dialogue to create momentum for a finance facility to be agreed at COP27? Given that from day one of that COP, the UK returns to being a negotiating party, not having the presidency, will he guarantee that the Government will support the creation of that facility in Egypt and that they will follow Scotland’s example by contributing new and additional funding specifically for loss and damage?
Alok Sharma
I note the hon. Lady’s point, but the fact that we have established a formal dialogue on loss and damage for the first time does demonstrate progress. Ultimately, this will be a party-driven process, as she knows. Parties will have to decide, based on consensus, what the outcome of the dialogue will be.
Christine Jardine
I stress again that the Group of 77 plus China—the world’s underdeveloped countries—were disappointed, crucially, with the wording on finance. They say that it is weak and have called for greater support, but there have been no specifics on how that should be met. Does the COP26 President agree that resolving that disappointment is vital both for ensuring global success against climate change and for maintaining a balance of power on the world stage?
Alok Sharma
I absolutely agree with the hon. Lady on the importance of this issue. I very much hope that we will make progress on the dialogue. I should point out that, in addition to the dialogue, we have also done what we set out to do: to operationalise the Santiago Network, so that technical assistance can be provided. Parties have also agreed that funding will be provided to support the work of the Santiago Network.
Peter Grant
As the hon. Member for Brighton, Pavilion (Caroline Lucas) mentioned, the first organisation in the world to give a definite financial commitment to a loss and damage facility were the Scottish Government, who, officially, were not even part of COP. They have committed £2 million and, as a result, other organisations—the Government of Wallonia for one—and a number of philanthropic bodies have also committed money. Does the COP26 President agree that, in holding the presidency of COP26, the United Kingdom is in a unique position to encourage others to follow Scotland’s example? Does he also agree that a significant commitment from the United Kingdom would almost certainly open the doors for substantial funding from other wealthy organisations?
Alok Sharma
Again, I make the point that it is the first time that we have agreed the need for a dialogue. During our presidency year, we will pursue that very actively.
Bob Blackman (Harrow East) (Con)
I congratulate the President of COP26 on the excellent work that he has done for this country and for the world. Will he also inform the House what discussions he has had with the Treasury about what we as the United Kingdom Government can do to help the countries that are threatened?
Alok Sharma
I will ignore that additional comment. I thank my hon. Friend the Member for Harrow East (Bob Blackman) for his very kind words. A number of things have happened in relation to the UK. The Chancellor has set out the conditions to restore the 0.7% commitment and we know that, on the latest forecast, that will be restored by 2024-25. In addition, the UK worked with other countries to ensure that the $100 billion delivery plan also set out when additional funding will be made available to support developing countries.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Whether it is progress in relation to a dedicated loss and damage funding facility, efforts to raise ambition when it comes to national climate commitments, or delivering on climate finance and adaptation pledges, implementing the Glasgow agreement will require the work of our COP presidency not only to be sustained but to be enhanced over the next 11 months. Can the President therefore confirm today that the COP26 unit will be fully funded to deliver on all the work programmes mandated in the Glasgow agreement, and that the Glasgow Financial Alliance for Net Zero will continue to receive support from the Treasury throughout the remainder of the UK presidency?
Alok Sharma
I can certainly confirm that we will be taking very seriously our work during the presidency year, and I will return to the House in due course and set out a written statement on our role during that presidency year.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The COP26 President (Alok Sharma)
In the run-up to the summit, I met civil society and youth groups on international visits. We established the COP26 civil society and youth advisory council. I attended a Youth4Climate conference in Milan, and obviously the conference of youth in Glasgow. I can confirm that, at COP itself, we had over 160 youth, indigenous peoples and broader civil society speakers who participated in presidency-themed events.
David Simmonds
Does my right hon. Friend agree with me that it is an important feature of this COP event that so many young people’s voices were able to be heard, in particular through digital methods, such as the children of West Lodge Primary School in my constituency, who told me on Monday how much they had valued their opportunity to participate directly?
Alok Sharma
My hon. Friend makes a really important point, and I want to pay tribute obviously to the children of West Lodge Primary School and also to him for all the work that he does in his constituency. We have an opportunity for all of us to play our part in tackling climate action, and we want to ensure during our presidency year that the voices of young people are integral to driving climate action.
Valerie Vaz (Walsall South) (Lab)
I also pay tribute to the President of COP26 for the incredible work that he did. Has he had any discussions with the Egyptian Government about whether civil society groups can attend the fringe meetings, including very important people such as David Attenborough and Greta Thunberg, and also first nations around the world that maybe did not have a seat at the table?
Alok Sharma
I thank the right hon. Lady for her kind words. Obviously, we had some initial discussions with Egyptian colleagues at COP26 itself, but I hope to have a conversation with them, certainly before Christmas, and to visit Egypt again in the new year to talk about how we work in our presidency year as we move to COP27.
Suzanne Webb (Stourbridge) (Con)
Mr Philip Hollobone (Kettering) (Con)
Paul Blomfield (Sheffield Central) (Lab)
The COP26 President (Alok Sharma)
The Glasgow climate pact, agreed by almost 200 countries, is an historic agreement that advances climate action. It is the result of two years of marathon work and a two-week sprint of negotiations, and I think we can say with some credibility that we have kept the goal of limiting global warming to 1.5° within reach.
Suzanne Webb
Will my right hon. Friend join me in congratulating the pupils of Gig Mill Primary School, Wollescote Primary School and Cradley Church of England Primary School on taking part in my COP26-inspired Christmas card competition? There were some magnificent results. It is all about the environment, it is very green and it is also about recycling, because one of them actually used a potato head as a print to make a reindeer Christmas card. It was very clear to me that the legacy of COP26 is very much alive and kicking in the younger generation.
Alok Sharma
I congratulate all the primary schools and the students who took part in this Christmas card competition. It is perhaps an inspiration to all of us for our Christmas cards. Undoubtedly, we need to ensure that climate action continues to be raised as an issue, and we all have a role to play.
Mr Hollobone
I congratulate the President of COP26 on his personal dedication, hard work and commitment at the Glasgow summit. Will he confirm that, as a result of the summit, for the first time ever over 90% of the world’s GDP and about 90% of global emissions are now covered by net emissions targets, and that all 197 countries have pledged to revisit and strengthen these targets by the time of COP27 next year?
Alok Sharma
My thanks to my hon. Friend for his kind words, and he is absolutely right. When we took on the COP presidency, less than 30% of the global economy was covered by a net zero target, but we are now at 90%, and yes, all countries have agreed to look again at their 2030 emission reduction targets and come back on those by the end of 2022 to ensure that they are aligned with the Paris temperature goals.
Paul Blomfield
Following that point, one of the positive outcomes of COP26 was the agreement for countries to revise their emissions targets next year. Will the President explain exactly what he will do over the next 12 months to ensure we get the breakthrough we need at COP27, not only to keep 1.5° alive, but to achieve it?
Alok Sharma
That is a very fair question, and as I said, in due course I will set out for the House in a written statement precisely what we will do in our presidency year. As the hon. Gentleman knows, a significant number of commitments were made by countries at COP26, and our intention is to ensure that they deliver on the commitments they have made.
Clive Efford (Eltham) (Lab)
No one doubts the Secretary of State’s commitment to delivering on climate change, but can he say what he intends to do over the next 12 months? The pledges that were made at COP26 must have been alarming to him, because with current pledges we are way off delivering on 1.5°, and the achievements that countries will make by 2030 will be way off target. What will he do to step up his activities as president for the next year to ensure that we get back on target to keep 1.5° alive?
Alok Sharma
As I said, I will set that out in writing. If we consider all the commitments made by countries, including the net zero commitments and long-term strategies, there are credible reports that suggest we are heading to below 2°. Of course this is the start of a decade of action, which is why we need to push forward during this year.
Philip Dunne (Ludlow) (Con)
Does my right hon. Friend believe that the current structure of Government is adequate to ensure that the UK can deliver a more ambitious nationally determined contribution at COP27?
Alok Sharma
The make-up and structure of the Government are obviously a matter for the Prime Minister—I know my right hon. Friend will have raised that issue at the Liaison Committee—but our current NDC is aligned to net zero.
Edward Miliband (Doncaster North) (Lab)
I want to commend the COP President, or should I say No Drama Sharma, for his efforts in Glasgow. He is right that we have to spend the next 12 months maximising the pressure on the big emitters, and we can make a difference with the UK-Australia trade deal. Australia’s 2030 target is consistent with 4° of warming. Will he tell the Secretary of State for International Trade to rewrite that trade deal, and not to water down commitments, which is the current plan, but to make it conditional on Australia, as well as the UK, having 2030 targets that are consistent with 1.5°?
Alok Sharma
I congratulate the right hon. Gentleman on his new role. My only disappointment is that the phrase “shadow COP President” does not appear in his title—that is where he could take some lessons from the deputy leader of the Labour party about how to expand his number of portfolios. On the point about Australia, I confirm that the trade deal will include a substantive chapter on climate change, which reaffirms both parties’ commitments to upholding our obligations under the Paris agreement, including limiting global warming to 1.5°.
Edward Miliband
I know I am shadowing the Department that the right hon. Gentleman would quite like to run, so perhaps that announcement will be forthcoming in the future. I am mildly encouraged by what he says on Australia.
Let me take two other issues where he can show leadership: the Cumbria coalmine, and the Cambo oilfield, which are the equivalent of 18 coal-fired power stations running for a year. He knows that we need to get others to phase out coal, and that we need to phase out fossil fuels. Surely the right way to send a proper signal to the rest of the world ahead of COP27, is for the whole Government to start practising what he is effectively preaching, and put a stop to Cambo and Cumbria.
Alok Sharma
We have previously had discussions at the Dispatch Box on both Cambo and Cumbria, and the right hon. Gentleman will know that they are being looked at by independent regulators and that pronouncements will be coming forward. We have significantly reduced the amount of coal in our electricity mix. Indeed, there will be no more coal in the UK electricity mix from 2024.
Deidre Brock (Edinburgh North and Leith) (SNP)
I commend the COP26 President and his team for all their hard work at COP26, but one issue missing from the Prime Minister’s ambition for the conference was fossil fuels generally. It is clear that we need action to tackle the use of fossil fuels globally, but in a way that supports a just transition for workers. Does the COP26 President agree that not having a concrete commitment from COP for a global just transition from fossil fuels is a disappointment, and that following the Scottish Government’s example in delivering a just transition and opposing further oil exploration would set a strong example for the next COP?
Alok Sharma
We do support a just transition; in fact, the $8.5 billion deal agreed with South Africa will enable decarbonisation and a just transition in that country. We also now have 34 countries and five public finance institutions supporting a UK-led initiative to end international public support for the unabated fossil fuel energy sector by the end of 2022.
Jacob Young (Redcar) (Con)
The COP26 President (Alok Sharma)
At COP26, leaders of countries representing over 70% of global GDP committed to work together to make clean technologies and sustainable solutions the most affordable, accessible and attractive option in each emitting sector before the end of this decade.
Jacob Young
Teesside is quickly becoming the epicentre of hydrogen technology in the UK; with recent announcements on blue and green hydrogen production, we are confident that Teesside will be able to deliver more than half of the Government’s 2030 hydrogen ambitions. Around 85% of all homes are on the gas network, and domestic heating accounts for over 30% of the UK’s carbon dioxide emissions. It is clear to me that we will not make net zero without switching our gas network to 100% hydrogen. Will the Minister recognise hydrogen as a fuel of the future, and will he join me in my campaign for the UK’s first hydrogen village in Redcar?
Alok Sharma
I agree with my hon. Friend that hydrogen is a fuel of the future. As he will know, the idea of a hydrogen village trial was proposed in the Prime Minister’s 10-point plan, and gas network companies are working with local partners to develop proposals for the trial. I suggest that he speaks to my right hon. Friend the Business Secretary to make the case for Redcar.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The COP26 President (Alok Sharma)
Indigenous peoples’ voices were represented throughout COP26, and of course the UK Government funded the indigenous peoples’ pavilion in the blue zone. We will continue to amplify indigenous peoples’ voices during our presidency year.
Martin Docherty-Hughes
I am grateful to the COP26 President for his response. The territories of the world’s 370 million indigenous people cover 24% of the world’s land and contain 80% of the world’s biodiversity, including sites of precious natural resources. It is they who protect forests vulnerable to the encroachment of modernity, which has caused climate change. Given that indigenous communities are successful in maintaining control of their territories and traditions against the onslaught of man-made climate change, does the COP26 President agree that it is time for them to be treated as equal partners in decision-making processes, including at the United Nations?
Alok Sharma
As I said, we will absolutely amplify the voices of indigenous peoples, but as the hon. Member will also know, the UK worked with others to mobilise a pledge of at least $1.7 billion over the next five years to ensure that there is support for indigenous peoples, particularly when it comes to forest tenure rights.
Anna McMorrin (Cardiff North) (Lab)
Clive Lewis (Norwich South) (Lab)
The COP26 President (Alok Sharma)
We can say with credibility that at COP26 we kept 1.5° alive, but as I acknowledged in Glasgow and indeed here, its pulse is weak. That is why we now need to turn commitments from countries into action.
Anna McMorrin
COP26 agreed that the Paris climate agreement must now be implemented to keep global warming below 1.5°, but it has been revealed that the UK has emitted around 50 million tonnes of carbon in the past five years from collapsing peatlands alone. I asked the Minister this last time, and I ask him again: where is the climate leadership in this Government’s allowing two thirds of UK peatlands to be burned while the world is on fire?
Alok Sharma
As the hon. Lady will know, we have a peat strategy, which I am sure my colleagues in the Department for Environment, Food and Rural Affairs would be happy to share with her. More widely, as a country we have decarbonised our economy faster in recent years than any other G7 or G20 nation.
Clive Lewis
We know the oil of Cambo and the coal of Cumbria have to stay in the ground if we are to keep temperature rises at below 2.4°C. I say 2.4°C because that is the new reality after this year’s COP26. Will the COP President commit to stopping Cambo and the new coalmine in Cumbria, and end the climate hypocrisy that so undermined his presidency at COP26?
Alok Sharma
I responded to the right hon. Member for Doncaster North (Edward Miliband) earlier on the issue of Cambo and Cumbria. I would just say to the hon. Gentleman, more generally, that I recognise we need to work very hard during our presidency year to ensure that commitments by all countries are turned into action. That is what we will be doing.
Andy Carter (Warrington South) (Con)
The COP26 President (Alok Sharma)
At COP26, we won historic commitments from countries and businesses to act on coal, cars, cash and trees. Countries have also committed to revisit and strengthen by the end of 2022 their 2030 emission reduction commitments to align with the Paris temperature goals. After six years, we have finalised the outstanding rules governing the Paris agreement. Of course, as I have said, we need to ensure that commitments are turned into action.
Andy Carter
I congratulate my right hon. Friend on his incredible work at the COP26 summit in Glasgow. Will he continue to work with schools and youth groups throughout the rest of his presidency? Can I invite him to Warrington to meet young people in my constituency?
Alok Sharma
I thank my hon. Friend for his kind words. I commend the work of young people in his constituency and I will ensure that my diary works so I can visit them.
Jessica Morden (Newport East) (Lab)
Alok Sharma
The hon. Lady raises an important point. One issue is about the quantum of money; the other is access to finance. That is why we are now launching five pilot projects in developing countries around the world to ensure that access to finance is much better.
Dr James Davies (Vale of Clwyd) (Con)
Alok Sharma
My hon. Friend is a great champion for his community on this particular issue. He will know that the Government remain open to considering well-developed proposals for harnessing tidal range energy in the bays and estuaries around our coastlines. Obviously, I recommend that he also speaks to the Department for Business, Energy and Industrial Strategy.
Ian Byrne (Liverpool, West Derby) (Lab)
Alok Sharma
The hon. Gentleman raises a very important point, but air pollution has reduced significantly since 2010. Our clean air strategy proposes a comprehensive suite of actions required across all parts of Government to improve air quality.
Selaine Saxby (North Devon) (Con)
Alok Sharma
I commend my hon. Friend and her constituents for the success of the North Devon climate summit. Every Government need to play their part and I am pleased that the UK Government’s “Together for our Planet” campaign provides practical advice on how everyone can go one step greener.
Wera Hobhouse (Bath) (LD)
Synthetic aircraft fuels are still in their infancy. Domestically, the Government have a tool, the renewable transport fuel obligation, by which they can mandate the mixing of synthetic fuels with conventional aircraft fuel, thereby starting the process of making synthetic fuels viable. Is the right hon. Gentleman aware of any similar mechanisms in other countries, so we can start an international agreement on mixing synthetic fuels with aircraft fuels and driving the route to net zero?
Alok Sharma
As the hon. Lady knows, the Government are putting funding behind sustainable aviation fuels. I would be very happy to arrange a meeting for her with the Secretary of State for Transport or with a Transport Minister.
Ruth Edwards (Rushcliffe) (Con)
I particularly welcome the COP outcome relating to deforestation: 130 countries, representing 90% of the world’s forests, pledged to end deforestation by 2030. How will that be monitored? What steps will be taken if countries do not keep their word?
Alok Sharma
My hon. Friend raises a very important point. The 90% of forests that are covered by the pledge are also being backed by £14 billion of public and private funding, so there will be a mechanism for checks and balances. In addition, we agreed the transparency framework at COP26, so we will be able to see whether countries are meeting the commitments that they have made.
Mr Speaker
Before we come to Prime Minister’s questions, I would like to point out that a British Sign Language interpretation of proceedings is available to watch on parliamentlive.tv.
Bim Afolami (Hitchin and Harpenden) (Con)
The Prime Minister (Boris Johnson)
Today, I am wearing a purple tie in recognition of the International Day of People with Disabilities this coming Friday. In July, we published the UK’s first national disability strategy to help to create a society that works for everybody.
I know that the thoughts of the whole House will be with those who are continuing to face disruption caused by Storm Arwen. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy will update the House on the continuing response to Storm Arwen after Prime Minister’s questions.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Bim Afolami
The Prime Minister and I have a shared commitment to protecting our natural environment and improving our biodiversity across the country. Indeed, that is why I am campaigning to extend the Chilterns area of outstanding natural beauty towards the south-west of Hitchin. Will my right hon. Friend set out how he plans to strengthen the protections for our countryside, while also ensuring that housing developments are both green and sustainable for the long term?
The Prime Minister
Yes, indeed. I can tell my hon. Friend that Natural England is considering an extension of the Chilterns area of outstanding natural beauty, and I am sure that it will listen to his passionate appeal very carefully.
Keir Starmer (Holborn and St Pancras) (Lab)
May I join the Prime Minister in his words on disability and the victims of extreme weather? May I also mark World AIDS Day? Extraordinary advances mean that people living with HIV on effective treatment can now enjoy normal life expectancy and are no longer at risk of passing on the virus. It is within our hands to end new transmissions in the UK this decade. We must do so.
As millions of people were locked down last year, was a Christmas party thrown in Downing Street for dozens of people on 18 December?
The Prime Minister
What I can tell the right hon. and learned Gentleman is that all guidance was followed completely in No. 10. May I recommend that he does the same with his own Christmas party, which is advertised for 15 December and to which, unaccountably, he has failed to invite the deputy Leader of the Opposition?
Keir Starmer
Nice try, but that won’t work. The defence seems to be that no rules were broken. Well, I have the rules that were in place at the time of the party. They are very clear that
“you must not have a work Christmas lunch or party”.
Does the Prime Minister really expect the country to believe that while people were banned from seeing their loved ones at Christmas last year, it was fine for him and his friends to throw a boozy party in Downing Street?
The Prime Minister
I have said what I have said about No. 10 and the events of 12 months ago, but since the right hon. and learned Gentleman asks about what we are asking the country to do this year, which I think is a more relevant consideration, let me say that the important thing to do is not only to follow the guidance that we have set out but, when it comes to dealing with the omicron variant, to make sure that—as we have said, Mr Speaker—you wear a mask on public transport and in shops, and that you self-isolate if you come into contact with somebody who has omicron. Above all, what we are doing is strengthening our measures at the borders. But in particular, Mr Speaker—and I think that this is very valuable for everybody to hear—get your booster!
I know that the right hon. and learned Gentleman is eligible for his booster. I am not going to ask him, Mr Speaker, as I am forbidden to ask him questions, but I hope very much that he has had it.
Mr Speaker
I can tell the Prime Minister that I have had mine.
Keir Starmer
The Prime Minister says that we should concentrate on what he is asking the country to do. We are asking the country to follow the rules. The Prime Minister does not deny that there was a Downing Street Christmas party last year. He says that no rules were broken. Both those things cannot be true. He is taking the British public for fools.
As for following the rules, Prime Minister, it might be good just to look behind you when it comes to the question of masks. As ever, there is one rule for them and another rule for everybody else.
At the last election, the Prime Minister promised to build 40 new hospitals. It is on page 10 of his manifesto. With waiting lists so high, that is a very important commitment. The Cabinet Office and the Treasury have checked on progress, and it is reported that they have a reached a damning conclusion. I know that the Chancellor will have seen that. They have concluded that the project needs a “red flag” because it is unachievable. Prime Minister, is that true?
The Prime Minister
No. The right hon. and learned Gentleman plays politics and asks frivolous questions, but we are getting on with delivering on the people’s priorities. We are making record investments in the NHS, on top of the £34 billion with which we began, and then the £97 billion that we put in to fight covid. We are helping to build another 40 new hospitals with an injection of £36 billion of investment, which that party voted against.
Keir Starmer
Well, this is strange, Mr Speaker, because the Government have not been denying the reports about the red flag and they have not done so since, but now the Prime Minister is. There is obviously some confusion on those Benches over whether the Cabinet Office and the Treasury think he is on course to break yet another promise, this time on the building of new hospitals. He can clear that up this afternoon. If he is so confident in his answer, why does he not publish the progress report in full and let us all see it?
The Prime Minister
What we are doing is not only building 40 new hospitals—and it is incredible that we have been able to keep going throughout the pandemic—[Interruption.] Yes, it is. We are not only building those hospitals, but making record investments in our NHS. We have more doctors and more nurses working in our NHS than at any time in the history of that magnificent organisation. Rather than running down what they are trying to do and casting doubt on their efforts, the right hon. and learned Gentleman should get behind them and, in particular, he should support our booster campaign.
Keir Starmer
Well, there we have it. The Prime Minister says, “I deny that my hospital building programme has been flagged red as unachievable, but I do not have the confidence to publish the report.”
The more we look at this promise, the murkier it gets. I have a document here, which was sent to the NHS by the Department of Health and Social Care. It is called “New hospital programme communications playbook”—I kid you not—and it offers
“advice to make it easier to talk about the programme”.
You might think that everyone knows what a new hospital is. I certainly thought I knew what a new hospital was before I read this guide, but it instructs everyone to describe refurbishments and alterations in existing hospitals as new hospitals. We can all agree that refurbishments are a very good thing, but they are not new hospitals. So how many of the 40 are fix-up jobs on existing hospitals and how many are actually the new hospitals that the Prime Minister promised?
The Prime Minister
You obviously do not always go around building on greenfield sites. You rebuild hospitals, and that is what we have said for the last two and a half years. It is the biggest programme of hospital building this country has ever undertaken. It has been made possible by this people’s Government, and it is in addition to what we are doing with the community diagnostics hubs and in addition to what we are doing in investing in our NHS. I have said it once and I will say it again: the Opposition had the opportunity to vote for that £36 billion but they turned it down. We are getting on with the people’s priorities; they are playing politics.
Keir Starmer
It is no wonder that so many Tory donors paid so much for that wallpaper last year—the Prime Minister probably told them he was building a new flat. It is the same old story from this Prime Minister, week in, week out: defending the indefensible, and broken promises. His mates were found to be corrupt; he tried to get them off the hook. Downing Street throws parties during lockdown; he says it is not a problem. He promised that there would be no tax rises, then he put up tax. He promised that there would be a rail revolution in the north, then he cancelled the trains. He promised that no one would have to sell their home for care, then along came his working-class dementia tax. He promised 40 new hospitals, but even if we count the paint jobs, his own watchdog says he cannot deliver it. Is it not the truth that any promises from this Prime Minister are not worth the manifesto paper they are written on?
The Prime Minister
The right hon. and learned Gentleman drivels on irrelevantly about wallpaper and parties, playing politics. By the way, I am told that when the Deputy Leader of the Opposition and shadow Secretary of State for the future of work was told that she was not invited, she denounced it as idiotic, childish and pathetic. They are getting on with factional infighting; we are delivering for the people of this country. Today, cutting tax for the lowest paid people in this country. As a result of our universal credit changes, 1.9 million families are getting £1,000 more in their pay packets this year. The biggest programme of rail infrastructure this century, with three new high-speed lines. And we are fixing social care. They have no plan whatever, and don’t forget that their resort to absolutely every problem is either to take this country back into lockdown or to open up to uncontrolled immigration. That is their approach. We are delivering on the people’s priorities, and we have more people in work now, as a result of the balanced and proportionate approach that we are taking, than we had before the pandemic began. If we had listened to Captain Hindsight, we would all still be in lockdown. That is the truth.
Mr Speaker
Order. I want to hear from Mr Rosindell even if you don’t. Come on Andrew!
Andrew Rosindell (Romford) (Con)
The Prime Minister
We will certainly review the human rights system, but in the meantime there is something we can all do next Tuesday and Wednesday, because our Nationality and Borders Bill is coming back to the House after long gestation. The Bill gives us the power to make the distinction at last between illegal and legal migrants to this country, it gives Border Force the power to turn people back at sea, and it gives us the power to send people overseas for screening, rather than doing it in this country. I am not asking the Opposition but telling them: it would be a great thing if they backed our Nationality and Borders Bill and undermined the criminals.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I associate myself with the Prime Minister’s remarks on disability, and of course our thoughts are very much with all those who are recovering from Storm Arwen. Like the Leader of the Opposition, of course we commemorate World AIDS Day.
Mr Speaker, I am sure your thoughts and the thoughts of the House are with the family and friends of Siobhan Cattigan, the Scotland rugby player who unfortunately died over the weekend at the age of 26, having won 19 caps.
It is deeply regrettable that, once again, we are forced to spend so much time in this House discussing the Prime Minister’s misconduct, but when the person in charge so blatantly breaks the rules, it needs to be talked about. Last Christmas the Prime Minister hosted a packed party in Downing Street, an event that broke the lockdown rules that everyone else was expected to follow. He might deny it, but I spoke to the Daily Mirror this morning and it confirmed what happened. The newspaper has legal advice on the potential illegality. At a time when public health messaging is so vital, how are people possibly expected to trust the Prime Minister when he thinks it is one rule for him and another rule for everybody else?
The Prime Minister
The SNP should concentrate its line of attack more closely. I have said before that the right hon. Gentleman is talking total nonsense. Frankly, he would have been better off saying something about the victims of Storm Arwen in Scotland.
The Prime Minister
If I did not hear it, he was drowned out by his supporters. We need to work together—the Government of the UK working with the Scottish authorities—to help those people get their power back, and that is what we are doing.
Ian Blackford
That is a disgraceful answer. The Prime Minister did not even listen, because I mentioned Storm Arwen.
The real reason why all this matters is that we find ourselves at another very difficult moment in this pandemic. This is a time when leadership matters, when truth matters and when trust matters. Only this morning, leaked SAGE advice confirmed that the UK Government’s current international travel restrictions will identify significantly fewer cases. It is exactly the same advice that the Prime Minister received from the First Ministers of Scotland and Wales on Monday, and he has ignored that advice.
Since then other countries, like Ireland and the US, have moved rapidly on international travel to protect their people. Will the Prime Minister finally convene a four-nation Cobra meeting to tighten travel restrictions, or will he continue to ignore the Scottish Government, the Welsh Government and his own SAGE advisers and imperil the health of the public of these islands?
The Prime Minister
Of course we want to work closely with the right hon. Gentleman. There will be abundant opportunities today and in the weeks ahead to concert our activity, but he is simply wrong in what he says about the steps the Government have taken to prevent the seeding of this variant from abroad. This country was actually the first to respond to the 10 countries that are most likely to seed the new omicron variant in this country. We put them on the red list, so people not only have pre-departure tests but they are quarantined. He is not right in what he says, and every other country in the world—[Interruption.] I do not mind if the right hon. Gentleman shouts. I tell him very calmly and quietly that 100% of passengers arriving from every other country in the world must take a PCR test, and they cannot get out of quarantine unless they test negative. Those balanced and proportionate measures are designed to protect the British people from the omicron variant, and that is the right approach to take.
John Penrose (Weston-super-Mare) (Con)
The Prime Minister
I thank my hon. Friend for that. He is completely right about the importance of childcare and the transformative influence it can have, which is why we have spent £3.5 billion in each of the past three years on free childcare entitlements, particularly for the most disadvantaged. I am always happy to meet him and to discuss his ideas further.
Ed Davey (Kingston and Surbiton) (LD)
Farmers across our country are crucial to our nation’s prosperity, as has been shown, once again through the pandemic, but many are now on the brink. Farmers across the country, in villages such as Hodnet, Baschurch and Woodseaves and countless others, are about to see their payments cut by at least 5%, starting this very month. The Prime Minister promised a new support system, rewarding more sustainable farming, but in the meantime he seems prepared to see many British farms go bankrupt. There is an easy solution: stop cutting the current system’s essential payments until the new scheme is fully rolled out. Will the Prime Minister do that, and help our struggling farmers before it is too late?
The Prime Minister
British food and farming does an absolutely outstanding job, and it is growing the whole time. Last night, I met representatives of the UK food and farming industry, which we support and continue to support with the same level of payments. But what we are also doing is opening up new opportunities for them around the world. I can tell the right hon. Gentleman that in every single embassy there is now a dedicated expert on supporting UK food and farming exports to the rest of the world, which support 4 million jobs in this country and earn this country £21 billion of revenue.
Damian Collins (Folkestone and Hythe) (Con)
The Prime Minister
I thank my hon. Friend for that. He is absolutely right to say that too many of these gangs are using social media, which is why the online harms Bill is so important. It will indeed be of assistance to us in taking down that kind of material.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
The Prime Minister
I am very grateful to the hon. Lady, who raises an extremely important issue about a phenomenon that I know has caused huge distress to many, many women in this country. We published the Cumberlege report, and if there is anything more we can do, I am certainly willing to look at it. I am grateful to the hon. Lady for raising this.
Brendan Clarke-Smith (Bassetlaw) (Con)
The Prime Minister
Step No. 1 is to vote out those dozy Labour councillors. I thank my hon. Friend for his excellent representation of Bassetlaw and can tell him that the second round of bidding for the levelling-up fund will open in spring next year.
Colleen Fletcher (Coventry North East) (Lab)
The Prime Minister
I thank the police officers in the west midlands, and I thank the hon. Lady for drawing attention to what we are doing to increase the number of police officers—[Interruption.] No, we are on track: of the 20,000 that I pledged on the steps of Downing Street two and a half years ago, we have already recruited another 11,000. I am proud to say that our police officer workforce is more representative of the whole of this country, with more women and more people from ethnic minorities, than ever before.
Mr David Jones (Clwyd West) (Con)
The Prime Minister
Frankly, I cannot really improve on the verdict of my friend Fabian Picardo, the Chief Minister of Gibraltar: Gibraltar is British, British, British and will remain so. By the way, I see no future role for the European Court of Justice.
Christine Jardine (Edinburgh West) (LD)
The Prime Minister
I thank the hon. Lady for raising that issue; it is incredibly important, which is why we are now moving to all-out electric vehicles across the whole of the country, faster than any other European country. The World Health Organisation has praised our clean air strategy as an example for the rest of the world to follow. We will set out our evidence-based approach and the targets we are setting, but I would of course be happy to make sure that the hon. Lady meets the relevant Minister to set out her case.
Mr David Davis (Haltemprice and Howden) (Con)
The Prime Minister
My right hon. Friend is spot on. The roll-out of Paxlovid in the NHS will of course depend on its approval by the Medicines and Healthcare products Regulatory Agency, but the Government have, as a precaution, already invested in hundreds of thousands of courses of the drug.
Jessica Morden (Newport East) (Lab)
The Prime Minister
I am afraid that she has completely failed to look at what Sir Peter Hendy set out in his Union connectivity review. It is a fantastic agenda for change and improvement, particularly in Wales and particularly on the north Welsh corridor where the railway links deserve to be improved and will be improved under this Government.
Tom Randall (Gedling) (Con)
The Prime Minister
Yes, of course, we are very happy to help Gedling and other Labour-run councils to get their act together where necessary and to put in those bids. Just to remind my hon. Friend, more levelling-up fund bids come due in the spring of next year, and I wish Gedling well in its future bids.
Imran Hussain (Bradford East) (Lab)
The Prime Minister
The hon. Gentleman should look at the Conservative Front Bench today, and he should withdraw what he has just said—he should withdraw it. What he said was absolutely shameful, and, as he knows full well, the Nationality and Borders Bill does nothing of the kind. It helps us to fight the evil gangs who are predating on people’s willingness to cross the channel in unseaworthy boats and I would have thought that a sensible Labour party would support it.
Gareth Davies (Grantham and Stamford) (Con)
The Prime Minister
I thank my hon. Friend for all the support that he gives to Grantham and Stamford. I can tell him that Small Business Saturday is receiving huge support from the Government. We had a kind of festival last night to celebrate it in Downing Street. I encourage everybody to get out this Saturday—safely with their mask on, Mr Speaker, when they are in a shop, but that should be no inhibition on people buying in their shops up and down this country.
Ian Byrne (Liverpool, West Derby) (Lab)
The Prime Minister
I thank the hon. Gentleman for the powerful point that he has just made. Even though 32 years have passed since that devastating tragedy, I know that the wounds remain very raw in Liverpool. The Government are committed, as he knows, to continuing engagement with the bereaved families, and to ensuring that the lessons from that tragedy continue to be properly learned and that the victims of Hillsborough are never forgotten. I am happy to ensure that the hon. Gentleman meets the relevant Minister to take forward an agenda that I think is shared by people up and down the country.
Mr Speaker
We now come to the statements. Will those who wish to leave please do so quickly and quietly?
Off-road Vehicles in the Gwyddon Forestry
Chris Evans (Islwyn) (Lab/Co-op)
I want to bring to the attention of the House the issue of illegal off-road biking, which is blighting valleys communities. The petition from the residents of Abercan in my constituency of Islwyn received more than 100 signatures.
The petition states:
The petition of residents of the constituency of Islwyn,
Declares that illegal off-road vehicles have caused and continue to cause irreparable damage to the environment of the Gwyddon Forestry in Abercan; further that the Gwyddon Forestry has, until recent years, been a safe haven for wildlife to flourish and for cyclists, pedestrians and horse riders to enjoy the rights of way and footpaths afforded to them, but that the vehicles are now destroying the natural habitats of wildlife; further that residents have been threatened when confronting illegal vehicle-users and have concerns for their own safety when reporting these issues to the police; and further that the off-road vehicles are drive and ridden recklessly by uninsured and unlicensed individuals, making it inevitable that accidents will take place.
The petitioners therefore request that the House of Commons urge the Government to engage with South Wales and Gwent Police to enforce the laws currently in place to prevent illegal activity and to encourage stronger actions against illegal off-road riders and drivers.
And the petitioners remain, etc.
[P002699]
Walsall Arboretum
Valerie Vaz (Walsall South) (Lab)
The petition is from the residents of Walsall and the United Kingdom. There were more than 2,000 signatures to the online petition in similar terms. The petition states:
The petition of residents of the United Kingdom,
Declares that the Black Country Plan will build 5000 homes on the Walsall Green Belt; further that 592 of these homes will be built alongside the Walsall Arboretum, the only area of the park with open field and animal grazing views; further that the development will destroy the Green Belt, wildlife corridors and increase flooding; further that protected species of badgers and bats’ habitats will be destroyed; and further that the red deer, barn owl, tawny owl, buzzards and parakeets will be lost to the area as they try to navigate around noise and light pollution.
The petitioners therefore request that the House of Commons urge the Government to take into account the concerns of the petitioners and cancel plans to build houses on the Walsall Green Belt.
And the petitioners remain, etc.
[P002700]
Mr Richard Holden (North West Durham) (Con)
On a point of order, Mr Deputy Speaker. I have given notice to the hon. Member for Easington (Grahame Morris) ahead of this point of order. What I understood yesterday in my point of order was in fact incorrect. I am happy to set the record straight now.
Mr Deputy Speaker (Mr Nigel Evans)
Thank you, Mr Holden. I am grateful that that is now on the record.
Storm Arwen
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
With permission, Mr Speaker, I would like to make a statement on the electricity disruptions as a result of Storm Arwen and how we are working to ensure that power is restored to people’s homes.
Storm Arwen brought severe weather, including high winds of up to 100 mph, rain, snow and ice, causing the most severe disruption since 2005. Many people across the country, but particularly in northern England and Scotland, have been without power for a number of days. Three people have tragically lost their lives in incidents related to the storm. My thoughts—and, I am sure, the thoughts of the whole House—are with those people and their loved ones.
I want to reassure people who are still without power—who are exhausted, worried and angry—that we are all working incredibly hard to ensure that normal conditions return. We have incredibly dedicated teams of engineers, who have been working around the clock to restore the network. The scale of the restoration effort that engineers are facing is enormous. The weekend saw exceptionally strong winds of almost 100 mph, which brought large trees and debris down on to power lines. For example, central Scotland has only seen wind speeds like this twice in the last 25 years. Of course, to add to the complex situation, much of the damage is in remote and hard-to-reach places.
I am glad to say that more than 95% of those affected by the storm—over 935,000 customers—have had their power supply restored so far; I thank the engineers for their hard work and perseverance. However, as of 8 o’clock this morning, there were still 30,000 customers without power. The specific areas most severely affected are: Wear valley surrounding Eastgate and north Northumberland; the north Peak District and the South Lakes areas; and Aberdeenshire and Perthshire in Scotland.
Today, the Minister of State, Department for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), is on the ground in Berwick to see at first hand the impact from storm disruption. Yesterday, I spoke with the chief executive officers of Northern Powergrid, Electricity North West, and Scottish and Southern Electricity Networks to seek assurance that restoration is happening as fast as is humanly possible. I am satisfied that these operators are sharing their resources through mutual aid agreements, and putting engineers in the worst affected areas.
I am also grateful to emergency responders, who have been working hard to keep people as comfortable as possible by providing torches, blankets and other necessities, and sorting out alternative accommodation where necessary. Officials in my Department are monitoring the situation closely and are in constant contact with network operators to ensure that customers can be reconnected as quickly as possible.
People who are still experiencing issues or who need further support should contact their electricity network operator by dialling 105 from their landline or mobile phone. This will automatically route them to the right operator, based on their physical location. People are also eligible for compensation on which they can find details on the Ofgem website.
For those who continue to be without power, I know their primary question will be “When will power be restored?” I have been assured that the overwhelming majority of those still without power today will have it restored in the next day or two. I have asked operators to provide named contacts for MPs and I will be sharing those with colleagues.
This has been an extremely difficult week for many of our constituents, and I thank them for their fortitude in the face of these extreme weather conditions. When the power is back up and back to normal, we in BEIS will of course be looking at the lessons that we can learn from Storm Arwen in order to build an even more resilient power system in future.
Edward Miliband (Doncaster North) (Lab)
I thank the Secretary of State for his statement. Let me first join him in sending my condolences to the victims who have tragically died during Storm Arwen and to their families. I express my sympathy to all those who have lost power and are suffering during this crisis. I know from my own constituency, where we had terrible flooding in 2019, the impacts of extreme weather and the traumatic effects it has on people and communities. I also join him in paying tribute to the many engineers, volunteers and emergency service workers who have worked tirelessly to step up and help during this crisis.
We have heard heartbreaking stories of outages leaving residents without power, water and light. There are also many reports that the Secretary of State will have heard of residents being unable to get proper information about what is happening and waiting for hours to get through on phone lines. On behalf of the many who have suffered, I want to ask him a few questions. Does he believe that there is enough support for the most vulnerable on the ground while the power outages continue, including the use of emergency generators, and has he given thought to calling in the Army if necessary to help with that process? He said that power would be restored “in the next day or two” for the overwhelming majority. Can he say how many people he estimates will be left without power and how long it will take to restore power for them?
After terrible storms in 2013—the stormiest winter in 40 years that saw hundreds of thousands lose their power—it was said that lessons would be learned, and I want to probe the Secretary of State a little further on three areas in that regard. First, on communications and information, the Science and Technology Committee recommended that the single national emergency number was put in place. The purpose of that number was that people would not just know who to call but could get information promptly. On the calling of 105, which he mentioned, there are multiple reports of it causing enormous frustration to people who are not getting the information. What is his assessment of whether people have been able to get the information, and if not, why not?
Secondly—the Secretary of State drew attention to this—Ofgem recommended in the wake of those storms that district network operators should share resources and personnel in the event of such a crisis. He said that that has happened, but is he satisfied that it has happened right across the DNO network, and at the scale that is required? Can he give us some further information on that?
Thirdly, after 2015 there was a clear sense of the vulnerabilities of the overhead power network, and agreement that the networks would survey the vulnerabilities that they faced and act. Is the Secretary of State satisfied, at this stage, that that has happened, because the continued vulnerability of power lines seems all too apparent?
Faced with the climate crisis, extreme weather events will sadly become all the more common in future. We cannot be this vulnerable in future. There is real concern that some lessons have not been learned, and on this occasion we must face up to those lessons and learn them.
Kwasi Kwarteng
On the situation with regard to the climate change emergency, the right hon. Gentleman and I have very similar views. Clearly Storm Arwen was an event the likes of which we have not seen for, certainly, 16 years, since the records of the DNOs started. We have to be prepared for similarly extreme difficult weather conditions in future and make sure that our system is resilient in that eventuality.
Turning to the right hon. Gentleman’s specific questions, the 105 line is the one number that people are being asked to call; it has been centralised. He is right to say that there was initial pressure. My understanding is that over the weekend, it took people up to two hours to get through, which is clearly unacceptable, but the storm hit and the companies did not have the communication networks, the call centres or the people there to deal with the situation. When I spoke to the CEOs of the companies yesterday, they said that the waiting time has been reduced to 10 minutes to a quarter of an hour. That is what I was told. If people are finding difficulties, they should definitely get in touch with their MPs, Government and also the distributors.
On the right hon. Gentleman’s second point, the North East South West Area Consortium is a very effective means by which the generating companies can share and deploy engineers across different networks. That is very effective, I am told by the CEOs of the companies, but I will have more calls today with local resilience leaders to ensure that what the generating companies are saying is matched by what people are experiencing on the ground, because, as he well knows, there can be a mismatch between the two.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
May I echo the words of my right hon. Friend in thanking all those in our emergency services and the local authority workers who went out over the weekend and have been doing so much to support our communities across the United Kingdom that have been affected? I also thank the people in local businesses who have opened their doors to look after those people who are more vulnerable and need support, such as the Fife Arms in Braemar, where temperatures dropped below zero over the weekend and people lost power and water. Lumphanan, Crathie and Corgarff in my constituency remain without power and do not even have access to a temporary generator. Can he expand on his discussions with Scottish and Southern Electricity Networks? What discussions has he had with the Scottish Government to see what the two Governments in this country might be able to do to speed up the response and support those people who are going to their fifth day without any power, heating or electricity in general?
Kwasi Kwarteng
My hon. Friend will accept that we are in an extreme situation. He will also know that I have spoken to Mr Alistair Phillips-Davies, who is the head of SSE. He and I and colleagues in the Scottish Government are apprised of the situation. Generators are being distributed that can take up the slack when important power infrastructure is down, but it is an ongoing situation and I would be happy to engage with my hon. Friend in the next few hours.
Dave Doogan (Angus) (SNP)
I thank the Minister for advance sight of his statement. This storm was of incredible strength when it hit us on Friday night, with the north-eastern parts of Scotland and England being especially in the full face of the gale. SSE’s storm models predicted between 60 and 100 high-voltage faults. In fact, it has sustained more than 500 high-voltage faults, with more than 1,000 instances of damage to its network. Sustained winds with gusts in excess of 90 mph were, unusually, from the north-east, affecting trees that do not normally have to yield to those winds. It has resulted in colossal tree damage to the network.
I wish to pay tribute to the fortitude and resolve of the many people facing severe hardship on day five without power, some of whom will not get it back today or tomorrow. It is a tremendous disruption to how we live today, and they are to be in our thoughts at this very challenging time for them. Indeed, as of 9 pm last night, 9,500 customers remained cut off from their supply, including 5,700 in Aberdeen and Aberdeenshire, 1,500 in Moray, 1,400 in my Angus constituency and 570 in Perthshire. This enduring lack of power would test anyone’s resolve, yet it is telling that people remain mindful of the extraordinary efforts of the engineers and support staff of SSE and its industry partners to restore supplies, and power has been restored to more than 118,000 customers. The UK Government have, I understand, said that they are
“on standby to provide further assistance to the Scottish Government”,
but like the Deputy First Minister in Scotland, I am a little sceptical as to what that is. I would be grateful if the Minister could elaborate on what that assistance would be. If it is financial assistance, is it new money or recycled money?
I was in touch with SSE again this morning, and it has assured me that it has engineers from across its network working in the north-east to repair supplies and also engineers from other networks sharing distribution network operator resources. That enormous recovery effort is hampered by the prolonged scale of the damage, which is compounded by the locations of the damage and the types of equipment that have been damaged. I place on record my thanks to the engineers working in all weathers to restore power supplies to Angus, to the council and to other members of the local resilience partnership who have done so much to help to restore supplies and in humanitarian welfare provision.
Kwasi Kwarteng
I welcome the hon. Gentleman’s remarks and pay tribute, as he does, not only to the fortitude of many of his constituents and other people in Scotland, but to the tireless efforts of the engineers, the voluntary staff and the DNO in this instance, SSE, in trying to deal with an unprecedented situation, as he recognised. He was right to point out that it was not only the high velocity but the direction of the winds that posed a huge challenge.
As the hon. Gentleman knows, I speak to counterparts across the border in the devolved Administration frequently; in fact, I was on a panel with the Cabinet Secretary yesterday and it is something that we are talking about all the time. We have not specified the amount of money, if there will be any. I do not think we have reached that conversation, but we are in constant dialogue with his colleagues in Holyrood.
Dr Neil Hudson (Penrith and The Border) (Con)
In my constituency and further afield, areas such as Alston, Garrigill, Nenthead, Kirkby Stephen, Matterdale and North Stainmore have been hard-hit by the power crisis. Some of those areas have had their power restored, but others are still without power. Will my right hon. Friend join me in thanking the engineers at Electricity North West, the emergency services, councils and volunteers who have been working so hard? Can he assure my constituents and people further afield that everything is being done across Government to support them, to help to restore power and to put in place contingency measures?
Kwasi Kwarteng
My hon. Friend will know that this is a matter of grave concern and focus for the Government. He will also appreciate that Electricity North West has done a reasonable job in restoring power to 95% of people affected, but clearly we want to work harder to make sure that those 6,000 or 7,000 people who are still off the grid can get their power back as soon as possible.
Tim Farron (Westmorland and Lonsdale) (LD)
I, too, send my condolences and pay my respects to those who have lost their life in such awful circumstances, in particular to the family of the man who passed away in Ambleside on Friday. At least 7,000 homes in my constituency have been without power for between three and five nights. I am immensely proud of the way that people in our community have stood up to support one another and their neighbours—they know who they are. I am also grateful to those working on the ground for Electricity North West to try to fix the problem as soon as possible.
In my communities and elsewhere in Cumbria, thousands are still without power. They feel forgotten, but they have not been, I hope, by many hon. Members here. Places such as Killington, Garsdale, parts of Coniston, Orrest Head, Ayside, High Newton, Low Newton, Witherslack, Hincaster, Lambrigg, Bowston, Hutton Roof, Crook, Outgate, Haverthwaite, Spark Bridge, Backbarrow, the outskirts of Windermere and others are facing a sixth night without power. Some people are being told that their connection will not be fixed until 8 December—this time next week.
The hardship caused, particularly to the elderly and other vulnerable people is unthinkable, which is why it is massively disappointing that it took until Wednesday for a Minister to come to the House to address the issue. It is not too late for the Government to act, however, so I ask the Secretary of State to task the Army to provide support to the engineers on the ground in Cumbria to speed up fixing the problem; to then use the Army to ensure that the most vulnerable are contacted and moved to emergency accommodation today; and to ensure that every affected community in Cumbria is given generators to provide at least a temporary fix today so that no one has to spend a sixth night in the cold.
Kwasi Kwarteng
We are contacting local resilience forums, listening to them and getting guidance from them as to how best to tackle the situation on the ground. The hon. Gentleman will appreciate that Electricity North West has already provided 150 generators. We will task it to see what more can be done to alleviate the extreme stress and challenging situation that many of his constituents face.
Mr Richard Holden (North West Durham) (Con)
I thank the Secretary of State for his statement. Storm Arwen has left thousands of my constituents without power for several days. It has been heartening to see how people in my local towns and villages have come together, particularly in Upper Weardale, Eastgate, St John’s Chapel, Quebec, Wilks Hill and Maiden Law. I also have a secondary school that is still without power, so several hundred children are not getting the education that they need.
I am delighted that the Energy Minister, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), is in North West Durham today. I thank him for his visit and for what he is doing there. He has contacted several local businesses on my behalf.
I will raise a couple of things with the Secretary of State. First, one of my rural surgeries has lost £10,000-worth of flu vaccines due to the electricity going down and the fridges going off, which will affect its ability to roll that out. Can he speak to the Department of Health and Social Care to ensure that the supply is reimbursed as quickly as possible? Secondly, some isolated communities have been told that it may be a long time before they can get full electricity. Will he do everything possible to ensure that they are reconnected well before Christmas? Finally, can he ensure that the Government respond positively to any request from the local resilience forum, including sending in the Army if necessary?
Kwasi Kwarteng
My hon. Friend will know that I am keen to engage with local resilience fora and hear from them what is the best way to proceed. He will also appreciate that we are incredibly conscious of the ramifying effects of the storm, particularly in regard to health and education. He knows that I am taking that up within Government. I take the point about isolated communities extremely seriously and I will be looking at that on a daily basis. I will say publicly that being without power until Christmas is simply unacceptable and I will do everything I can to make sure that that does not happen.
Liz Twist (Blaydon) (Lab)
I thank the Secretary of State for the statement, but in my constituency, pockets of people remain without energy, including in Ryton, Blaydon, Wylam—the part that is in my constituency—Victoria Garesfield, Coalburns and Byermoor. Six days on, all those places are still without energy and people are anxious and finding it extremely difficult to get through to find out information. Will he assure me that Members of Parliament will have direct lines and contacts so that we can get detailed information to tell our constituents? I thank the workers who have been out there in all weathers trying to reconnect people.
Kwasi Kwarteng
The hon. Lady is right to point out that there needs to be a way for right hon. and hon. Members to engage with DNOs and constituents, and I will look into that. I picked up on precisely the point about communications with the CEO of Northern Powergrid, the DNO relevant to her constituency, and he said that, having had a slow start at the weekend because the situation was completely unprecedented, they are working very hard to make sure that communications are effective. I reinforce the point that I made to my hon. Friend the Member for North West Durham (Mr Holden) that we will do everything we can to make sure that the generating of electricity happens long before the dates that are being bandied about for when they should be up and running.
Robert Largan (High Peak) (Con)
I thank the Secretary of State for the statement and for meeting me yesterday to discuss the situation in High Peak where thousands of homes have been left without power since the weekend, including in places such as Buxton, Chapel-en-le-Frith, Wash, Bagshaw, Sparrowpit, Wormhill, Peak Forest, Chinley, Hayfield and more. I put on record my thanks to the engineers at Electricity North West, as well as to Derbyshire County Council, the local resilience forum, the emergency services and our amazing mountain rescue teams for working to not just reconnect power but help the most vulnerable who have been affected. Unfortunately, some homes are experiencing their fifth day without power. I ask him to commit the Government to do whatever is needed and to provide whatever resources the local resilience forum requests to get power back to everyone in the High Peak.
Kwasi Kwarteng
As I have said to a number of hon. Members today, we are absolutely committed to getting power back. I need to reiterate that 95% of people who were affected now have their power back, but if someone is part of the 5% still without power, that is clearly no solace and will not help them in that situation. It is absolutely incumbent on me and my Department to make sure that we do whatever we can to resolve it.
Grahame Morris (Easington) (Lab)
I also acknowledge the heroic efforts of the engineers and emergency workers in seeking to restore power, and of the communities, businesses and residents across my constituency who have stepped up to support the elderly, local care homes and vulnerable people who have been left without power for five days. However, the Secretary of State has some important questions to answer. When the Met Office issued a red weather warning that there was a danger to life, what steps did he take to move basic resources, bottled water, emergency generators, fuel and blankets to the affected areas? What arrangements were made to consider the deployment of the Army—the Royal Engineers—to identify alternative accommodation and establish community reception hubs for those, particularly elderly people, left without power and in need of support? From where I am and my constituents are, the performance has been lamentable. There has been a complete lack of planning and foresight. I am sure that the whole House would welcome answers to those questions.
Kwasi Kwarteng
I do not accept the hon. Gentleman’s characterisation of where we are. He will appreciate that, over many years, we have had local resilience fora, which have acted incredibly speedily and with incredible dedication. They are precisely the organisations that know what the situation is on the ground, and I and my Department have been engaging with the people involved. They are responding extremely effectively to this difficult situation.
Simon Fell (Barrow and Furness) (Con)
Storm Arwen hit my constituency, like many others, very hard. Thousands of homes were left without electricity. Thankfully, that is now down to the hundreds, but those people are facing their fifth night without power. I reiterate requests for the Minister to listen to any calls from the local resilience forums to step up Government support.
On lessons learned, so many of my constituents have come to me feeling really dismayed by the fact that they are being pushed online to get information about what is happening and where support is coming from. However, if people do not have power or broadband, they simply cannot access those services. When the Government look at this, can we make sure that we look at how best to communicate with people who have no access to regular communications channels?
Kwasi Kwarteng
The communication point is fundamental. I have spoken to the CEOs of the DNOs and I am speaking to the local resilience fora; we are absolutely committed to having much, much easier and more fluent channels of communication in future. My hon. Friend will appreciate that this issue will not go away. There will be other incidents, and he is right to stress that we need a more resilient system.
Ian Lavery (Wansbeck) (Lab)
This storm was catastrophic; it had a devastating impact, with destruction right across my constituency and in Northumberland as a whole. This is about not just the power, but the destruction of properties, allotments and houses across the piece. People are looking towards some form of financial support from the Government, because this impacts on many people who have not got two ha’pennies to rub together. They will need specific, targeted Government support.
First, I ask the shadow Secretary—sorry, the Secretary of State; I nearly demoted him there—to consider what extra support can be given. Secondly, on isolation and communication, I have in my constituency an old people’s home that lost its electricity at 2 o’clock on Saturday morning and had it restored on Monday afternoon. In between, the lack of communication was unbelievable. Two people in that home were aged 100 years-plus. There were a lot of people with dementia who were frightened and who could not be moved because it would mean extra confusion. This is not acceptable. Will he look at what measures the Government can put in place to make sure that this does not happen again? Communications are very important.
Just before I sign off, I add what a brilliant job Northern Powergrid, its workforce, the engineers, the volunteers in the towns and villages and the council workers are all doing, pulling together to try to ease the effect of Storm Arwen.
Kwasi Kwarteng
The hon. Gentleman is quite right: Northern Powergrid is working very hard to make sure that people get their electricity back. As I said, 95% of the people affected have got the power back. There was an issue with communication on the weekend, I am sad to say. There was a huge surge in demand and not enough infrastructure—there were not enough people in the call centres—to deal with the situation. We will look into that. As Members from the south-east will remember—although there are not many of them in the Chamber today—we had a power outage on 9 August and we did manage to create a more resilient system. I am absolutely determined that this time we will have a more resilient system on the back of these tragic events.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Thousands of my constituents across the Scottish Borders remain without power today after the catastrophic storm at the weekend. I felt the full force of that storm at home in Coldstream on Friday and Saturday. Many old and vulnerable residents have no power and that has been the case for five days. Like others, I pay tribute to the engineers and council workers who have worked so hard to get people connected, but serious questions remain about the failure of ScottishPower Energy Networks to provide accurate information to residents about reconnection times. There are also questions about the support that the Scottish Government provided to local councils across Scotland. What discussions have the UK Government had with ScottishPower Energy Networks and the Scottish Government about the response to the storm, and what more can be done to support my constituents in the Scottish Borders to get them reconnected?
Kwasi Kwarteng
As I said, I spoke to three CEOs of the DNOs. The CEO of ScottishPower was not one of those I spoke to, but I am very hopeful that we can get a call today, and I am looking forward to sharing with my hon. Friend exactly what that distributor is doing.
Mary Kelly Foy (City of Durham) (Lab)
Some of my constituents in places such as Sherburn Hill, Waterhouses, Bearpark and Low Burnhall are facing a full seven days without heating or electricity. This is a national scandal. I thank the emergency services, the workers, the engineers and all the community groups who have stepped up to help those most in need, but what are the Government doing to help the most vulnerable residents in Durham to get the help that they need—not tomorrow, not next week, but today?
Kwasi Kwarteng
As I said in a number of responses, we are working with the local resilience fora. The job of the local resilience forum, in the first instance, is to find out what is going on and to co-ordinate local responses, and then, of course, the Government are very focused on helping them to get what they need to make the situation much more comfortable than it is.
Dehenna Davison (Bishop Auckland) (Con)
We have all seen the photographs of the devastation caused by Storm Arwen and experienced it for ourselves—it is absolutely atrocious. When I was speaking to someone from Northern Powergrid a few days ago, they said that it is the worst damage in living memory. I pay tribute to Northern Powergrid, its engineers and all the local authority workers for all their hard work in trying to get this awful damage fixed.
I also thank the Secretary of State for his statement and for the numerous calls and meetings that we have had this week to discuss the damage and what more can be done to support some of the residents who are still without power. In my constituency, unfortunately, the number is still in the thousands. Place such as Langdon Beck, Evenwood and Middleton-in-Teesdale still face an absolute loss of power. However, in times like these, we see the best in our communities as well, with businesses such as Babul’s and Chocolate Fayre providing support to individuals still affected. Support has also been provided by individuals such as Tommy Lowther, Judith Buckle, Kimberley Clarke and others, including Paul Hedley, who responded instantly to calls to provide a generator—it had been sitting in his garage.
I really want the Secretary of State to address that point about emergency generators. After five days of no power, no heating and no light, the smallest things, such as a single lightbulb, a kettle to boil some hot water, a small heater and a little bit of phone charge, can make such a difference to people. What more can the Government, local resilience forums, local authorities and local charities do to work together to find out where these generators are and to get them deployed to some of these communities who could be facing disruption for days, if not weeks?
Kwasi Kwarteng
I thank my hon. Friend for the tireless work that she and other Members, on both sides of the House, have put in to make sure that their constituents are being well represented and to tell us what exactly it is like on the ground. That is how this House of Commons should work and I am very proud of that.
My hon. Friend will know that we are talking with the local resilience fora about generators. The companies—in her case, Northern Powergrid—are making an effort to get generators out to affected communities, and I am getting a regular update on what has been happening in that respect. I am very happy to speak to her, as I am to other Members, about this emergency.
Richard Thomson (Gordon) (SNP)
Like other Members, could I add my own thanks for the resilience and fortitude of those who have been left without power for so long and the dedication of the engineers who have been getting them back on grid? I also thank everyone involved in the volunteer response and in the local resilience partnerships.
While the priority has to be about getting those who remain off-grid back on to an electrical supply and supporting those who are not on-grid at the moment as best we can, there will at some point be an examination of how things could have been done better. There is an issue about the resilience of our communication infrastructure as well as our power infrastructure, because broadband went down and mobile phone networks went down, which hindered in many respects, the ability of people to respond. Will the Secretary of State consider, as part of that, looking at the obligations placed upon not just power distribution companies, but telecommunications providers to provide a more secure and robust service in all circumstances, no matter how adverse they might be?
Kwasi Kwarteng
I wholeheartedly agree with what the hon. Gentleman has just said. It is very easy for us simply to come up with a statement and then hope that the problem goes away, but I have made a firm commitment, as we did, as I have said, on 9 August 2019, when there was a power outage and we spent a couple of months, if not longer, having a proper inquiry as to what went wrong. I am confident that a lot of the measures that we came up with then did provide resilience. It is exactly in that vein that I want to approach this very difficult situation. It will not be the case that we will simply walk away from it; we will be trying actively to learn lessons. We cannot abolish extreme weather—well, we can in the long run, but we cannot do it perhaps as quickly as we would like—but we can certainly learn lessons to build more resilience.
David Duguid (Banff and Buchan) (Con)
Can I thank my right hon. Friend for his statement today and his commitment, as well as that of the Prime Minister earlier this week, including his commitment to provide any support that the UK Government can in Scotland in particular? I would like to associate myself as well with his remarks and those of other hon. and right hon. Members across the House in recognising the Herculean efforts not just of the power companies, but of local communities who have come out in force to support our neighbours, and friends and neighbours around those communities.
In a spirit of helping the hon. Member for Angus (Dave Doogan), the numbers he produced earlier were from I think 9 o’clock last night, but some numbers came out earlier today which show that, from the 9,500 customers who were still looking for power last night, it has come down to 6,400, 3,700 of those being in Aberdeen and Aberdeenshire, with areas such as Auchnagatt, Forglen, Methlick and New Byth coming on stream overnight. They will be delighted, but of course there are still 3,700 in Aberdeenshire and Aberdeen city for whom that is not much solace, as the Secretary of State said. So can I ask him what conversations he has had with the Scottish Government and the local resilience programmes in Scotland not only to get the power back on as soon as possible, but to make sure that we are focusing on helping the most vulnerable in our communities—those who are not on Facebook or on the internet and who do not have access to the regular updates that we all try to give?
Kwasi Kwarteng
My hon. Friend is absolutely right. This sort of crisis does not affect everyone equally. There are vulnerable and isolated communities that are particularly affected by this outage and our focus is on that. He will appreciate that the DNO in his area—I think it is SSE—has worked very well in providing support. It is providing accommodation in some instances, hot meals and food, and we are continuing to push that.
Alex Davies-Jones (Pontypridd) (Lab)
I am grateful to the Secretary of State for his update on the impact of Storm Arwen and my thoughts are with everybody impacted by this terrible natural event. Residents and businesses in Pontypridd were devastated by Storm Dennis in 2020. They were hit by horrendous flooding and, sadly, they are still, even now, feeling the impact of that. Although it is vital that residents and businesses get urgent help in the immediate aftermath, the long-term impacts are still massively impacting these people. Some are unable to get insurance, many have been hit by unnecessarily high insurance premiums and some have not even been pointed to Flood Re. So will the Minister please work with colleagues to look again at Flood Re and ensure that everybody—businesses and residents—can get access to affordable insurance?
Kwasi Kwarteng
I think the hon. Member is right. Many of us across the House have had instances of flooding and extreme weather events over the last 10 years. I myself, in my constituency, had a very extreme case of flooding in 2014 and the issues she raised with regard to insurance and lessons learned are things I am very conscious of. I would be very happy to take this up with her in any subsequent conversation or meeting.
Mr Philip Hollobone (Kettering) (Con)
Storm Arwen was an extreme weather event, but we are having more extreme weather events as the climate changes. Already, every winter in this House we have urgent questions and statements on power outages caused by electricity distribution lines coming down, and train disruption caused by electrical lines failing. The long-term fix is to increase the resilience standards of the poles, pylons, wires and connectors on the system. It is not to do with local resilience forums, which are more about responding to crisis; this is about raising the technical standards of the equipment that is deployed. An example is undergrounding electricity lines, which could be as much as 20 to 30 times more expensive than an overhead line, but, especially near more populous areas, that may well be part of the solution. Will the Secretary of State be kind enough to look at the technical standards of the electricity distribution network, because we need to raise those in the face of climate change?
Kwasi Kwarteng
My hon. Friend is absolutely right to raise the infrastructure challenges that we are experiencing in extreme weather conditions, which will probably be more frequent given the climate change to which he alluded. He will appreciate that, essentially, a whole new infrastructure not only takes time, but means paying considerable amounts of money, and in the meantime we have to deal with those extreme weather events, so the local resilience forums are very important. He is quite right to say that they do not solve the infrastructure problem long-term, but it is really important that they can act nimbly, because we can improve our infrastructure standards, but we are not simply going to abolish the threat of extreme weather conditions.
Mick Whitley (Birkenhead) (Lab)
The immense disruption caused by Storm Arwen over the weekend demonstrated how vulnerable much of the country is to extreme weather events. Recently, businesses and residents in my constituency were devastated by extensive flooding following torrential rainfall in the space of just a couple of hours. With climate breakdown set to make such events a more frequent occurrence, can the Secretary of State inform the House what steps his Department will be taking in conjunction with his colleagues at the Department for Environment, Food and Rural Affairs to improve the resilience of communities such as Birkenhead to extreme weather?
Kwasi Kwarteng
The hon. Member raises an important point, and he also alludes to the nature of the problem. BEIS is responsible for electricity and DEFRA has been particularly effective in responding to flooding, and he is quite right to suggest that both our Departments are working together, as we do with other colleagues across Government, and are more and more focused on the effects of climate change—and that is what it is—on our infrastructure and our people. We are working together to try to solve that general problem.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his statement. I also wish to convey my party’s and my own sincere sympathies to the family of Francis Lagan, who was killed by a falling tree during Storm Arwen in Northern Ireland. Can the Secretary of State outline what support is available specifically for businesses that rely on the internet that may have to wait weeks for its restoration? It was on the news this morning, and it was very clear that businesses in Yorkshire and elsewhere are finding it difficult to reconnect and take bookings. Can the Secretary of State allocate an urgent funding scheme to allow short-term contract mobile hotspotting to take place in the interim—just to help those businesses, as they need it right now?
Kwasi Kwarteng
This is clearly a matter for urgent discussion. The hon. Member will appreciate that, in my role, I cannot stand up such funds immediately. I think a lot of the onus will be on the devolved Administration as well, so I am very happy to take that up with colleagues in Northern Ireland as well as with my right hon. Friend the Secretary of State for Northern Ireland.
Adult Social Care
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister for Care and Mental Health (Gillian Keegan)
With permission, Mr Speaker, I would like to update the House on our plans for adult social care.
Today we are publishing our ambitious 10-year vision for adult social care—our White Paper: “People at the Heart of Care”. It is a product of years of work, not only by every level of Government, but by many involved in the sector, including people who give care, people who draw on care, and their families. I wish once again to underline my appreciation and admiration for everyone who works to deliver this most vital of public services, especially through this challenging pandemic.
Those working in social care—both paid and unpaid—deserve our deepest respect, yet they also deserve a system that works for them, and it is fair to say that that has not always been the case. Time and again, we in this House have heard about the challenges: the high turnover in the workforce; the lottery of how people pay for care; unsustainable local markets; the varying quality and safety of care; the low uptake of technology; those carers who are not just unpaid, but under-appreciated; and the complexity of the system for everyone involved. I am sure hon. Members will have their own challenges to add to that list. Make no mistake, these are complex issues—so complex, of course, that successive Governments, over decades, have decided to duck rather than deal with them. This Government, however, are determined to get it right. After all, we cannot be serious about levelling up unless we are also serious about social care.
In September we took a vital first step on the road to fixing this generational problem when the Prime Minister, the Chancellor, and the Secretary of State announced our new health and care levy. The focus on how we must pay for it is absolutely right, but we were clear then, and we are clear now, that there is much else we need to do. The White Paper contains more detail on what we plan to do over the next three years to transform the sector over the next decade. It is underpinned by three core principles: first, that everybody has choice, control and support to live independent lives; secondly, that everyone can access outstanding personalised care and support; and thirdly, that adult social care is fair and accessible for everyone who needs it.
The principles we hold are important, but we know we will ultimately be judged on our actions. I will therefore set out some of those actions before the House. First, giving everyone the choice, control and support to live independent lives requires both physical and digital infrastructure. We are investing £300 million in housing. That investment will support local authorities to increase the range of new supported housing options, because it is vital that people live in homes that meet their needs and give them the independence they require. Moreover, we are setting up a new practical support service to help people with minor repairs and changes, which will help them to live independently for longer. That is in addition to increasing the upper limit of the disabled facilities grant for home adaptations, which includes things such as stairlifts, wet rooms and home technology.
The digital infrastructure we put in place can be equally transformational, because we know that digital tools and technology can support independent living and improve the quality of care. We are therefore putting at least £150 million of funding to drive the greater adoption of such technology, with the ambition to achieve widespread digitisation across social care. We are setting up a new national website, which will explain all the upcoming changes, and we are piloting innovative new ways to help people understand and access the care and support they need.
Our second principle is to ensure outstanding personalised care and support, and at the heart of that is looking after the people who work in care. We are spending at least half a billion pounds on the social care workforce over the next three years. Some of those funds will help us to deliver new qualifications and better career routes in care, which we know is crucial for holding on to our caring and compassionate workforce. We are also directing funds into stronger mental health and wellbeing support for care staff, because colleagues cannot care for people unless we care for colleagues. We are putting funds behind a change in the services we provide to support unpaid carers, and we will find and test what works best for those who are caring under challenging circumstances. Regardless of whether that solution is old or new, if it works, we want to do it. We are also considering funding local areas to support their efforts to innovate around the care they provide, so that they can provide more options that suit people’s individual needs. Those new models of care, including housing with care, have the potential to play a pivotal role in delivering care that promotes prevention, is more personalised, and enables people to live independently.
Our third principle is care that is fair and accessible for everyone. We are introducing a cap on care costs so that no one will have to pay more than £86,000 over their lifetime. That cap will be there for everybody, regardless of any conditions they have, how old they are, or how much they earn. It is a universal cap. Importantly, it will provide everyone with the peace of mind of knowing that the days of unlimited and unpredictable costs are coming to an end. The reforms will also make the existing means test far more generous, compared with both the current system and with previous abandoned proposals. Crucially, the £100,000 upper capital limit will be available to those in home care, and we expect many more people to be in home care. Let me be clear: no one will be worse off compared with the current system, and many, many people will be better off. All the ambitious plans that we are setting out today must be underpinned by a sustainable care market. The £3.6 billion we are giving to reform the social care charging system will help all local authorities to pay a fairer rate for care, and put back into the system the fairness we all want.
Before I conclude, Mr Speaker, allow me to put on record once again my thanks to everybody who has played their part in developing this important White Paper. The reform of social care in this country has been ducked for far too long, but we will do whatever it takes to take on this tough challenge, and we will get it right. Today’s White Paper is an important step on our journey to giving more people the dignified care that we want for our loved ones, setting out important changes that will last for generations and stand the test of time. As a Government we are determined to get this right—I am determined to get this right—so that we can build the healthier, fairer, and more caring country that we all deserve. I commend this statement to the House.
Liz Kendall (Leicester West) (Lab)
I thank the Minister for advance sight of her statement—but really, is that it? There are some things she said for which Labour has been calling for some while, and which we support, such as improving housing options for older and disabled people, and the potential for technology to improve standards of care. However, there are two central flaws to the Government’s approach. Ministers have utterly failed to deal with the immediate pressures facing social care, as we head into one of the most difficult winters on record. They have also failed to set out the long-term vision and more fundamental reforms we need to deliver a care system that is fit for the future.
Last week we learned that a staggering 400,000 older and disabled people are now on council waiting lists for care, with 40,000 waiting more than a year. There are more than 100,000 staff vacancies, and turnover rates are soaring. Because of those shortages, 1.5 million hours of home care could not be delivered between August and October alone, and half of all councils report care homes going bust, or home care providers handing back contracts. Hundreds of thousands of older and disabled people are being left without vital support, piling even more pressure on their families and the NHS at the worst possible time, yet the Minister has announced absolutely nothing new to deal with any of that.
Where was the plan to end waiting lists for care? Unless people get support when and where they need it, they will end up needing more expensive residential or hospital care, which is worse for them and for the taxpayer. The Minister was silent on that issue. Improving access is the first step we need to deliver a much more fundamental shift in the focus of support towards prevention and early intervention so that people can stay living in their own homes for as long as possible. But without enough staff with the right training, working in the right teams, that will never be achieved.
Where was the long-term strategy to transform the pay, training, terms and conditions of care workers, to deliver at least half a million additional care workers by 2030 just to meet growing demand, and to ensure that care workers are valued equally with those in the NHS? Can the Minister tell me why the Government persist in having separate workforce strategies for the NHS and social care when the two are inextricably linked? And can she tell me how some kind of website is going to pay a care worker’s bills or put food on the family table? No wonder staff are leaving the sector in droves.
The proposals for England’s 11 million family carers, who provide the vast majority of care in this country, are frankly pitiful. Unpaid carers have been pushed to the limit looking after the people they love. Almost half had not had a single break for five years even before the pandemic struck, but I understand that the additional funding in the White Paper amounts to just £1.60 a year more for each unpaid carer. Families deserve so much better than this.
What we needed today was a long-term vision to finally put social care where it belongs—on an equal footing with the NHS, at the heart of a modernised welfare state. At its best, social care is about far more then helping people get up and be washed, dressed and fed, vital though that is; it is about ensuring that all older and disabled people can live the life they choose, in the place they call home, with the people they love, doing the things that matter to them most—in other words, an life equal to everybody else’s. That should have been the guiding mission of the White Paper, with clear proposals to make people genuine partners in their care by transforming the use of direct payments and personal budgets and ensuring that the views of users and families drive change in every part of the system, from how services are commissioned to how they are regulated and delivered.
This White Paper falls woefully short of the mark, and the reality of the Government’s so-called reforms is now clear—a tax hike on working people that will not deal with the problems in social care now and will not even stop people having to sell their homes to pay for their care, as the Prime Minister has repeatedly promised. Under the Conservatives’ plans, if someone owns a home worth £1 million, over 90% of their assets will be protected, but if their home is worth £100,000, they could end up losing it all. Millions of working people are paying more tax not to improve their family’s care or stop their own life savings being wiped out, but to protect the homes of the wealthiest. This is not fixing the crisis in social care, let alone real social care reform. It is unfair, it is wrong, and the Government must think again.
Gillian Keegan
I thank the hon. Lady for her warm welcome for the White Paper. [Interruption.]
Gillian Keegan
It is not a laughing matter—it certainly is not. Of course, calling for something is much different from delivering something. We are taking steps to fix social care. We are grappling with this challenge, and we will meet it. In 13 years, what did Labour do? Two Green Papers, one royal commission, one spending review—and the result? Absolutely nothing. They are good at calling for things, but they are not very good at delivering things.
The hon. Member for Leicester West (Liz Kendall) mentioned immediate pressures. It is right to say that there are immediate pressures on all our workforces as we bounce back from the pandemic, but in particular on our health and social care workforces. We have always said that. We have challenges across the winter, and we know that we need to meet those challenges. That is why we put a winter plan in place, and it is why we have given additional funding to the sector. We have given additional funding to the sector all the way through the pandemic. We have given an extra £2.5 billion.
For the workforce specifically, we gave £120 million for January to March this year. That resulted in 7.5 million extra hours in the sector and 39,000 new recruits. As that was a successful intervention, we have repeated it for this period. In fact, that money—£162.5 million—has just started landing in councils’ bank accounts, and that is to take them up to March. We know there are pressures, and we know there is a lot of competition for labour, but we hope that that will be as successful as the previous interventions.
Of course, this is a 10-year vision, and we have to start with that vision. [Interruption.] I know that the hon. Lady and Opposition Members will look forward to reading the White Paper and seeing the vision.
Gillian Keegan
It will take long. It is over 100 pages, so it will take a reasonable time if Members are interested in actually finding the solutions.
The hon. Member for Leicester West also asked about workforce strategy and the NHS compared with social care. Obviously, the people in the NHS are employed by the NHS, which is a public body. Social care is largely a private system. There are 18,000 or more businesses. That is why it is a different sector and why we deal with workforce strategy differently. However, we have £500 million to invest in the social care workforce and to make sure that we invest in the knowledge and skills framework, careers options and so on.
There are 1.54 million workers in the sector and they are hugely valued. The hon. Lady said they are leaving in droves. Actually, what we have in the sector is a continual demographic shift in terms of need, and it grows by 1% to 2% every year, so we are always trying to recruit new workers into the sector. Of course, it is very important that these fundamental reforms take place so that we get more people attracted to the sector, more people staying in the sector, more people progressing in the sector and more people providing excellent care all day, every day, providing a lifeline to people across the country.
Jeremy Hunt (South West Surrey) (Con)
I thank the Minister for her work putting the White Paper together in a very short period. I know that she has put a lot of effort into it, but it is hard to see it as more than three steps forward and two steps back. The step forward, which we should acknowledge, is the introduction of a cap. Whatever the arguments about what counts towards the cap, having a cap will make a big difference to many people, and that is welcome.
However, these measures do not really give confidence in two crucial areas. The first is the funding to local authorities for their core responsibilities. The White Paper barely gives them enough to deal with demographic change and national living wage increases, and it is a long way off the £7 billion-a-year increase the Health and Social Care Committee called for by the end of the Parliament. It is also hard to see the NHS and social care systems being fully integrated, as they should be, and an end to the workforce crisis, which sees 40% turnover in many companies.
This is a start. The Minister is a very capable new Minister and I personally have great confidence in her, but will she bring forward further measures to deal with those huge problems? Otherwise, we will see hospital wards continuing to be full of people who should be discharged, and older people not getting the care they need because the carers do not exist.
Gillian Keegan
My right hon. Friend is right that this is a start. It is a 10-year vision, and obviously we had a three-year spending review and the spending that we set out was a three-year spending settlement, so of course it is just a start.
On the steps to ensure that local authorities move to a fair rate and a fair cost of care, we are exploring a number of options, and we will set out further detail at the local government finance settlement later this year. Local authorities moving towards a fair rate of care is key to building a solid foundation for the future adult social care system, so we will be working closely with them to shape the best possible approach to implementation across different local markets. We will shortly be engaging with local authorities and providers, and we will publish further guidance in due course.
My right hon. Friend is absolutely right about the workforce. I have never worked in a business where the workforce was not key to anything that needed to be delivered, but in the care sector in particular, it is impossible to deliver anything without the workforce. It is also difficult to look at the workforce structure. As I say, it is the largest workforce in the country, with 1.54 million people working in it, but with 40% churn and very high amounts of zero-hours contracts and of retraining. I have never seen something that has that—[Interruption.] This has been the case for decades, and nobody has done anything to address it. [Interruption.] Nobody has done anything to address it. We do need to address it, and that is what we are here to do today, but—[Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Please do not shout at the Minister.
Gillian Keegan
Thank you, Madam Deputy Speaker. As was clear from their 13 years in Government, Labour Members are not interested in finding the answer, and they are certainly not interested in listening to my version of giving the answer.
Having 40% churn and such a high degree of insecurity in the workforce is not sustainable, so we need to fix that. We need to put the knowledge and skills frameworks in place. We need to invest in training and learning. We need to ensure it is captured and transferable. We need to have career routes that mean people can progress in the workforce. In my short time in the job, that has been immediately identifiable. The hon. Member for Sheffield, Heeley (Louise Haigh) and I worked on professionalising the social care workforce about four-and-a-half years ago, when we set up the all-party parliamentary group on social care. The issue has been recognised. It is not easy to fix. It is a large private sector. There is very large and increasing demand, but we are going to take the steps to fix it and the White Paper starts that process.
Dr Philippa Whitford (Central Ayrshire) (SNP)
The challenges in social care of increasing need and demand are the same across the four nations, but until now the approach has been very different. The Scottish Government have always believed in seeing social care as an investment in allowing everyone to participate in society and live as independent and satisfying lives as possible. I therefore welcome the change in narrative and tone in the statement.
The Feeley review, which was carried out last autumn in Scotland, plans a human rights approach to social care, and sets out a path to developing a national care service to ensure high quality standards right across Scotland for its users, and also fair terms, conditions and career development for staff. As has been said, workforce is absolutely central to all services and social care is delivered by people for people. The Scottish Government pay the real living wage—not some pretendy living wage, but the real living wage. Will the Minister commit to raising pay for social care staff in England to £10 an hour, as the Scottish Government have planned from this month?
Brexit and the loss of freedom of movement have, unfortunately, exacerbated workforce shortages in both the NHS and care systems, with a shortage of well over 100,000 in care. Will the Minister urge the Home Secretary to widen the eligibility of the health and care worker visa to actually include care workers? It is quite bizarre that it does not include care workers.
Scotland is the only nation that provides free personal care, which is now being valued by the UK Government at £86,000 a head. Will the Minister consider, in this redevelopment, providing free personal care to people in England? While the Scottish Government are planning a 25% uplift in social care funding over this Parliament, the national insurance uplift will go largely on tackling the NHS backlog over the next three years. Does she not recognise that the care crisis is right now? The problems in A&E are not caused by people coming to A&E, but by the difficulty of getting patients into beds due to delayed discharges, which are due to the lack of social care provision. Will she state, as has been called for, what funding will go to social care right now to tackle the crisis as we go into this winter?
Gillian Keegan
Many countries across the world are grappling with this issue. We have an ageing demographic and we now live in different ways. We live much longer with more complex needs, and often we are not close to our families as we have increasingly globalised. Many countries are looking to address those challenges, including Scotland. It is important that we build the talent pipeline here. It is important that we not only invest in and train our own people, but that we build sustainability. We cannot always rely on taking workers from many other countries. We have a visa route for senior social care workers and we have reduced salary levels—I think £20,480 is the salary level—so in Scotland that probably fits the minimum hourly rate. Of course, we have had different approaches. We had a commission on adult social care which gave results in 2011. That is what we have used to build the basis of our reforms and I know Scotland has taken a different approach.
Damian Green (Ashford) (Con)
I congratulate my hon. Friend on reaching this point, which we all agree is just the first step, but it is long awaited. I welcome the principles she set out, but I hope she can expand in particular on the changes that will allow more people to live in their own homes for longer through technology and home adaptations. That would not just reduce the need for residential care and therefore save money, but cut pressure on the NHS and, above all, improve the quality of life of many, many frail older people. What can we expect to see on that front?
Gillian Keegan
I thank my right hon. Friend for recognising that reaching this point is actually a milestone. It is the first time that any Government have reached this point.
Housing is key. We will increase the capacity of local areas to deliver supported housing. We will increase local expenditure on support services for those living in supported housing. We will adapt more supported housing units to make them suitable for use, as well as incentivising longer-term investment in new supported housing by local areas and housing providers. In the coming months, we will be working in partnership with local authorities, housing providers and others to design and establish our new investment in housing.
Mr Clive Betts (Sheffield South East) (Lab)
I welcome the measures to enable people to stay in their own homes. That is exactly what the Housing, Communities and Local Government Committee recommended some years ago in our report into older persons’ housing.
Will the Minister confirm that in the statement there was no money to improve the pay and conditions of the workforce, without which we will carry on getting churn; no money to help companies that are now exiting the social care sector; and no money to deal with the crisis in funding that local authorities are facing, which both the Health Committee and the Housing, Communities and Local Government Committee recognised? Does she accept that without money for any of those things, nothing at all will change?
Gillian Keegan
There is money to invest in the sustainability and professionalisation of the workforce. Local authorities have a local government settlement for this three-year period. We are exploring a number of options and we will set out further detail at the local government finance settlement later this year. That is when the hon. Gentleman will hear more about the costs that councils will have.
Caroline Dinenage (Gosport) (Con)
I congratulate my hon. Friend on bringing forward this milestone piece of work. It really is very long awaited. The devil, of course, is in the detail, and I look forward to reading that detail with great interest. I know she recognises that the care cap alone will not solve the adult social care crisis. We need imaginative and bold system reform. We need much better integration, and, above all, a plan to improve how we recruit, retain and value the care workforce and the army of unpaid carers out there. It is a massive task, but I know she is up to it. I am really keen to get her reassurance that once and for all, we have the Government’s commitment to fix this problem.
Gillian Keegan
I thank my hon. Friend for all her work in this area. Obviously, I have just come in at the end of the journey and many, many people have been working on this issue for many, many years. They should all take credit for that work and for reaching this point. She has my firm commitment that the Government are absolutely committed to fixing social care. As I said, we cannot level up without fixing social care, and of course we all have a vested interest in having a very good social care system.
Daisy Cooper (St Albans) (LD)
This statement is incredibly thin. It feels as though the Government are trying to fiddle with the light bulbs on the Titanic as it is starting to go down. We have an enormous crisis, where people who need care cannot get it and end up going into ambulances, ambulances are now queueing up outside hospitals, and hospitals cannot discharge patients back into their homes or the community because the care is not there. The statement and the White Paper do not address the fundamental problem of fragmentation and integration. The Minister has already accepted that this is now just a first step. Will she be clear with us today on when she will bring forward concrete proposals for how to tackle the problem of fragmentation and integration between the NHS and care?
Gillian Keegan
The hon. Lady is absolutely right that the complexity is broad. We have always anticipated that we would have winter challenges to deal with. With the global pandemic, there is a backlog of all kinds of things that people need—diagnosis, operations, electives and so on—plus all the other challenges such as winter flu and new variants of covid, which are still here. That is why we have specifically put a winter plan in place; we have also set out hundreds of millions of pounds of extra funding to look specifically at the winter challenges and the discharge process. It is not easy, because of the absolute growth in demand. We knew that it was always going to be challenging, and we regularly monitor and measure it with our NHS colleagues.
The hon. Lady mentions a fundamental pillar: the integration of health and social care. That will be subject to another White Paper, which will come early next year and will have more details about integration. She is absolutely right that it is another solid foundation on which social care reform will stand.
Steve Brine (Winchester) (Con)
Obviously I will study the White Paper that has been published today, and I welcome the cap that we are introducing. Opposition Front Benchers may have turned up in force today, although they have scuttled off now, but they did not do anything about the issue in 13 years in government. As far as I can tell from the response today, there is absolutely nothing coming back across the Dispatch Box from any of the Opposition parties.
I think I am right in saying that the upper limit of the disabled facilities grant for home adaptations is being increased. Can my hon. Friend confirm that that will help my Winchester and Chandler’s Ford constituents with things like stairlifts and wet rooms, which are really important to people’s day-to-day quality of life? Will she say exactly when it will kick in, please?
Gillian Keegan
We will commit a further £573 million per year to the disabled facilities grant between 2022-23 and 2024-25. We are also taking steps to ensure that the disabled facilities grant can benefit more people in need. We will consult on some of those steps in 2022.
Helen Hayes (Dulwich and West Norwood) (Lab)
It has been two and a half years since the Prime Minister stood on the steps of Downing Street and promised to
“fix the crisis in social care once and for all with a clear plan we have prepared”.
I think we can all be forgiven for asking what on earth the Government have been doing during that two and a half years—a time when the social care crisis has got worse. Right now, more than 100,000 vacancies exist in adult social care. Care homes are refusing new admissions because of staff shortages. Providers are haemorrhaging staff to better-paid roles in hospitality, retail and distribution. The sector is on its knees as we head into the harshest winter in living memory.
The Minister’s statement today was completely tone-deaf on the scale of the crisis. Can she say, because it was not clear from the statement, how she expects the sector to get through the winter? What does she have to say to the families who are waiting right now for a care home place that simply does not exist under her Government’s failing social care system?
Gillian Keegan
The hon. Lady seems to be the only person in the whole world who has missed the global pandemic, but it occurred during the same period. To answer her specific question, she is absolutely right that there are pressures right now. There are pressures continually in the system, because there is always a need for growth every year, but right now the winter pressures are challenging. As we bounce back from the pandemic, everything is opening again and there is a lot of competition for labour—there are 1.2 million vacancies in the country.
We have invested £162.5 million, which is on its way—it has probably just landed in most councils’ bank accounts. That investment is there for short-term fixes, similarly to what we put in place for January to March this year, which was very successful; it brought forward 7.3 million extra hours and 39,000 new recruits. We have invested in that funding for the workforce, and we keep it under review—we get data every month through a capacity tracker system. We work closely with the sector and will continue to monitor its needs.
Robert Jenrick (Newark) (Con)
Does the Minister acknowledge that one of the flaws with the increase in national insurance is that only 15% of the additional revenue will flow through to local authorities to improve the quantity and quality of care? The remainder will go to protecting relatively asset-rich families’ inheritances and to the very important task of tackling backlogs in the NHS.
Many councils listening to the announcement today will be very concerned about how they will tackle the demographic changes that they face in the years ahead. What does the Minister have to say to them? In the more substantial White Paper that is to follow, what more can she say about reforming the system to integrate care, which might enable efficiencies to help those local authorities to face the future?
Gillian Keegan
On the latter point, I cannot say much more at this point, but a White Paper is being developed and will be available early next year. My right hon. Friend is absolutely right that that is another key part of making sure that councils can deliver on the obligations in the Care Act 2014.
The levy raises £12 billion a year, more or less. For the three-year period, the majority of that sum will go towards catching up with electives in our NHS. There are now 6 million people in urgent care, so that is the right thing to do. However, we know that we will need an increasing share of that fund as we go beyond the three-year period. Many of the reforms in the White Paper and many of the things that we will be working on will help to inform the discussions with the Treasury.
Barbara Keeley (Worsley and Eccles South) (Lab)
Social care is a vital service that has been in crisis for a decade. What we need is reforms to bridge the funding gap so that unmet needs can be met and more care packages can be delivered; a dramatic improvement in pay and conditions for care staff, to halt the exodus out of care work; and decent support for the 11 million unpaid carers who have done so much extra caring during the pandemic. Sadly, what the Minister has announced falls far short of what is needed. Does she actually believe that these half-hearted measures in any way match up to what the care sector needs to survive?
Gillian Keegan
This is a big reform that needs to take place, and it is based on demographic changes in the population all over the world. It is complex, and it will take a lot of time: it is a 10-year vision. I know that the hon. Lady has not had the chance to read our White Paper yet, but I am sure that she will see that there are a lot of things in it.
If we are actually looking to fix something—if we are looking to put a sustainable system in place that offers independence, choice, a great place to work and a great career—we need to fix a lot of solid foundations. I know that the Labour party always wants to throw money at the problem, but actually we need to make sure that the foundations are in place and that proper and sustainable funding is in place. That is what the White Paper delivers.
Chris Grayling (Epsom and Ewell) (Con)
I congratulate my hon. Friend on the progress that she has made so far. Care is a real challenge in a county such as mine, where we have high costs and a fast-ageing population; I ask her to bear that point in mind as she works on the next White Paper.
Closer to the immediate challenges, very many families are uncertain about whether they will be able to visit relatives in care homes over Christmas. A patchwork of measures is in place among different care home providers around the country. Obviously we are dealing with a difficult situation right now, but may I ask my hon. Friend to ensure that a very clear set of guidelines is given to care homes for the Christmas period, so that families know where they stand and so that the elderly, who are among those who have suffered the most over the past two years, get the chance to see their family where possible?
Gillian Keegan
My right hon. Friend makes a very good point. My grandmother was in a care home with dementia; the thought of not being able to see family has been one of the very difficult things throughout the pandemic. I pay tribute to all the care workers, who in some cases took the place of family during the height of the pandemic and were there with their loved ones day and night.
My right hon. Friend is absolutely right that it is very important that visitors can go into care homes, but of course care homes also have to make sure that they are safe, and we need to get the balance right. We have updated the guidelines for visitors and ensured that there is a named essential care giver who always has access to their loved one in care. We have recently updated that guideline, but obviously we will keep it under review as we learn more about the new variant.
John McDonnell (Hayes and Harlington) (Lab)
The Minister has talked about a 10-year vision, but most unpaid carers are just trying to see how they can get through the next week, or the week after that, or the week after that. As has already been pointed out, there are 11 million unpaid carers in the country, many of whom depend entirely on carer’s allowance, a legacy benefit. They never gained the additional £20 of universal credit, and they are living in poverty. What is there in this strategy that will assist unpaid carers and lift them out of poverty?
Gillian Keegan
I agree with the right hon. Gentleman. Unpaid carers are an essential part of the system, and I want to pay a massive tribute to all the people who have been offering care, usually to their loved ones, during this period. As the right hon. Gentleman suggests, during the pandemic many vital services on which carers generally rely, such as respite or day care services, have not always been fully open to everyone, so I have urged all local authorities and providers of those services to ensure that they are.
The White Paper provides for money to help local providers to develop the services that carers would appreciate. There is a specific fund for them to work with carers, and there will obviously be input into that as well. We will ensure that we build services to support this vital sector, and, in addition, carer’s allowance will rise to just over £67 in April 2022.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
Notwithstanding the somewhat churlish approach of the Opposition Front Bench, today’s announcement marks good and steady progress on the part of a Government who have, after many years, started to tackle this important problem, and I think the House should give the Minister credit for that.
Does the Minister appreciate how much this matters to us in Sutton Coldfield, which has a more elderly demographic? In this context, I agree with my right hon. Friend the Member for Ashford (Damian Green). We need coherent policies enabling older folk to stay in their homes for as long as possible. In particular, the newly agreed and enhanced role of the services emanating from the Royal Sutton Coldfield Cottage Hospital in keeping people in their homes is at the front and centre of our plans for ensuring that the White Paper and the accompanying policy have a real impact in Sutton Coldfield.
Gillian Keegan
Of course I am trying not to be too disappointed by the reactions of Opposition Members; I did not really expect an awful lot more.
Areas such as Sutton Coldfield and Surrey are expensive to live in, and we need to recognise that. Most of us, when asked about our future care arrangements, would say that we would like to stay in our own homes, and we want to make that possible. There is a great deal of technology that will help, but it is also important to adapt more supported housing and to work with local groups to deliver the right approach for the right areas, and that will include local hospitals as well.
Jim Shannon (Strangford) (DUP)
I thank the Minister for her statement, and for the progress that she is clearly trying to achieve.
Workforce availability for care homes is vital. Today a representative of a care home bordering my constituency rang to say that a quarter of its staff are off work owing to close covid contacts, although they are now treble-jabbed, and it has no more staff and a lack of agency staff to employ. What can be done through this strategy, Minister, to ensure that the recruitment and retention of care workers are improved?
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I cannot believe that the hon. Gentleman said “Minister” again. I thought that he was beginning to get it, and that he would not make me unhappy any more!
Madam Deputy Speaker
I thank the hon. Gentleman very much for that. I can say “Minister”; it is the hon. Gentleman who cannot. Minister!
Gillian Keegan
Thank you, Madam Deputy Speaker.
The hon. Gentleman has asked a good question. Dealing with covid is very challenging for many workforces, which is one of the reasons for our taking the difficult step of making vaccination a condition of deployment in this sector, and also offering the third dose—the booster—which many of those people have now had. It reduces the likelihood of transmitting or contracting covid, although it does not eliminate it altogether. The hon. Gentleman is right about the pressures on the workforce, which are increased by the need to manage covid in the case of residents and also people who are in their own homes. We have invested £162.5 million to help with those pressures in the short term.
Dr Andrew Murrison (South West Wiltshire) (Con)
I congratulate the Minister on getting a grip on an issue that consecutive Governments have simply ignored since the 1940s, but does she accept that there is a certain irony in our having two White Papers to deal with a matter involving integration?
Will the Minister say a little about how what she has announced today may help to resolve the crying shame of elderly, vulnerable people languishing in acute hospital beds for weeks on end when there is no active medical management plan for them, often at the end of their lives, when they should be being cared for appropriately in homely settings in the community? Will she recognise that until we deal with that, and the huge pressures that it puts on them, their families and our NHS, we will make no progress whatsoever?
Gillian Keegan
My right hon. Friend is absolutely right. People are in expensive hospital beds when they would rather be at home because of a lack of services, or a lack of joined-up service, and that affects hospitals throughout the country. It is a large element of the current pressures, and it happens every winter. It happened every winter when I was a hospital governor. This integration, and the Health and Care Bill which the Minister for Health, my hon. Friend the Member for Charnwood (Edward Argar), steered through the House so ably, will help to solve the problem.
Liz Twist (Blaydon) (Lab)
Our social care staff, whether they work in residential care homes or in people’s own homes, are at the heart of a real change in social care. The Minister has talked about some improvements, but does she accept that improving the pay and terms of employment of those staff is crucial to fixing the problem? What steps will she take to ensure that that is dealt with quickly?
Gillian Keegan
Of course pay is important, but it is not just a question of pay. I joined a group of carers in a domiciliary care round earlier, and I spoke to them about this. They said that the most important thing for them was changing the way in which the profession was perceived, and that they never wanted to hear themselves described as “just a carer”. That struck me as very important, because it was an aspect of professionalising the workforce. Recognition is also valuable. These are private companies, but of course the council is a big buyer of care services as well, and that will feature in the local government spending settlement towards the end of the year.
Mr Mark Harper (Forest of Dean) (Con)
As chair of the all-party parliamentary group on learning disability, I welcome what I understand has been extensive engagement with the sector in the production of the White Paper. I know that it has been much appreciated.
As for the issue of resources, many Conservative Members found it hard to vote for a tax increase of £12 billion a year, but what is really important is for the money to be used effectively. May I pick up what was said by my right hon. Friend the Member for Newark (Robert Jenrick), and suggest that when the local government settlement is published, it should show the settlement for not just one year but a number of years? We could then see a big share of those funds moving from the NHS to social care, which would enable local government to plan appropriately and the NHS to accept that it will not keep that money forever once it has dealt with the backlogs. Many of us are quite sceptical about that. I think that the more transparency there is, the easier the Minister’s job will be in getting those resources into the social care sector.
Gillian Keegan
My right hon. Friend is absolutely right. More than 250 organisations worked with us to develop this White Paper, and I want to thank them for their input. Of course they welcome the steps that we are taking. I do not know how many Green Papers, White Papers and other papers they have tried to get some change from, but this one is finally starting on the road to deliver and transform the sector. He is right to say that the longer we can have some understanding of the settlement for funding, the better, and I am sure that my colleagues who are working on that will have heard his question.
Derek Twigg (Halton) (Lab)
It is disappointing that the Minister does not take seriously our genuine concerns about the crisis in social care. She will have received a copy of the letter sent to MPs recently from the Association of Directors of Adult Social Services. Why does she believe that it said that, in its professional judgment, these measures as they stand
“will not fix the crisis in social care”?
Gillian Keegan
What I have said is that this is a huge step forward. I do not think that I can stand here and say we will fix the whole crisis in social care overnight. As I have said, this is also something that countries all over the world are grappling with. I think that when that letter was written, the short-term funding of £162.5 million had not been sent out to local councils. I hope that they are using that money wisely to increase capacity and retention in the care sector.
Sara Britcliffe (Hyndburn) (Con)
I find it incredible that the Opposition can come here again with no plan and then criticise the Government. It is the same thing for their social media. I really welcome the fact that we are trying to do as much as possible to keep people in their homes, and that the Government are doing something to tackle that, but can the Minister assure me that she is still looking at the regional disparities?
Gillian Keegan
Yes of course. There are regional differences in care. There are lots of regional differences. There are differences in how much the care cap of £86,000 is worth, which is what I think my hon. Friend is concerned about. There are regional differences in how much people pay for care: it is much cheaper in various areas compared with the more expensive areas. I am asked why we will have a fixed sum of £86,000, and that is a good question. If we are looking at it as a percentage of assets, £86,000 will be different for different people, of course. The question was: why should we not base this on a percentage of assets? When I looked at the system we would have to build, I saw that it would be absolutely unworkable. It will be difficult to implement the cap anyway, because we will need a metering system that every council will have to operate for everyone who is paying for social care at different rates and different times. The system that we will have to build is very complex. Having a cap that will also enable us to talk to other players such as insurers, to see what other insurance products come forth, was considered the only implementable way.
Madam Deputy Speaker (Dame Eleanor Laing)
I gently suggest to the Minister that the rule about facing the Chair when addressing the House is not just about courtesy and politeness—I know that she is the most courteous and polite person on the planet. It is also because if she is looking at someone who has asked a question, the microphone does not pick up her voice. I say this to everyone. That is why it is important to face this way; if she does so, she can be properly heard.
Margaret Greenwood (Wirral West) (Lab)
The Minister said that there was a lottery in how people paid for their care. There certainly is, and this is raised with me on a regular basis by my constituents. A quarter of Wirral adults with ongoing health needs were denied continuing healthcare over the summer, according to figures from NHS England. I think the Minister would agree that the CHC—continuing healthcare—system is unfair. Just at the very time when families need support, they often find themselves facing huge bills for care and having to consider selling the home of the person who needs care. Can she tell us what action she will take to ensure that no person has to sell their home to pay for their care, or was that just another hollow promise from the Prime Minister?
Gillian Keegan
I thank the hon. Lady for her question, because this is something that bothers me. It happened to my grandmother. We had to sell her council house, which she had bought under the right to buy that was introduced by a Conservative Government. It is very important that we start to fix this, because under today’s system, everybody out there can go down to their last £14,250. That is all that is protected. It is therefore a very unfair system today. That is why we are making these changes and introducing this cap, to ensure that nobody will ever have to pay more than £86,000. In addition to that, we are putting the means test up to £100,000, so that the cost of care is shared as a person’s assets get below £100,000. That will also slow down the depletion of assets. It will be a much fairer and better system than the one in place today.
Paul Bristow (Peterborough) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
A few months ago, I spoke with a social care service user who told me that living in supported housing made him feel like a king, because he had access to his own private shower. These small, incredibly significant, humanising differences between long-term hospital care and being supported to live independently are striking. Can my hon. Friend confirm that one of the drivers behind this White Paper is to ensure that people can live as independently as possible for as long as possible, and does she recognise that this can be achieved through the integration of social care, mental health and supported housing?
Gillian Keegan
My hon. Friend is absolutely right. Half of the social care budget today is spent on working-age adults. It is not just spent on elderly people. Of course, many people with disabilities or learning disabilities want to continue to work and they want to be supported in that. A supported house and the right mental health support are obviously the right approach, and that is something that we will be working on in this White Paper.
Paul Blomfield (Sheffield Central) (Lab)
The Minister was right in the way she described the crisis in social care. We have residential and domiciliary provision that falls chronically short of what is needed, care staff who are undervalued and grossly underpaid, and an army of unpaid carers—particularly young carers—who do not have the support they deserve. The problem is that what she has announced does not address any of that. It is frankly extraordinary that she says that this is the product of years of work. Where is the substance? As questions from both sides of the House have recognised, does today’s statement not show that when the Prime Minister promised a plan to fix social care, all he ever had in mind was an asset protection scheme for the wealthier, paid for by the many who would never benefit from it?
Gillian Keegan
I want to pay tribute to the 1.54 million people who work in this sector, because they offer the most incredible care, and also to unpaid carers. The hon. Gentleman mentioned young carers, and it is important that we support them. We will work with the Department for Education, which will amend the schools census at the earliest opportunity to include young carers so that we can identify them and put in the support around them. I do not agree with what the hon. Gentleman said about today’s statement. In 13 years, the Labour Government produced two Green Papers, a royal commission and a spending review, but absolutely nothing that has made a difference to anybody. Of course, none of the Opposition Members have yet had the pleasure of reading the plan, but I can assure them that it is a plan that will deliver on a 10-year vision and start the changes that, as my right hon. Friend the Member for South West Wiltshire (Dr Murrison) said, have been ducked since 1940.
Kevin Hollinrake (Thirsk and Malton) (Con)
I thank my hon. Friend for all her work on this, as a Back Bencher and as a Minister. As she will know from our many conversations, I am a fan of the German system, not least because of its greater focus on domiciliary care and on personal budgets, which allow people, instead of relying on the professional workforce, to pay a loved one or a neighbour to provide their care. In many cases, that is much more beneficial for that individual. Is that going to be a feature of the White Paper, which I have obviously not yet had a chance to read?
Gillian Keegan
I know my hon. Friend’s views on that system, because we have discussed it many times. There are two things that I think he will welcome in the White Paper. The first is the focus on people being supported to stay in their own home or in supported housing for as long as possible. The second is personal budgets, which we will be exploring for people after they have been metered towards the cap. There is some use of personal budgets today, but we will be exploring what greater use of them we can put in place.
Mohammad Yasin (Bedford) (Lab)
With 100,000 vacancies in the social care sector, the Future Social Care Coalition has made it clear that failure to act immediately on care workers’ wages will have devastating consequences for the NHS, for the elderly and for other people who are in desperate need of care. Will the Government listen to the sector’s warning that the current and forthcoming hourly rates for care staff are insufficient to retain or recruit staff?
Gillian Keegan
As I said, we have put in place £162.5 million-worth of funding and it has only just gone into councils’ bank accounts. We expect councils will use the funding to retain and grow the workforce.
Earlier I mentioned the all-party parliamentary group on social care, which I set up four years ago with the hon. Member for Sheffield, Heeley (Louise Haigh). At that time the vacancy rate was 122,000, even greater than it is today. We have 1.54 million people working in care, and the need grows by 1% to 2% every year because of changing demographics.
Mr Philip Hollobone (Kettering) (Con)
The number of stranded and super-stranded patients at Kettering General Hospital has recently been increasing. Thankfully it is not at the level it was a few years ago, when as many as 200 of the 550 beds were occupied by stranded and super-stranded patients. They are mainly elderly and vulnerable people who, as the Minister will recognise, should not still be in hospital because they have completed their medical treatment. They need to be placed in an appropriate social care setting or at home with appropriate social care support. When can we expect firm proposals from the Government to address this issue? Unless we can get these very vulnerable people into the care they need, not only will it make life very unhappy for them but it will be extremely expensive and will clog up our NHS.
Gillian Keegan
My hon. Friend is absolutely right, and this is something that happens pretty much every year. For the short term, we have around £500 million as part of our winter plan to focus on the discharge process and to make it work as effectively and as efficiently as possible. Of course, a big part of that is making sure social care is in place. In the longer term, the integration White Paper is key to making sure we have much better processes so that people get the care they need, with the right care in the right place.
Robert Buckland (South Swindon) (Con)
I congratulate my hon. Friend on introducing the White Paper. I see the Secretary of State for Health and Social Care in his place, and I am grateful to him, too, for ensuring the Government published the major part of the White Paper process before the end of the year. We know the integration White Paper is to come, and that will be important.
Other hon. and right hon. Members have asked about accountability on funding and ensuring that we have a share of the pot for social care. In particular, I am interested in the excellent initiative of £300 million going to local authorities for supported housing and increased choice. How will we make sure that money is used to enrich the lives of, in particular, adults with disabilities, who currently do not have the choice they deserve?
Gillian Keegan
I thank my right hon. and learned Friend for his question and, indeed, for all his work in this area. I know this is dear to his heart. I look forward to working with him on a solution.
The £300 million is specifically to help to solve supported housing and to provide much better supported living and mental health support for young adults with disabilities or learning disabilities. Based on conversations with my right hon. and learned Friend, we have also put something in the White Paper on further help to get these young people into work, as many of them want help and support getting into work, and not enough of them are getting that support today.
Points of Order
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Anneliese Dodds (Oxford East) (Lab/Co-op)
On a point of order, Madam Deputy Speaker. Yesterday the right hon. Member for West Suffolk (Matt Hancock) intervened on me to “set the record straight” on whether one of his constituents secured a contract from the Government related to the covid-19 pandemic. He said that claims of such a contract were
“a fabrication pushed by the Labour party—it is a load of rubbish.”—[Official Report, 30 November 2021; Vol. 704, c. 851.]
Yet today the Good Law Project published evidence indicating that a company called Alpha Laboratories won a contract worth more than £40 million from the Department of Health and Social Care in December 2020, and that this company appears to have subcontracted all the manufacturing of goods to another company, Hinpack Ltd, which appears to be run by his constituent.
Madam Deputy Speaker, I seek your guidance on whether the right hon. Gentleman should return to the House to set the record straight by withdrawing the comments he made yesterday.
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the hon. Lady for giving me notice of her point of order, and she will recall that I was in the Chair during her exchange with the right hon. Member for West Suffolk (Matt Hancock). I must ascertain that she has mentioned to him that she intended to raise this matter today.
Madam Deputy Speaker
Thank you for that confirmation. The hon. Lady knows that what is said by one Member to another is not a matter for the Chair. If the facts that have been presented to the Chamber turn out to be wrong, it is incumbent on not only every Minister but every Member to come back to the Chamber at the earliest opportunity to set the record straight. I make no judgment about the facts, because that is not a matter for me. The facts are a matter for debate.
I understand why the hon. Lady wanted to raise the matter. She has done so, and she will know there are various ways in which she can hold Ministers to account for the veracity or otherwise of the facts she is disputing.
Mr Clive Betts (Sheffield South East) (Lab)
On a point of order, Madam Deputy Speaker. I am disappointed that the Secretary of State for Health and Social Care has just gone, because he might have been able to help me with this point of order if you cannot.
I declare my interest, as I have an immunocompromised system and therefore I was very pleased that the Government announced the availability of a third dose for people with conditions such as mine and many others. I am concerned that there has been a lot of confusion between primary and secondary care about who should be advising people of their eligibility.
I therefore tabled a question on 22 October to ask who is responsible for advising people of their eligibility and what the gap will be between a third dose and the booster. The Department of Health and Social Care answered on 27 October saying that it could not answer the question in the required time—that was two months after the policy statement. I asked again on 24 November whether the Government could say who would advise people of their eligibility, and I was told again that the Department could not answer within the required time.
Three months after a major policy announcement, the Government cannot say who is responsible for advising people of their entitlement. Either the Department made a major policy decision without having the administrative arrangements in place to deliver it, or it has the information and is keeping it from Parliament. Neither of those answers is satisfactory, Madam Deputy Speaker, and I wonder whether you can help me get to the bottom of it.
Madam Deputy Speaker
I thank the hon. Gentleman for giving me notice of his intention to raise this point of order.
Mr Speaker has said on many occasions, and I now reiterate what he said, that Ministers have a responsibility to make sure questions are answered within a reasonable time. It would appear that the questions tabled by the hon. Gentleman have not been answered within a reasonable time, and the answers are relevant, ongoing and important to his constituents and indeed all our constituents. The questions ought to have been answered.
The Procedure Committee is monitoring the record of Departments in answering questions timeously, so the hon. Gentleman might also wish to raise the matter with the Procedure Committee. From the Chair at this point, I sincerely reiterate what Mr Speaker has said on many occasions and I hope the matter will have been noted by the Treasury Bench. The hon. Gentleman’s questions ought to have been answered, and I hope they will be now.
Derek Twigg (Halton) (Lab)
On a point of order, Madam Deputy Speaker. I seek your advice. Is it acceptable for the Health Secretary to fail yet again to answer a named day question on time? I have had to wait nearly two weeks for an answer to parliamentary question No. 75821. More worryingly, the answer I received is astonishing. In a statement to this House on 7 September 2021, the Prime Minister announced an increase in national insurance to provide additional health and social care funding. In my question, I therefore asked, for each year up to 2024, what impact this
“additional funding for the NHS will have on hospital waiting times”.
The answer came back:
“No formal assessment has been made. “
Given that the House has voted for additional money to be allocated to the NHS, surely either the Prime Minister or the Secretary of State should come to this House to explain why the Government have not a clue as to how this additional money will affect waiting times, when there are almost 6 million people on the waiting list.
Madam Deputy Speaker
I thank the hon. Gentleman for his point of order. Once again, it is wrong that questions have been asked and they have not been answered within a reasonable time. Of course, the Chair is not responsible for the content of Ministers’ answers but, again, I suggest two courses of action to him. One is to draw the matter to the attention of the Procedure Committee—I have a bit of a feeling it is going to be busy in this respect because I think this is the sixth point of order of this kind that I have taken in the past few days and I am sure my colleagues have taken more. He also, of course, has the option of consulting the Table Office about ways in which he can bring Ministers to the Chamber to answer the questions. His point is made and I am sure it will have been noted.
Barbara Keeley (Worsley and Eccles South) (Lab)
On a point of order, Madam Deputy Speaker. I want to correct the record. The Minister for Care and Mental Health, who has now left her place after the statement, persistently said that there was no White Paper from the Labour Government in 2010. That is patently not true. Our March 2010 White Paper “Building the National Care Service” came out just a few months before the general election. We can send her a copy—I will find one—but it is not accurate to say, when we are talking about these important things, that the Labour Government did not have a plan for social care because we did and it was an excellent plan.
Madam Deputy Speaker
I thank the hon. Lady for her point of order, which, as she knows, is a point of debate. She says that the Minister was wrong in her answer and the Minister thinks she was right in the answer. I am so happy to tell the House that it is not for me to decide who was right or who was wrong, although in this case it does seem that the facts speak for themselves.
Grahame Morris (Easington) (Lab)
On a point of order, Madam Deputy Speaker. I wonder whether I might seek your advice. This is relevant to the previous statement. The hon. Member for North West Durham (Mr Holden) mentioned yesterday that he understood that the Department for Business, Energy and Industrial Strategy offered military assistance to Northern Powergrid, but the offer was refused. Northern Powergrid has stated that no such offer of support was made. Although we may all be critical of the Government and some aspects of Northern Powergrid’s response to Storm Arwen, I know that the hon. Gentleman is an honourable person and he would not want to have inadvertently misled the House and the public as to what support has or has not been offered by the Government. I have, as suggested, given him notice of this point of order, but can you advise how the record could be corrected? Is it possible to give the hon. Member, who, unfortunately, is not in the Chamber at the moment, the opportunity to correct the record?
Madam Deputy Speaker
This is getting somewhat repetitive, but the hon. Gentleman is quite right to raise his point of order. Once again, what another Member has said here is not a matter for me. Clearly, there are facts in dispute. The hon. Gentleman has taken the opportunity to put his view on the record and I am sure that the hon. Member for North West Durham, to whom I trust he has given notice that he intended to raise this point of order—
Madam Deputy Speaker
Thank you. I am sure that, if the hon. Member for North West Durham considers that the facts were not as he stated but as the hon. Gentleman has just stated, he will use the first opportunity to put the record straight. If not, that is a matter for him and not for the Chair.
Matt Hancock (West Suffolk) (Con)
On a point of order, Madam Deputy Speaker. I am grateful to the hon. Member for Oxford East (Anneliese Dodds), on the Front Bench opposite for giving me notice of her point of order, although she gave me so little notice that I could not get here in time to listen to it. She did, however, provide you with a written copy of it, which I have read. The point I would like to make in response is that that point of order, and the point made in it, demonstrate very clearly that there was no contract between the firm being discussed and the Department or the NHS. Of course, the Department of Health and Social Care and the NHS does not have a say in subcontracting arrangements. So what this has done is demonstrated finally and for the record that there was no such contract between my constituent and the Department or the NHS. All this has been looked at by the National Audit Office, which found all to have been done in an orderly way. Finally, no matter how hard Opposition Members look or how deep they dig, all that will be discovered is a lot of people working hard to save lives—that is what was going on.
Madam Deputy Speaker
I thank the right hon. Gentleman for responding to the hon. Lady’s point of order. It is rather unfortunate that he did not have sufficient notice of the point of order. It is a matter for the Chair to make sure that every Member is dealt with in an honourable fashion. The hon. Lady is nodding and acknowledging that she ought to have given the right hon. Gentleman a longer period of notice that she intended to directly criticise him here in the Chamber. But I think we will set that aside because, as I said yesterday, this matter has been dealt with politely and correctly between the hon. Lady and the right hon. Gentleman. There is a difference of opinion, but there is no dishonourable conduct. I am grateful to the right hon. Gentleman for coming as soon as he could to the Chamber to give the facts as he sees them—
Madam Deputy Speaker
The right hon. Gentleman says, “The facts.” It is not for me to make any judgment whatsoever as to the interpretation of the facts. I feel that this matter ought to be at an end and as far as I am concerned it has been dealt with.
John Redwood (Wokingham) (Con)
On a point of order, Madam Deputy Speaker. This relates to the points of order about the answering of questions. I would like you in the Chair and the Procedure Committee to know that I, too, have tabled questions to the Department of Health and Social Care seeking basic information on budgets, manpower plans and other matters for which it should be accountable to this House, and have not had answers.
Madam Deputy Speaker
I thank the right hon. Gentleman for his further point of order on exactly that matter. It is a point well made and it needs no further comment from me. However, I am grateful to him for drawing the House’s attention to what he has just said.
Bill Presented
Trade Agreements (Parliamentary Scrutiny and Farming) Bill
Presentation and First Reading (Standing Order No. 57)
Tim Farron presented a Bill to provide for parliamentary approval of trade agreements; to place a duty on the Secretary of State to consider UK agricultural, environmental and animal welfare standards when negotiating trade agreements; to require the Trade and Agriculture Commission to assess the effects of potential trade agreements on farming, the rural environment and animal welfare and to produce associated reports; to require the Secretary of State to lay such reports before Parliament; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 14 January 2022, and to be printed (Bill 207).
Quarries (Planning)
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Matt Western (Warwick and Leamington) (Lab)
I beg to move,
That leave be given to bring in a Bill to introduce a presumption in planning decision-making against approving quarry development in close proximity to settlements; to require the risks of proposed quarrying sites to health and the environment, including through silica dust, to be assessed as part of the planning process; to make provision about the use of quarries for waste disposal; and for connected purposes.
I appreciate that legislation that seeks to shift the presumption in planning law against quarry development in the health interests of local residents may, at first glance, seem like a parochial issue. However, when planning decisions concern proposals that would have a substantial impact on the local community, central components of democracy—accountability, public health and local representation—are all at play.
Across the land, a great many communities face the prospect of permission being granted for quarries that will not just blight their areas but bring significant risks to human health, while at the same time being, in certain cases, surplus to requirement. As I aim to make clear, a local planning application in my constituency—specifically, in relation to a proposed sand and gravel quarrying site near the villages of Barford and Wasperton—demonstrates the point. It is the issue that originated the community campaign and has motivated me to stand here today and push for a change in the law.
The broader issue lies with existing legislation under the Town and Country Planning (Local Planning) (England) Regulations 2012 and the 2012 national planning policy framework, under which local authorities are legally bound to prepare minerals plans with 15-year horizons. On the one hand, that makes eminent sense, but it is of course dependent on realistic housing and planning projections, and many Members from all parties were victims of the Government’s original malgorithms. On the other hand, it should give due importance to local amenity and public health but, as I will explain, it fails to acknowledge the latest science on air quality and the threat to human health.
Air quality has long been talked about as an issue. The Clean Air Act 1956 addressed the evident shocking risks to human health at that time. The threats were clear for all to see—or not, given the smog of the first part of that century. We should now be alive to the hidden threats of invisible particulates and noxious gases.
In April this year, a coroner concluded that the tragic death of nine-year-old Ella Adoo-Kissi-Debrah was triggered by poor air quality in her community due to vehicle emissions. She had endured 28 visits to hospital because of breathing problems. Following the case, the coroner wrote a prevention of future deaths report that urged the Government to introduce legally binding limits as regards air quality based on World Health Organisation guidelines. That case alarmed the public and should certainly have caused alarm among the Government. While PM10 and PM2.5 are now part of our lexicon in addressing air-quality issues, there are wider issues that urgently need legislation; hence this Bill, which is, in essence, about minimising the impact of emissions on residents’ health, and particularly children’s health.
The science is extremely concerning and there is much research on the issue. On air toxicity, the Environmental Working Group, a US-based body specialising in research and advocacy, has stated that
“none of the air quality standards for silica are adequate to protect people living or working near sand mining sites. The danger of airborne silica is especially acute for children…Silica air pollution has become a danger for residents near open sand mining and processing. Children, older adults and others with existing disease are especially at risk.”
As a result, the group has concerns for any resident living within 1,500 metres of any excavation site, because of the dissipation of dust particles. According to its evidence, gathered in open sandmines in Wisconsin and Minnesota, the silica levels were at least 10 times higher than the recommended limit of 3 micrograms per cubic metre. I can see no reason why that would be much different from levels found in areas that border sand and gravel quarries in the UK.
Let me turn to the proposed Barford and Wasperton quarry. I could refer to many of the other quarries, proposed and in situ, that concern colleagues from all parties, from Alyn to St Albans and a great many communities in between, but Barford is symptomatic of the problem. Warwickshire County Council identified the proposed quarry site as part of its minerals plan. The purpose of the site is the excavation of sand and gravel. Put simply, the site is enormous and almost dwarfs the village. It covers approximately 85 hectares of arable farm land, about 50% of which is high-grade agricultural land, graded BMV, or best and most versatile.
Under the current plan, work at the quarry will take place just 350 metres from the southern edge of the village. Although the county council has proposed measures to reduce dust, that will not prevent the prevailing winds from carrying dust over the village—a point borne out by the US research that I referenced. The dust from the quarry will contain silica, which can be extremely harmful to young children and the elderly. Silicosis, which originates from silicate particles entering the lungs, is best described to a lay person as like asbestosis: it is a killer. The proximity of Saint Peter’s Primary School to the proposed site will put 170 students at particular risk. As I say, the impact of the Barford quarry is not limited to residents but will affect the local environment.
Communities up and down the country face the same challenges. The plans to build on the edge of Attenborough nature reserve—represented by my hon. Friend the Member for Nottingham South (Lilian Greenwood), who was kind enough to put her name to my Bill—could lead to even more substantial interference with nature than the quarry in my own constituency. We see the same issue in respect of Lea Castle Farm quarry in the constituency of the hon. Member for Wyre Forest (Mark Garnier). The site is situated bang in between two—possibly three—villages, with Wolverley to the west and Cookley to the north. The fact that there are four schools within a mile of the centre of the site demonstrates the seriousness of this country-wide issue.
Elsewhere, there are issues with the release of noxious gases from landfill sites—such as Walley’s quarry at Silverdale in Staffordshire and Parry’s quarry in Alyn—that are close to communities, harmfully impacting the quality of life for residents. The Environment Agency has previously shown that hydrogen sulphide levels recorded at the Silverdale site have at times exceeded World Health Organisation guidelines. For the record, hydrogen sulphide is, of course, a poisonous, corrosive and dangerous gas. Children living just half a mile from Walley’s quarry complain of chest problems, bronchiolitis and consistent coughs. Many more complain of severe irritation to their eyes, which is understandable if an acidic gas comes into contact with them.
Let me be clear: I am not against quarries; I am for legislation that ensures that all quarries and landfill sites are located a safe distance from our communities, villages and towns throughout the country, not at locations that favour the businesses or authorities that approve them. We need to ensure that the future need is precisely that. We know that we need to use recyclates more and that we need to use more sustainable materials in construction, so why are we continuing with plans based on the wrong methodologies and old technologies? The Office for National Statistics says that my constituency does not need the housing that my local council and the Government claimed we needed—in fact, the ONS forecasts our need as just half the original figure. I appreciate that any consideration of future planning contains an element of estimation, but it can always turn out to be either too conservative or too liberal. In that respect, the provisions in the Bill would have real force.
In summary, the Bill has three objectives: to create a presumption against granting permission for quarry developments in close proximity to settlements; to impose a requirement to assess the risks of proposed quarrying sites to health and the environment, as part of the planning process; and to make provisions related to the use of waste disposal of quarries. The first objective would, in essence, act as a safety valve for an over-liberal estimation of population sizes and settlement planning. At the same time, it would protect the current residents of neighbouring towns and villages. The provision is inspired by the actions of other countries: in Canada, there is a requirement that quarries have to be 600 metres from settlements, and other countries have introduced minimum distances. We now need to act. Given the science, I believe that the minimum distance should be set at 1,000 metres at least for silicates and noxious gases, as recommended by the research.
There is clearly a need for legislation to address this issue. In an Adjournment debate on this very issue that I secured in October 2019, the Minister who replied—the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Taunton Deane (Rebecca Pow)—concluded by admitting that she was
“unable to address the specific concerns”—[Official Report, 29 October 2019; Vol. 667, c. 344.]
that I had raised. That was no fault of the Minister at the time, but it was the fault of an ill-equipped planning system that fails to provide avenues for local residents to raise legitimate concerns about locally approved quarries. The Bill seeks to close that gap. Given that the World Health Organisation updated its guidance in September, I urge the Government to take the Bill extremely seriously.
In my final remarks, I wish to thank all the teams throughout the country—including the Eykyns, the Steels, Charlotte, Claire and many others—who are campaigning against planning applications. I am proud to promote this Bill and hope that it will be one step further towards protecting the health and wellbeing of local residents up and down the country against ignorant planning systems that do not align with local democratic wishes or recognise the health risks as we understand them today.
Question put and agreed to.
Ordered,
That Matt Western, Mark Garnier, Bob Seely, Daniel Zeichner, Dr Julian Lewis, Matt Rodda, Daisy Cooper, Mark Tami, Lilian Greenwood, Derek Thomas and Rosie Duffield present the Bill.
Matt Western accordingly presented the Bill.
Bill read the first time; to be read a Second time on Friday 28 January 2022, and to be printed (Bill 208).
Finance (No. 2) Bill
Wednesday 1st December 2021
(3 years ago)
Commons ChamberRead Full debate Finance Act 2022 View all Finance Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 1 December 2021 - (1 Dec 2021)
15:47 - The Committee divided: - Ayes: 301 / Noes: 206 - Question accordingly agreed to.
16:02 - The Committee divided: - Ayes: 52 / Noes: 307 - Question accordingly negatived.
17:23 - The Committee divided: - Ayes: 212 / Noes: 306 - Question accordingly negatived.
17:37 - The Committee divided: - Ayes: 215 / Noes: 299 - Question accordingly negatived.
The Chairman of Ways and Means (Dame Eleanor Laing)
With this it will be convenient to discuss the following:
Clauses 6 to 8 stand part.
That schedule 1 be the First schedule to the Bill.
Amendment 5, in clause 12, page 10, line 44, at end insert—
‘, and at the end of section 32(1) insert “, but eligibility for the increased maximum annual allowance from 1 January 2022 to 31 March 2023 is available only to businesses which can demonstrate that they have taken steps to reduce carbon emissions within their own business models and have set out further steps for how they plan to reduce carbon emissions towards a net zero goal”.’
This amendment would restrict access to the extended temporary increase in annual investment allowance to businesses that support transition to “net-zero”.
Amendment 6, page 10, line 44, at end insert —
‘, and at the end of section 32(1) insert “, but eligibility for the increased maximum annual allowance from 1 January 2022 to 31 March 2023 is available only to businesses which do not have a history of tax avoidance”.’
This amendment would restrict access to the extended temporary increase in annual investment allowance to businesses that do not have a history of tax avoidance.
Amendment 4, page 11, line 10, 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 the temporary increase in annual investment allowance, 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 temporary increase in annual investment allowance 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 12 in terms of impact on the economy and geographical reach and to assess the impact of the temporary increase in the annual investment allowance on efforts to mitigate climate change.
Amendment 7, page 11, line 10, at end insert—
‘(3) In paragraph 2(3) of Schedule 13 of that Act—
(a) after “second straddling period is” insert “the greater of (a)”; and
(b) after “of that sub-paragraph” add “and (b) the amount (if any) by which the maximum allowance under section 51A of CAA 2001 had there been no temporary increase in the allowance exceeds the annual investment allowance qualifying expenditure incurred before 1 April 2023.”’
This amendment would amend the transitional provisions for the reversion of the AIA to £200,000 on 1 April 2023, to ensure that smaller businesses with lower levels of qualifying capital expenditure are not disadvantaged by having their effective AIA limit restricted to significantly less than £200,000 for a period.
Clause 12 stand part.
New clause 1—Review of the impact on revenues from tax on dividend income—
‘The Chancellor of the Exchequer must, within six months of the passing of this Act, publish an assessment of the impact on revenues from tax on dividend income of increasing the rates set out in section 8 of ITA 2007 by—
(a) 1.25%,
(b) 2.5%, and
(c) 3.75%.’
This new clause requires an assessment of what extra revenue would be derived by increasing the rates of tax on dividend income by different amounts.
New clause 2—Review of the impact on revenues from banking surcharge—
‘(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, publish an assessment of revenues from the banking surcharge.
(2) This review must consider—
(a) the total revenue raised by the banking surcharge since its introduction,
(b) the total public expenditure on supporting the banking sector since 2008, and
(c) an assessment of risks to the banking sector in the future including the likelihood of further public support being required.’
This new clause requires an assessment of the banking surcharge in the context of the cost of public support to banks since the financial crisis and an assessment of the risk of the need for further public support in future.
New clause 3—Review of the impact of the extension of temporary increase in annual investment allowance—
‘The Chancellor of the Exchequer must, within three months of the end of tax year 2022-23, publish a review of decisions by companies to invest in the UK in 2022-23, which must report on which companies, broken down by size, sector, and country of ownership, have benefited from the annual investment allowance; and this assessment must also assess the merits of the existence of the superdeduction in light of the AIA.’
This new clause requires a review of which companies have benefited from the Annual Investment Allowance in 2022-23, broken down by size, sector, and country of ownership, and an assessment of the merits of the superdeduction in light of the AIA.
New clause 8—Review of changes to taxation of dividend income—
‘(1) The Chancellor of the Exchequer must, not later than six months after the passing of the Act, lay before the House of Commons a review of the fiscal and economic effects of the changes in the taxation of dividend income resulting from the provisions of section 4 of this Act.
(2) The review under subsection (1) must also include an assessment of the fiscal and economic effects of—
(a) removing the personal dividend taxation allowance, and
(b) amending the dividend income rates of taxation to match the existing rates of taxation of earnings.’
This new clause would require the Government to report to the House on the fiscal and economic effects of the changes made by clause 4 to the rates of taxation of dividend income, and also to assess the effects of other changes to the taxation of dividend income.
New clause 10—Assessment of annual investment allowance—
‘The Government must publish within 12 months of this Act coming into effect an assessment of—
(a) how much the changes to the annual investment allowance under section 12 of this Act will affect GDP in the event of the Finance Act coming into effect, and
(b) how the same changes would have affected GDP had the UK—
(i) remained in the European Union, and
(ii) left the European Union without a Future Trade and Investment Partnership.’
This new clause would require an assessment of the effects of the provisions in clause 12 on GDP in different scenarios.
New clause 11—Review of temporary increase in annual investment allowance—
‘The Government must publish within 12 months of this Act coming into effect an assessment of
(a) the size, number, and location of companies claiming the increased annual investment allowance,
(b) the impact of this relief upon levels of capital investment, and
(c) the percentage of total business investments that were covered by this relief in 2019, 2020 & 2021.’
This new clause would require an assessment of the take-up and impact of the temporary increase in the AIA.
New clause 16—Assessment of revenue effects of increases in the rates of tax on dividend income—
‘The Chancellor of the Exchequer must, no later than 31 January 2022, lay before the House of Commons an assessment of the effects on tax revenues of—
(a) the provision of section 4, and
(b) increasing the rates of tax on dividend income to the default rates of income tax.’
New clause 17—Review of impact of the abolition of basis periods—
‘(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, review the impact of the abolition of basis periods.
(2) The review must consider the effects of the abolition on—
(a) farmers and other seasonal businesses,
(b) sole traders, and
(c) partnerships.
(3) The review must consider the effects of the abolition in respect of—
(a) each region of England and England as a whole,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland.
(4) In this section, “region” 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 abolition of basis periods on particular sectors, including farming and other seasonal businesses, sole traders and partnerships.
The Financial Secretary to the Treasury (Lucy Frazer)
In the Budget, the Chancellor set out his vision for an economy that will allow the UK to succeed. This was a vision of a fair, simple and modern tax system that enables our businesses to be world leaders. The clauses we are considering today, along with other measures in this Bill, will help us to achieve these goals. For example, on fairness, these measures will make sure that everyone plays their part in helping to fund new investment in health and social care. That is because the Bill provides that, in addition to the new health and social care levy, we will ask for an equivalent contribution from those who earn income through dividends. This will spread the burden more equally across society.
On tax simplicity, these measures will support the smaller businesses that are at the heart of our economy through reforming basis periods. That change will make the tax system easier and fairer for these firms.
On competition, we have set the rate of the bank surcharge to ensure that the UK remains internationally competitive while making sure that banks continue to pay their fair share of tax.
Finally, these measures will help businesses create jobs and growth by extending an increase in the annual investment allowance on plant and machinery assets. This will encourage firms across the country to invest more and earlier. I will now turn to each of these clauses in depth.
I shall start with clause 4. This increases the rate of income tax that is applied to dividend income by 1.25%. The increase will be used to help fund the health and social care settlement announced in the spending review. By way of background, dividend tax is paid by people who receive dividend income from shares. That income is not subject to national insurance contributions or to the new health and social care levy. The increase in dividend tax rates will mean that those with dividend income will also contribute to the health and social care settlement, just like employees, the self-employed and businesses.
As well as supporting the Government to fund this critical area of public services, the measure will deter individuals from cutting their tax bills by incorporating as a company and remunerating themselves via dividends rather than as wages. That is something that the Office for Budget Responsibility has pointed out as a potential risk. However, it is important to point out that many everyday investors will be unaffected by this change. That is because shares held in ISAs are not subject to dividend tax. In addition, because of both the £2,000 tax-free dividend allowance and the personal allowance, around 60% of those with dividend income outside of ISAs are not expected to pay any dividend tax or be affected by this change next year.
The measures contained in clause 4 are also progressive. We have calculated that additional and higher-rate taxpayers are expected to contribute more than three quarters of the revenue raised by the measures next year. In short, this clause supports the Government to fund public services and tackle the challenges in social care, but in a fair and progressive way.
I shall now turn to the proposed new clauses, 1, 8 and 16. These all call on the Government to publish information on the changes to dividend tax rates set out in clause 4 as well as on alternative potential changes to the dividend tax system. The Government have already published an assessment of the fiscal and economic impacts of the 1.25% increase in tax rates on dividend income. The fiscal impacts were set out in the Budget document and the fiscal and economic impacts were both set out in the taxation information and impact notes for that measure. Both of these are available for the public to consider on gov.uk. It is not standard, however, for the Government to publish assessments of the fiscal and economic impacts of measures that they are not introducing and it is not clear in this case that doing so would be a beneficial use of public resources. I therefore recommend that the House rejects the new clauses.
I now turn to clause 6. Before turning to the bank surcharge itself, it is important to remember the overall context for this clause. From April 2023, corporation tax will rise from 19% to 25%. That increase, combined with a current banking surcharge rate of 8%, would have led to banks paying an effective rate of 33% on their profits. That is not competitive. Such a rate would have put us at a competitive disadvantage in relation to other major financial centres, such as the US, Germany and France. Clause 6 makes sure that banks pay their fair share of tax while remaining internationally competitive, protecting British job and tax receipts.
I know that the Opposition may like to bash banks, but it is important to remember that the banking sector accounts for almost half a million jobs across the country, and 65% of those jobs are outside London. Let us not forget that the sector contributes around £37 billion a year in tax revenue, ultimately paying for vital public services. The changes made in clause 6 will therefore support those jobs and protect that tax revenue while making sure, as I said, that banks pay their fair share. A surcharge rate of 3% will mean that banks pay an overall rate of 28% on their profits. That is, of course, more than the 27% that the banks now pay and above the 25% paid by most other businesses. In combination, the changes to corporation tax and the bank surcharge will result in banks paying an additional £750 million in tax over the period to 2026-27 based on current forecasts.
I should also point out that none of our global competitors charges an additional rate on banking profit. Clause 6 also increases the allowance above which banks pay the surcharge—from £25 million to £100 million. This new, increased allowance will support growth and competition for smaller, retail and challenger banks, benefiting consumers and businesses.
New clause 2 would require the Chancellor to publish an assessment of revenues from the bank surcharge since its introduction, of public expenditure on supporting the banking sector since 2008, and of future risks to the banking sector. The Government already publish figures on revenues raised from the bank levy introduced in 2011 and the banking surcharge introduced in 2016 in the Red Book at each Budget. On state support, as of 27 October this year the independent Office for Budget Responsibility estimated an implied balance, excluding financial costs, of £13.5 billion for the net direct effect from the public finances of financial sector interventions made as a result of the 2007-08 crisis. We must also remember that the costs of the financial crisis would almost certainly have been more significant in the absence of direct interventions.
James Murray (Ealing North) (Lab/Co-op)
The economy the British people need is one that works for all parts of the country, that meets the goal of net zero, and that improves people’s quality of life. To achieve that, we need strong economic growth, yet we have a Chancellor who is failing at this most fundamental of tasks. In the first decade of this century, Labour grew the economy by 2.3% a year. In the past decade to 2019, however, even before the pandemic, the Tories grew it by just 1.8% a year, and now the Office for Budget Responsibility has said that by the end of this Parliament the UK’s economic growth will have fallen to just 1.3% a year. If we had an economy that was growing strongly, we could create new jobs with better wages and conditions in every part of the country, but without that growth it gets ever harder to meet the challenges we face—and the truth is that low growth means that the Conservatives have had to put up taxes.
The tax burden in our country is set to reach its highest level in 70 years. Faced with the decision over which taxes to put up, where have the Tories chosen to let that tax burden fall? It is falling on the backs of working people who face a national insurance hike from this Chancellor at the same time as he cuts taxes for banks. In power, the Conservatives are showing themselves to be the party of low growth, high taxes, and the wrong choices for this country. The Tories are making the wrong choice by pressing ahead with clause 6, which cuts the rate of the banking surcharge and raises its allowance. That cut will see the corporation tax surcharge for banking charges slashed from 8% to 3%, with the allowance for the charge raised from £25 million to £100 million. It will cost the public finances £1 billion a year by the end of this Parliament.
We will oppose this clause and we have tabled new clause 2 to make sure that Members of this House do not forget why the banking surcharge was introduced in the first place. Let us not forget that following the financial crisis of the late 2000s, there was recognition that banks have an implicit state guarantee thanks to their central position in the UK economy. At the time, the Government seemed to realise that this guarantee should be underpinned by a greater tax contribution. Indeed, this has been a critical justification behind both the bank levy and the banking surcharge. The Government’s own policy paper published alongside the October Budget clearly stated:
“Since 2010, banks have been subject to sector-specific taxes. As a result they have made an additional contribution to public finances, reflecting the risks that they pose to the UK financial system and wider economy and recognising the costs arising from the financial crisis.”
Yet despite appearing to acknowledge the justification behind this surcharge, the Government are today pushing ahead with slashing it by nearly two thirds.
That is why our new clause 2 would require the Government to publish a review that considers the total revenue raised by the banking surcharge since its introduction, alongside the total public expenditure on supporting the banking sector since 2008, and an assessment of risks to the banking sector in the future, including the likelihood of further public support being required. I would welcome the Government’s support for such a review, but if it is not forthcoming, perhaps the Minister could explain why the need for banks to make an additional contribution to public finances is suddenly less now than it has been for the past decade. Without clear evidence from the Government, we can only go on what others say. Tax Justice UK has pointed out that
“it appears that the bank levy and bank surcharge will not even have fully repaid the public expenditure on the banking sector at the financial crisis; let alone provided any insurance against a future crash, before being cut”.
It is clear that cutting this tax on banks is the wrong choice at the wrong time. At a time when the Government are being forced to raise taxes, it tells us everything we need to know about the Conservatives’ instincts—that they have decided to cut taxes for banks while raising them for working people.
Elsewhere in the Bill, clause 4 also draws to our attention other choices the Government are making on taxes. Although the clause increases the rate of tax on dividend income, let us make no mistake over the context of this measure. When the Prime Minister set out the Government’s plans for their new health and social care levy in September, he was rightly criticised by Members in all parts of the House for funding it overwhelmingly through taxes on working people and their jobs. At the time, the Prime Minister tried to soften the blow by claiming that the Government’s tax plans were fair because the tax rise on working people would be accompanied by a tax rise on income from dividends. He said that a rise in dividend tax rates would mean the Government
“will be asking better-off business owners and investors to make a fair contribution too.”—[Official Report, 7 September 2021; Vol. 700, c. 154.]
The Prime Minister was desperate to give the impression that this tax rise is not falling overwhelmingly on working people and their jobs.
Now, I am sure the Prime Minister would never be loose with his language, nor the truth, but let us look at the facts. The reality is that the dividend tax rise in clause 4 would raise just 5% of the total revenue needed for the health and social care levy. The rest of that tax bill—95% of its total, or £11.4 billion a year—will land on working people and their jobs. The Government do not seem to have considered asking those receiving income from dividends to take a greater share of the burden, the impact of which our new clause 1 asks them to assess.
Richard Thomson (Gordon) (SNP)
It is a pleasure to speak in this section of our consideration of the Finance Bill. At the outset, may I just say that notwithstanding the valiant efforts of the Minister to try to persuade me otherwise, I will still be pressing amendments 5, 6 and 7 and new clauses 10 and 11 in my name and those of my colleagues?
Before I get to the nub of amendment 5, it is always important to place on record, when dealing with matters such as finance, that we are also dealing with a climate emergency. It is very important that we are using every single resource and every single incentive that we have at our disposal to encourage a move to net zero across the public sector and the private sector, and as quickly as possible.
Amendment 5 would restrict access to the extended temporary increase in the annual investment allowance to businesses that support a transition to net zero. To go back to a previous life, I was once the joint leader of Aberdeenshire Council. I think I am right in saying—I have no objection to being corrected by anyone in the Chamber, or anyone outside the Chamber who happens to be watching this—that we were the first local authority in the UK to introduce a carbon budget and to put it on an equal footing in governance with the capital budget, the revenue budget and the housing revenue allowance budget. It was therefore considered on exactly the same basis, and every single measure we were taking, whether in policy or budgetary terms, was worked through so that the carbon impact was understood and the emissions that resulted from activities were always on a downward trajectory.
That is exactly the sort of net zero philosophy that needs to be baked into the private sector. One way we could do that is by making qualifying for the allowance contingent on companies having taken steps to reduce carbon dioxide in their business model and how they go about their business, but we could also challenge companies on how they will build further on the progress they have made in reducing carbon dioxide. That seems to me a sensible measure and a proportionate approach, and I commend it to colleagues.
I will move on to amendment 6. I do not doubt the good intentions and best endeavours of the Government in trying to address tax evasion at any level, but it was nevertheless extraordinary to hear the Minister suggest that requiring companies to demonstrate their tax compliance would represent an onerous burden on them. This is pretty basic, baseline, default stuff. We should expect businesses to comply with the tax code and to pay their taxes in full and on time to the best of their abilities and not to try to avoid that. People want to see businesses and others succeed, but they also want to know that others are playing by the rules, and that is particularly the case for businesses. We want businesses to do well by competing and being the best that they can be, but we want to see them succeed on the basis of the quality and effectiveness of what they do, rather than by being incentivised perversely not to contribute to the common good and to undercut their more scrupulous competitors.
We often hear from the Government Dispatch Box that there is no such thing as tax revenues without businesses, but we miss the other side of the balance sheet and the other side of the equation: it is much, much harder for businesses to succeed without the high quality of the public goods that they consume, whether that is an educated population, a health service, investment in our infrastructure, the provision of a stable market, law and order and the emergency services—everything else that is fundamental to underpinning the activities of the society we live in. Fundamentally, tax cuts of this kind should be going to businesses that play by the rules and do not undercut their competitors by not playing by the rules. It is important to incentivise and reward that good behaviour, and that is precisely what amendment 6 would do.
We tabled amendment 7 to ensure that smaller businesses with lower levels of qualifying capital expenditure were not disadvantaged in any way by having their annual investment allowance limits restricted. Again, the amendment would ensure that we are playing fair for those who play by the rules.
Moving on to new clauses 10 and 11, it is very important that the measures we have in the Finance Bill or any legislation have the intended effects, that we can see whether they are having those intended effects and that we can quantify that and ensure, so far as is possible, that we are avoiding any adverse, unforeseen consequences. New clause 11 would insist that the Government publish within 12 months an assessment of the size, number and location of companies claiming the increased annual investment allowance; the impact of the reliefs on levels of capital investment, to see that we are getting the desired outcome from that reduction; and the scope of total business investments that are being covered by the relief, to see whether it is helping to drive investment and growth in the economy. That should be a fundamental set of baseline assessments that the Government should wish to undertake. New clause 11 would ensure that happens.
Moving on to new clause 10, and from unforeseen adverse circumstances to entirely foreseeable adverse circumstances, Brexit continues to be a millstone around the neck of businesses and families, and it is important that we understand the continued consequences and ramifications of choices that have either been made freely or, in the case of the area I represent and the people of Scotland, been forced upon us.
A programme I used to like watching on television on a Sunday afternoon was “Bullseye” with Jim Bowen. I do not know if anyone remembers that. His catchphrase at the end when the contestants did not do nearly as well as they had hoped—they had gone for that 101 with six darts and had sadly fallen short—was, “Let’s have a look at what you could have won.” New clause 10 is about having a look at what we could have won. It would ensure that the Government carry out an assessment of how the changes in the annual investment allowance would have affected our GDP had we remained in the European Union and had we left with that future trade and investment partnership in place.
Finally, I turn to clause 6 and the banking surcharge. My party was happy to support the increase in corporation tax generally, but people still bear the scars of the 2010 banking crisis. They believe that, in the spirit of fairness, the banks should make a fair contribution, not just to help businesses to grow and develop to make sure that the economy is growing and that they are making the best contribution they can, but to ensure that they are repaying some of the harm caused by the reckless approach to banking in the lead-up to the financial crash. Many people will look askance at the reduction in the surcharge, notwithstanding the increase in the corporation tax rate generally, and will feel that banks are not fulfilling their proper roles as prudent lenders or their social responsibilities but seem to be getting off the hook.
Christine Jardine (Edinburgh West) (LD)
I confirm that the Liberal Democrats will not be supporting the Bill and will be supporting the Opposition amendments. There are several specific reasons for that, which I have expressed previously, including that the Bill fails to address the cost of living crisis in this country and fails to adequately address the need to have and to shift to a greener, more sustainable economy. It also fails to address the concerns that the hon. Member for Gordon (Richard Thomson) expressed about the changes to the banking surcharge, which strike many people in the country as inappropriate at the moment.
I will focus on one issue that is dealt with by new clause 17, which has been tabled by my party. The Minister mentioned the innocuously titled basis pay rate and the basis period reform. One of the frustrating things about the Bill is that the more we look into the detail, the more we find to object to. Hidden in it are huge accounting changes that will make life much harder for tens of thousands of farming businesses, and other partnerships and sole traders around the country. Under the basis period reform, farmers will have to submit two tax returns instead of one, doubling their administrative burden.
Proud farming communities from Shetland to Shropshire are worried about the costs and burdens that will come with those changes. In Shropshire alone, there are more than 6,000 partners and directors in the sector who are likely to be affected by the reforms. Like many others from communities in the so-called blue wall, they find that the Government are taking them for granted and saddling them with administrative burdens and costs—and yet more promises that somehow seem to be ignored. They will force farmers to submit estimated tax returns when there is no good way of knowing the value of a crop yield when it is still in the ground.
We would like Ministers to put those plans on hold immediately and listen to farmers’ concerns. They should at least offer them an extended deadline, so that they do not have to estimate their profits but can submit just one final tax return. They should also explore the options laid out by the Office of Tax Simplification about changing the tax year to a 31 December end date. Farmers across the country have already seen their basic payments cut by at least 5% and could be facing even more costs. They deserve better. This is unfair and counterproductive, and it is yet another reason why people are disappointed with what they have heard about this Finance Bill.
Therefore, the Liberal Democrats will not vote to support the Bill, but we will support the Opposition amendments.
Richard Burgon (Leeds East) (Lab)
As always, it is a pleasure to serve under your chairship, Dame Eleanor. I wish to speak in support of new clause 16, which is in my name, and new clause 8, which has been tabled by my hon. Friend the Member for Hemsworth (Jon Trickett).
Both new clauses aim to tackle the gross injustice of taxes on share dividends being set at less than income tax rates. They are both part of a wider push for tax justice and wealth taxes—a push made ever more urgent by the growing inequality that we have seen throughout the pandemic. I also support the new clause on this issue from the Leader of the Opposition and the new clause on the banking surcharge. It is shameful that the Government are cutting taxes for banks while increasing the tax burden on working families.
Faced with a backlash over their plans to impose tax rises on working people, the Government made a very limited change, increasing the taxes on share dividends by 1.25%. That was done to try to give the impression that they were sharing the burden of the so-called health and care levy equally between ordinary working people and those lucky enough to live off their wealth. But that was just smoke and mirrors, done solely to deflect the media and distract the public, not to help to actually secure economic justice. That is obvious from the amounts that will be raised by the so-called health and social care levy. The national insurance increases will raise £11.4 billion a year, while the increases in tax on share dividends will raise just £600 million a year. We need to be clear about this: the Government’s change is woefully inadequate.
However, this can act as a watershed moment when we finally get to grips with the great injustice in our tax system that wealth is often taxed at much lower rates than income tax. It is clear, is it not, that our economy is rigged in the interests of the 1%? That has become even clearer during the pandemic, when we have seen the corrupt contracts that have been handed out or the fact that the billionaires have increased their wealth by £290 million a day while food bank use has hit record levels. How completely grotesque.
Our tax system is also rigged in the interests of the top 1%. One obvious way in which that happens is that those with wealth get special discounts on their tax rates. They pay lower tax rates than the vast majority, who have to go out to work day in, day out. My new clause seeks to put a stop to that racket, to that injustice. Why on earth is someone lucky enough to have inherited millions of pounds of shares and who now lives comfortably off their annual share dividends allowed to pay a lower rate of tax than people who have to go to work day in, day out? That is completely unfair and completely unjustifiable. It needs to change. Economic justice demands change, and my new clause would deliver that. It would raise tens of billions of pounds that could go towards funding a national care service, for example, in a progressive way by taxing wealth and not by hitting the pockets of working people.
Let us look at how this rigged system works in practice for those lucky enough to be in the top 1% of incomes. They currently have to pay a 45% rate of tax on income but pay way less on earnings from share dividends: just 38.1%. That tax discount applies even though payments to shareholders primarily go to a very wealthy minority. One quarter of the total income of the richest 1% is generated from dividends and partnership income alone.
The Government try to give the impression that we somehow live in some kind of shareholding democracy where everybody has an equal stake in owning shares, but I am afraid that that is just not true. TUC research shows that UK taxpayers earning over £150,000, which is just 1% of all taxpayers, captured about 22% of all direct income from UK dividends, so the wealthiest accumulate their money from share dividends instead of working, and the Government reward them for this with a tax discount. That is totally unjustifiable, totally unreasonable and totally indefensible.
The changes I have called for in new clause 16 would raise billions for the Treasury—billions that could go towards funding a national care service. Institute for Public Policy Research calculations in 2019 estimated that this would raise £29 billion over the lifetime of this Parliament, even after accounting for behavioural changes. But I am afraid the Conservative party does not want to tax the income of the super-rich who bankroll the party. This new clause has been tabled as an opportunity for the Government to really tackle the injustice in our taxation. It is absolutely outrageous and it needs to change, and that is why I put down this amendment.
Lucy Frazer
I will take the opportunity to respond to some of the points that have been made on the Bill, and I will start with those made by the hon. Member for Ealing North (James Murray). He started by suggesting that there was not a sufficient growth rate in the economy, but what the Budget documents show and the OBR has said is that there will be growth year on year for every year in the Budget forecasts.
The hon. Gentleman asked me to come back to him on cutting taxes for banks. I do not think he heard some of the points I made in my speech, because I did mention that the tax the banks are paying is not actually reducing, but increasing. I think he did not hear me say that they will be paying an additional £750 million in tax over the period to 2026-27, based on current forecasts.
The hon. Gentleman talked quite a lot about fairness—fairness to working people—and he suggested that the rise in the dividend payment was not fair. I do not accept that. What we have calculated is that the additional higher rate taxpayers are expected to contribute over three quarters of the revenue raised by this measure next year. It is interesting to note that the Resolution Foundation thought that this measure was indeed fair. It said that it welcomed the
“moves to address some of the fairness problems”
that came with choosing to focus on the tax increase on national insurance by raising dividend taxation.
The hon. Gentleman asked me a specific practical question on what support will be provided to traders who are affected by basis period reform, and I am very pleased to get back to him on that. I would like to reassure him that more than 80% of affected businesses are represented by a tax agent, but HMRC is currently exploring how best to help unrepresented taxpayers through basis period reform.
The hon. Member for Gordon (Richard Thomson) rightly talked about the importance of getting to net zero. He will know—he will have attended many debates in this House and I am sure he will have read our net zero strategy—about the emphasis the Government place on net zero. He talked about his work in Aberdeenshire, so I hope that he welcomes the investment we have made in that area in Scotland. We continue to deliver on important existing commitments in Scotland, including £27 million for the Aberdeen energy transition zone and £5 million for the global underwater hub, which will help support Scotland’s standing as a world leader in clean energy.
The hon. Gentleman also mentioned the important issue of playing by the rules, which Conservative Members think, as he does, is very important. I am sure he will be pleased to know that, since 2010, the Government have introduced over 150 new measures and invested over £2 billion extra in HMRC to tackle fraud.
The hon. Member for Edinburgh West (Christine Jardine) mentioned the cost of living. Obviously, many of the spending measures are in the spending review, rather than in the Finance Bill, so I hope she will not mind my mentioning some of our spending measures. The significant tax cut for people on universal credit, and the raising of the national living wage, are two measures that are really helping those on lower incomes.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
Government amendments 2 and 3.
Clause 28 stand part.
Clauses 53 to 66 stand part.
Clauses 84 to 90 stand part.
That schedule 12 be the Twelfth schedule to the Bill.
Clause 91 stand part.
That schedule 13 be the Thirteenth schedule to the Bill.
Clause 92 stand part.
New clause 5—Reviews of Economic Crime (Anti-Money Laundering) Levy—
‘(1) The Government must publish a review of the operation of the Economic Crime (Anti-Money Laundering) Levy by 31 December 2027.
(2) The Government must publish on 31 December each year until the establishment of a register of beneficial owners of overseas entities that own UK property—
(a) an assessment of the contribution to the effectiveness of the Levy that such a register would make; and
(b) an update on progress toward implementing such a register.’
This new clause will put into law the Government’s commitment to undertake a review of the Levy by the end of 2027, and require them to publish an assessment every year until a register of beneficial owners of overseas entities that own UK property is in place an assessment of what impact such a register would have on the effectiveness of the Levy, and progress toward the register being established.
New clause 7—Reporting on provisions relating to publication of information about tax avoidance schemes—
‘(1) The Chancellor of the Exchequer must, within three months of the passing of this Act, lay before the House of Commons and publish a review of the impact of measures contained within this Act that relate to the publication by HMRC of information about tax avoidance schemes.
(2) The review undertaken by the Chancellor under subsection (1) must include commissioning an independent assessment of the information published by HMRC about disguised remuneration loan schemes.
(3) The independent assessment under subsection (2) must include consideration of the following with respect to the purposes set out in section 85(1)(a) and (b) of this Act—
(a) HMRC’s approach to the loan charge scheme; and
(b) recommendations for altering that approach.
(4) The Government must before the review commences make a statement to the House of Commons stating what efforts have been taken to guarantee the independence of the assessment under subsection (2).
(5) The Government must within three months of the publication of the review under subsection (1) make a statement to the House of Commons stating which of any recommendations under subsection (3)(b) it will be accepting, and give reasons for any decision not to accept one or more of those recommendations.
(6) The Government must every six months after the publication of the review in subsection (1) make a statement to the House of Commons stating what progress has been made towards implementing any of the recommendations that arise from subsection (3)(b) which the Government has accepted.’
This new clause would require the Government to review the impact of measures contained in clause 85 of the Bill, and as part of that to commission an independent review of the information published by HMRC about disguised remuneration loan schemes. This independent assessment must consider HMRC’s approach to the loan charge scheme and consider recommendations for altering that approach, and the Government would be required to state to the House its response to the recommendations.
New clause 12—Assessment of Economic crime (anti-money laundering) levy—
‘The Government must publish within 12 months of the Act coming into effect an assessment of the impact of Part 3 of this Act (Economic crime (anti-money laundering) levy) on the tax gap and how it has affected opportunities for tax evasion, tax avoidance, and other economic crimes.’
This new clause would require an assessment of the impact of the Economic crime (anti-money laundering) levy on the tax gap and on opportunities for tax avoidance, evasion and other economic crimes.
New clause 13—Review of avoidance provisions of sections 84 to 92 on the tax gap—
‘The Government must publish within 12 months of the Act coming into effect an assessment of the provisions in sections 84 to 92 of this Act on the tax gap in the UK.’
This new clause would require an assessment of the impact of the provisions on tax avoidance in clauses 84 to 92 on the tax gap.
New clause 14—Review of provisions of section 85 and publication of information on overseas property ownership—
‘(1) The Government must publish within 12 months of this Act coming into effect an assessment of the impact of the provisions of section 85 about the publication by HMRC of information about tax avoidance schemes.
(2) This assessment must include consideration of the impact of the publication of a register of overseas property ownership upon the promotion of tax avoidance in the UK.’
This new clause would require an assessment of the impact of the provisions of clause 85, and consideration of the impact of publishing a register of overseas property ownership.
New clause 15—Review of Economic crime (anti-money laundering) levy rates—
‘(1) The Government must within six months of the Economic crime (anti-money laundering) levy coming into effect lay before the House of Commons an assessment of the effectiveness of rates of the levy in section 54(2) in achieving the levy’s objectives.
(2) The assessment under (1) must also make an assessment of how the effectiveness of the levy would be changed if each of the rates of the levy in section 54(2) were (a) doubled and (b) tripled.’
This new clause would require the Government to assess the effectiveness of the proposed levy rates and of levy rates twice and three times as high.
Lucy Frazer
This Government are committed to making the UK a hostile place for economic crime and illicit finance. In recent years, the Government have taken major steps to achieve this goal. For instance, our landmark 2019 economic crime plan set out 52 actions to be taken by both the public and private sectors to ensure that the UK is not exploited by such criminals. However, as we set out in our report on progress on the economic crime plan earlier this year, both the public sector and the private sector must contribute if we are to deliver these reforms. The Bill therefore introduces a new economic crime levy, which aims to raise around £100 million a year to help to fund additional action on money laundering. The revenue raised through the levy will supplement the Government’s investment, announced at this year’s spending review, of £18 million in 2022-23 and £12 million a year in 2023-24 and 2024-25 to tackle fraud and money laundering.
The Bill also introduces new powers and penalties to clamp down further on tax avoidance, tax evasion and other forms of non-compliance, building on the Government’s strong record in this area.
Dame Margaret Hodge (Barking) (Lab)
I find the Minister’s introduction quite extraordinary, given that money laundering, fraud and economic crime are on the rise even on the National Crime Agency’s own figures. Has she had regard to the revelations in, most recently, the Pandora papers or the FinCEN papers, where it is seen that Britain, more than any other jurisdiction, is at the heart of economic crime, fraud, corruption and money laundering?
Lucy Frazer
The right hon. Lady is very committed and has done a lot of work in this area, but I would point out that the Government have introduced a number of measures to tackle fraud. Since 2010, the Government have introduced more than 150 new measures and invested more than £2 billion extra in HMRC to tackle fraud, and that action has so far secured and protected more than £288 billion-worth of revenue. This is money that would otherwise have gone unpaid.
We recognise there is more to do. Although most promoters of tax avoidance schemes have been driven out of the market, we know a determined group remains. The Bill addresses that group by disrupting their business models, by providing taxpayers with more information on schemes and by targeting offshore promoters. The Bill also takes steps to combat electronic sales suppression and tobacco duty evasion, ensuring everybody pays their fair share.
This Government have a strong record of tackling both economic crime and non-compliance in the tax system, and the Bill builds on the steps we have already taken to protect UK security and prosperity.
Dame Margaret Hodge
There is a difference between the action taken on tax avoidance and the growth of economic crime, money laundering and all that goes with it, such as the funding of terrorism and drug smuggling. I have become far more concerned about that in recent years, because Britain has become the jurisdiction of choice. Although I accept that action has been taken and that HMRC officials are working hard to tackle tax avoidance, can the Minister really justify that the work is sufficient when big tech companies such as Amazon and Google get away with paying such minuscule amounts of tax on the profits they make in this jurisdiction?
Lucy Frazer
The right hon. Lady conflates a number of points. She knows that HMRC and the Serious Fraud Office play an important role in cracking down on crime. Work is ongoing, and the Bill does two things: it introduces the economic crime levy, which will bring in £100 million; and it tackles promoters who sell schemes. We have an economic crime plan that has a large number of measures that address this area in broader terms.
Clauses 53 to 66 introduce the new economic crime—anti-money laundering—levy. As I mentioned, the levy will aim to raise about £100 million per year. Funds raised will help to support action to combat illicit finance in the UK while providing the Government with greater scope to tackle emerging risks and improve enforcement across the economy.
The levy will take effect from April 2022, with the first payments collected in the financial year 2023-24. The levy will be paid as a fixed fee, based on a business’s UK revenue. It will be collected by one of three statutory anti-money laundering supervisors: HMRC, the Financial Conduct Authority or the Gambling Commission. We have ensured that it is those with big pockets that will pay the levy. Larger firms will be making this contribution. Small firms with an annual UK revenue of below £10.2 million will be exempt. Out of approximately 90,000 anti-money laundering regulated businesses, about 4,000 organisations will be in scope. It is expected that the levy fees will not be more than 0.1% of a business’s UK revenue.
On new clauses 5, 12 and 15, which would require the Government to review clauses 53 to 66, that includes evaluating whether the levy is operating effectively, its impact on the tax gap and its effectiveness in achieving its objectives under different levy rates. The Government have already agreed to conduct a wide-ranging review of the levy by the end of 2027 and to publish an annual report on the levy, which is expected to provide a breakdown of how the levy will operate in the forthcoming year, including the levy rates. The Government also already publish information year on year on the tax gap, including the parts of it that relate to avoidance and evasion, and these figures bear witness to the Government’s successes over time in driving down the amount of tax lost to avoidance and evasion. An additional review would not add value and I urge Members to reject these clauses.
Let me now turn to clauses that clamp down on promoters of tax avoidance, the first of which is clause 84. It allows HMRC to petition the courts to wind up a company or partnership that promotes tax avoidance schemes when it believes it would be in the public interest to do so. By removing those businesses, we will hamper promoters’ ability to sell dubious avoidance schemes, and we will provide vital protection to taxpayers and the tax system. This power uses Insolvency Act 1986 procedures and maintains all current safeguards, including the right to make representations during the court hearing and the right to apply to the court to rescind the winding-up order or to stay the winding-up process. This is a firm but proportionate approach.
Clause 85 allows HMRC to share information about promoters and the tax avoidance schemes they recommend, as well as those connected to them. The measure will allow HMRC to tackle promoters who tout these dubious schemes. Under this measure, HMRC will be able to publish promoters’ details on gov.uk and in other appropriate places. It will also be able to contact taxpayers and other interested parties directly. These steps will allow taxpayers to better understand the risks of tax avoidance schemes and to steer clear of them. I recognise that this is a significant change, but legitimate businesses and individuals have nothing to fear, and the legislation has been carefully designed with safeguards in mind. For instance, HMRC will be required to offer all those it intends to name a 30-day opportunity to make representations as to why they should not be mentioned.
Dame Margaret Hodge
I welcome these attempts to secure responsible behaviour on the part of promoters. Does the Minister agree on the issue of personal services companies, which are being used now in a way that Parliament never intended? We always wanted plumbers to set up new businesses, but we did not want MPs to use personal services companies to avoid tax. Does she agree that it would be appropriate for HMRC to bear down on the abuse of personal services companies? Will she be bringing forward further legislation to ensure certainly that MPs do not take advantage of what has become a tax avoidance scheme?
Lucy Frazer
Of course, HMRC has a duty to look into all tax matters. I wonder whether the right hon. Lady was present for the previous debate, in which we talked about why we are introducing the increased social care levy in respect of the payment of dividends. One of the reasons that I pointed out was to ensure that people did not take advantage of being paid by a company through dividends rather than paying income tax.
New clauses 7 and 14 seek to require the Chancellor to publish a review on the impact of clause 85. New clause 7 would require the commissioning of an independent assessment of the information published by HMRC about disguised remuneration loan schemes. Such a review would consider HMRC’s approach to what is referred to as the loan charge scheme and consider recommendations for altering that approach. Under the new clause, the Government would be required to state to the House their response to the recommendations.
The Government already regularly review and report on their progress in tackling disguised remuneration, including on action taken against those who promote tax avoidance schemes. For example, only yesterday, HMRC published its annual report on the use of marketed tax avoidance schemes and earlier this month it published its annual report and accounts. The information is therefore already in the public domain and will be updated in future. The Government introduced the loan charge to tackle the use of disguised remuneration schemes and it has already been the subject of an independent review that concluded less than two years ago. The Government accepted all but one of that review’s 20 recommendations. A further review is therefore unnecessary and I urge Members to reject the new clause.
New clause 14 states that any assessment
“must include consideration of the impact of the publication of a register of overseas property ownership upon the promotion of tax avoidance”.
The Government continue to make progress on work to set up a public register of beneficial owners of overseas entities that own UK property. That will enable us to combat money laundering and achieve greater transparency in the UK property market. The Government remain committed to those reforms, so the new clause is unnecessary and I urge Members to reject it.
Clause 86 allows HMRC to seek a court freezing order to freeze a tax avoidance scheme promoter’s assets. This would happen when HMRC has applied or is about to apply to a tribunal in England and Wales to charge a penalty. The measure will make sure that promoters face the financial consequences of their actions.
Clause 87 mirrors for Scotland the provisions in clause 86, clause 88 does the same for Northern Ireland, and clause 89 provides for some definitions and interpretations. The clauses I have outlined target the most persistent promoters, who repeatedly go to extreme lengths to sidestep the rules and frustrate HMRC’s efforts to tackle their behaviour.
Clause 90 introduces a new penalty that is chargeable on UK-based entities that facilitate tax avoidance schemes that involve offshore promoters. It aims to deter the enabling of such schemes by UK entities by imposing a penalty of up to 100% of the total fees earned by all those involved. This significant penalty reflects the seriousness of such behaviour.
Clauses 27 and 28 relate to the diverted profits tax, which was introduced in 2015 to target large multinationals that try to avoid tax by redirecting their profits away from the UK. The tax has been hugely successful in its main aim of changing corporate behaviour; in fact, it has helped to secure £6 billion in extra taxes to fund our public services.
Clause 27 will ensure that the UK can meet its tax-treaty obligations by allowing HMRC to implement a mutual agreement procedure decision to alter a diverted profits tax charge, should that situation arise.
Clause 28 introduces technical amendments to ensure that the diverted profits tax legislation operates as intended. First, it will ensure that HMRC cannot issue a corporation tax closure notice until after the diverted profits tax review period has ended. This means that the taxpayer must resolve their profit diversion before a diverted profits tax charge can be displaced. Government amendments 2 and 3 ensure that the clause applies as intended to those diverted profit tax cases where a foreign company has structured its UK activities to avoid them meeting the definition of a permanent establishment. This is in line with the Budget announcement. Secondly, this clause will extend the period in which a taxpayer can amend their own company tax return to obtain relief from diverted profit tax.
James Murray
I rise to speak in support of the new clauses in my name and those of the Leader of the Opposition and the shadow Chancellor.
Key principles of our tax system are that everyone should pay their fair share and that, in turn, the Government should treat everyone fairly. On the first of those two principles, the fact that large multinationals avoid paying their fair share of tax in the UK is one that rightly angers people across the country. This behaviour means that the UK misses out on vital revenue that could support our public services and it leaves British businesses that play fair at a disadvantage.
As the Minister will know, we were very disappointed that the Government recently allowed the global minimum corporate tax rate, which seeks to limit profit shifting and tax avoidance, to fall from the initial 21% proposed by President Biden to just 15%, but this is still progress. Before I turn directly to clauses 27 and 28, which relate to profit shifting, I ask the Minister to briefly confirm when she next speaks exactly what the timetable is for the Government putting the global minimum rate into UK law.
Clauses 27 and 28 amend the operation of the diverted profits tax, which was introduced in 2015 to try to limit multinationals from entering into profit-shifting arrangements through which they could avoid paying tax. As we have heard, clause 27 amends UK law on double tax treaties to allow mutual agreements between the UK and the other relevant tax state to take effect in relation to the diverted profits tax. Clause 28 is also technical, although it raises an important question about this Government’s willingness to hold companies to account for tax fraud. I would like to press the Minister on that point. TaxWatch has highlighted that HMRC’s annual accounts, published in November, show that HMRC is currently carrying out 100 investigations into multinational companies that may be diverting profits away from the UK, and HMRC’s statements clearly imply that a number of these investigations relate to fraudulent conduct.
In 2019, HMRC introduced a new profit diversion compliance facility, which allows multinationals to come forward and pay the taxes that they should have paid, plus any penalties, without having to pay the diverted profits tax. The changes in clause 28 appear to facilitate the settlement of disputes without diverted profits tax being charged, by extending the time period for which a company can amend previous tax returns in order to get out of having to pay it. Will the Minister confirm whether any company that is currently under investigation for fraudulent conduct involving diverting profits away from the UK may have the investigation of their fraudulent conduct dropped if they make use of the profit diversion compliance facility? It is an important question about how robust the Government’s approach to tax avoidance really is. As TaxWatch has put it,
“the Profit Diversion Compliance Facility should not become an amnesty for tax fraud.”
More widely, it is critical that the Government take more action on economic crime. We therefore support the principle behind the levy introduced by clauses 53 to 66, and hope that the funding from the levy will go some way towards increasing much needed capacity for the Government to tackle economic crime. We question, however, whether it will be enough, so our new clause 5 would require the effectiveness of the levy to be reviewed. This concern is evidently shared across the House, as new clause 15 in the name of my right hon. Friend the Member for Barking (Dame Margaret Hodge) and some Government Members would require the Government to assess the effectiveness of the proposed levy rates, and of levy rates twice and three times as high.
We also question why the Government are failing to make critical changes to the law that everyone agrees would strengthen the UK’s ability to fight economic crime. At the top of the list must be finally putting in place a public register of the beneficial owners of overseas entities that own UK property, to which our new clause 5 refers. A new public register would bring much needed and much delayed transparency to the overseas ownership of UK property, and help to stop the use of UK property for money laundering.
Plans to introduce a register were first announced by the Conservatives in 2016. Legislation was first published in 2018. We were promised that it would be operational by 2021, yet with just one month of this year left to go, this has become another broken promise from the Conservatives. It is very hard to conclude anything other than that the Government are, under the leadership of the current Prime Minister, deliberately abandoning their commitment to the register. We need only look at the language in the annual written statements on progress toward its introduction to see a clear pattern emerge.
In May 2019—two months before the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) became Prime Minister—a ministerial update on the register reported:
“Over the past year, significant progress has been made towards the introduction of the register... the Government intends that the register will be operational in 2021”.
Yet a year after the current Prime Minister took office, the next ministerial update, in July 2020, took a different tone, saying rather more cautiously:
“This register will be novel, and careful consideration is needed before any measures are adopted”.
By November 2021, the latest ministerial update simply said:
“The overseas entities register is one of a number of proposed corporate transparency reforms... The Government intend to introduce legislation to Parliament as soon as parliamentary time allows.”
Those statements do not sound like a toughening of resolve.
What is more, the ministerial statements themselves have only been published because the Government have been required, by section 50 of the Sanctions and Anti-Money Laundering Act 2018, to publish three reports on progress toward the register—one in each of the years 2019, 2020 and 2021. That is why our new clause 5 would require the Government to continue publishing annual updates on 31 December each year on progress towards implementing the register. We are determined not to allow the Prime Minister to let this commitment slip out of sight.
As I said on Second Reading, it is astonishing that the Government feel that the need for this register is becoming less urgent. The Pandora papers confirmed how overseas shell companies secretly buy up luxury property in the UK and how much transparency is needed to help to tackle money laundering. Ministers did not respond to my questions on Second Reading, but I did receive a letter from the Exchequer Secretary yesterday, where she wrote:
“While these measures have full Treasury support, they are not Treasury led.”
It is quite astonishing that Treasury Ministers are now trying to blame their colleagues in the Department for Business, Energy and Industrial Strategy for the delay in bringing in the register, when every indication is that the lack of determination comes directly from the Prime Minister. The truth is that concerns over Russian donations to the Conservative party and the use of high-end property in the UK for Russian money laundering mean that putting in place the register of overseas owners without delay is a key part of restoring the trust in politics that Conservative MPs and the Prime Minister have done so much to erode.
Clauses 84 to 92 and schedules 12 and 13 relate to tax avoidance. Our new clause 7 requires an independent assessment of HMRC’s approach to the loan charge scheme and recommendations for altering that approach. In my opening remarks on the previous group of amendments, I said that a key principle of our tax system was that the Government should treat everyone fairly. We fear that with their approach to the loan charge the Government are sorely failing in that duty. The Government’s approach to the loan charge means that ordinary people who are victims of mis-selling are facing huge bills that are causing untold distress and personal harm. It was truly shocking to read reports only last week of eight cases of suicide among those facing demands for payments. A new approach to the loan charge is urgently needed.
That is why our new clause would require the Chancellor to commission an independent review to consider HMRC’s approach to the loan charge scheme and make recommendations on how it should be altered. This new review must finally offer a truly independent assessment, which is why we would require the Government to make a statement to the House of Commons on what efforts have been taken to guarantee its independence. Once recommendations have been made, we would then require the Government to explain which of them they will accept, and why, and to report on progress towards implementing them every six months.
It is clear that something is very wrong with the Government’s approach on the loan charge scheme and that efforts until now to find a solution have fallen far short. Our proposal would finally offer a way forward. I urge Members on both sides of the Committee to support our new clause on this matter when it comes to a vote. I also urge them to support our new clause to make sure that the register of the beneficial owners of overseas entities that own UK property does not get forgotten. We have already seen that the promise to have this register operational by this year has been broken. We must now ensure that the Government do not allow it to disappear altogether.
Alison Thewliss (Glasgow Central) (SNP)
On 10 November, the Prime Minister said that the UK is
“not remotely a corrupt country”.
One can believe or disbelieve things that the Prime Minister says, but it is clear from the Bill that the UK is certainly not a transparent country when it comes to taxes. Efforts in the Bill to tackle economic crime are of course welcome, but, as ever, this Government are not going far enough to do so. The Minister mentioned the economic crime plan. On Monday, we had the Minister for Security and Borders at the Treasury Committee, where he set out that 34 of the 52 actions have been completed, while the rest are in progress and a few of them appear to be some way from being completed. It worries me that priority is not being given to these actions.
Clauses 53 to 66 provide for the Economic Crime (Anti-Money Laundering) Levy, which the Government estimate will raise approximately £100 million per year to help to fund anti-money laundering and economic crime reforms. SNP Members are concerned that this part of the Bill is not well targeted and could potentially act as an additional tax on businesses that are not breaking the rules. For example, the Association of British Insurers is concerned that insurers will be disproportionately hit, because they present very little risk to the Treasury of tax avoidance and money laundering. The Chartered Institute of Taxation has expressed concern that smaller tax adviser firms may be driven from the market because of the increasing costs and reducing choices for consumers. It has also said that the measure could increase the tax gap by incentivising de-professionalisation. If it becomes too costly for firms to meet compliance, they may just choose to de-register from professional bodies altogether. De-professionalisation can result in less ethical behaviour and increased costs of supervision by HMRC, neither of which is particularly in keeping with the aims of this legislation. I understand that more than 32,000 firms are already supervised directly by HMRC, and the staffing to cover that does not nearly match the size of the job.
Dame Margaret Hodge
I will speak to new clause 15, which stands in my name and those of right hon. and hon. Members from across the House, and I rise in support of new clause 5, which was moved so eloquently by my hon. Friend the Member for Ealing North (James Murray). New clause 15 is complementary to the first part of new clause 5.
I shall start by making a general observation. It seemed to me, when the Minister spoke, that either she does not completely understand what is going on in the world of economic crime, particularly in relation to the UK’s position on that; or there is a deliberate attempt by the Government to downplay it so that they do not take the very necessary action that is available and, as SNP Members and the Labour Front Benchers said, is probably as oven-ready as any legislation that we have. The Government are simply choosing not to implement it.
I will give an example of how the impact of economic crime is filtering and seeping into our politics. There are two Russian kleptocrats, Viktor Fedotov and Alexander Temerko—both of whom have questionable backgrounds and whose money has questionable origins—who are involved in a company called Aquind, which is trying to build an energy cable from Portsmouth to France. It is a controversial proposal. As for the origins of the money that they are using to fund this project, for me, it is money that has probably been stolen from the Russian people. That is really where that money comes from.
What is particularly disturbing is that when we look at the accounts of Aquind, the company, and the donations being given by one of the individuals, Alexander Temerko —the other one hides himself—to Conservative parties and to Conservative Members of this House, we see that it is enormous. There is a bit of time this afternoon so I am going to take the liberty of reading through the list. The right hon. Member for South West Surrey (Jeremy Hunt) has received money on a number of occasions from Aquind. The right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) has received money from Aquind of Russian origin. The hon. Member—
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
Order. I will just check that the right hon. Lady has informed other Members that she was going to mention them.
Dame Margaret Hodge
Thank you, Dame Rosie; I have not, because I did not realise that there would be so few people in the House this afternoon that I would have the opportunity to do so.
What I can say is that 24 Members of Parliament—all of them Conservative Members, many of them Front-Bench Members, some of them with ministerial positions—have received money from Aquind or from Alexander Temerko. I can also tell the House that further parties have received such money and that some former MPs and local parties have received money. I hope that is in order, and thank you for correcting me, Dame Rosie. The impact of economic crime and economic activity on our politics is a worrying trend that has been growing exponentially over recent years.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I am listening with rapt attention to my right hon. Friend’s remarks. Does she not think it strange that there is a Member of the House of Lords with very close connections to Russia—indeed, he is a Lord of Hampton and of Siberia—but we never hear from him and he is never seen? Whatever the story is of great interest in Russia, he is never on the media in this country.
Dame Margaret Hodge
My hon. Friend makes a really important point.
I think, having taken guidance from you, Dame Rosie, that I am at liberty to mention the political parties. Am I correct?
The First Deputy Chairman
The right hon. Lady can mention former Members and the location of political parties. What she cannot do without having informed them previously—it would be very discourteous—is to refer to existing Members of the House.
Dame Margaret Hodge
I am very grateful for the advice you have given me, Dame Rosie. I apologise, and I will write to the Members I had mentioned before you drew that to my attention.
If I can mention the political parties, they are those in Reading West, The Wrekin, Staffordshire Moorlands, Morecambe and Lunesdale, North Somerset, Great Yarmouth, Selby and Ainsty, Northampton North, Colchester, Daventry, Corby, Vale of Clwyd, Berwick-upon-Tweed, Richmond (Yorks) and North Swindon. If I can mention the former MPs, and these are quite important, there is one in particular—the former MP for Stockton South, James Wharton, who was of course very involved in the campaign—
The First Deputy Chairman
Order. I have a little further clarification. If any of those Members are in the House of Lords, it is not in order to refer to them. I know it is quite complicated, but it is best to get it right.
Dame Margaret Hodge
Well, I will also write to that individual, having transgressed. I apologise for that, Dame Rosie. I think I am okay on the other two: one is Guto Bebb, the former MP for Aberconwy, and the other is Mark Field, the former Member for Cities of London and Westminster.
I read out that list partly because we have the time to do so, but also to demonstrate how absolutely critical it is, I say to the Minister, that we start tackling economic crime seriously in this country. If we do not, we are in danger of allowing this to seep into our politics and seep into the public domain, and far from being a trusted jurisdiction, we will become a jurisdiction that is not very different from others to which we all too often preach that they should tackle the corruption endemic in their Administrations—we will become one of them.
Just to put that further into context, we are now the jurisdiction of choice for far too many kleptocrats, far too many criminals, far too many people who avoid tax and far too many people who launder money. Money laundering in itself is an activity that leads to the funding of terrorism, drug smuggling and all sorts of other crimes that we and the Government ought to want to bear down on in a very firm way, but we are just not doing so. The National Crime Agency has a figure of £100 billion that it thinks is laundered into the UK each year, but I think that is a very conservative estimate. It is probably plucked out of thin air a little bit, and I think the real or true figure is probably much greater. We only have to look at Moody’s credit rating, on which we have gone down a notch. One of the reasons for that happening is that it has argued there has been a
“weakening in the UK’s institutions and governance”.
To come back to my new clause 15, it is partly about our enforcement agencies, but it is also about the way in which all Government agencies tackle economic crime here.
The evidence of the toothlessness and the timidity of our enforcement agencies is overwhelming. In part, that is because of the regulatory framework in which they have to operate. As I have said time and again from these Benches, that deregulation started under the Conservatives and was continued by the Labour Government. Both parties take responsibility for that deregulation, and it is now time to revisit the issue and toughen up the regulations, so that we have an appropriate regulatory framework that can tackle not just tax avoidance and evasion, but the growth of the economic crime that is so insidious.
There is also pathetic enforcement by all our agencies. In part that is due to a lack of money, but I also believe that a lack of political will lies at the heart of it. We have only to look at the United States, ironically, which has a strong and clear resolve that it will pursue those guilty of financial crime and fine them heavily. Let me provide two examples of that. In 2019, the USA pursued and secured 25 penalties, which gave a total of $2.29 billion in revenue secured back to the public purse. In the UK, in the same year, we pursued and secured only 12 penalties, totalling £338 million.
Let me take one example of a British bank, Standard Chartered. In 2019, it was fined in both the USA and the UK, not only for its poor anti-money laundering controls, but for breaking sanctions in relation to Iran. Here in the UK, the Financial Conduct Authority fined it a total of £102 million. In the USA—this is a British-based bank, not an American bank—it was fined £842 million. There is just a different approach between the USA and the UK in pursuing those who are guilty of economic crime and should be paying back to the public purse. Our role in money laundering and economic crime is growing. It is not just economic crime here in the UK; it is economic crime facilitated by the UK because of our regulatory framework.
The hon. Member for Glasgow Central (Alison Thewliss) spoke about Companies House, which is a vital ingredient in the leaks of all the documents we get. Someone can pay £12 to form a company in the UK. Endless people from all over the world use UK formation to form shell companies, which they then use to create complex financial structures that will facilitate money laundering and economic crime. We have seen that in a regular flow of leaked documents, and I will talk about two. The Financial Crimes Enforcement Network files came out in 2020, showing that $2 trillion was moved by global banks in just under 20 years between 1999 and 2017. That movement gave rise to suspicious activity reports, which banks have to provide to the American authorities when they have a red flag about a transaction. More UK companies were cited in that tranche of leaks than companies from any other country, showing the concentration of economic crime in the UK. Indeed, 3,267 of the companies cited were UK shell companies.
Formation agencies are one of the things that we do not regulate properly. We do not enforce the legislation strongly enough, and four formation agencies had created more than half of those UK shell companies. The sort of thing that happens is that a limited liability partnership is established and registered at the Belgian address of a dentist. A young worker in north London was paid £800 a month for his flat’s address to be used for the registration of companies, and when he gave up doing that, the same address was used by a cleaner who worked in Leicester. Underlying that is one example when J. P. Morgan allowed a company to move more than £1 billion through a London account. It later emerged that that company was probably owned by a mobster on the FBI’s “Ten Most Wanted” list. That is the sort of facilitation of economic crime that we allow to happen.
I do not want to take too much of the House’s time, but I turn to the Pandora papers, the largest cache of documents we have ever received. Again, the UK lies at the heart of everything that was revealed in those papers. Others have talked about the secret property transactions that have taken place, with £4 billion identified in the Pandora papers. There are more UK citizens than citizens of any other country cited in that tranche of leaks. The relationship between the UK and our tax havens is central to the facilitation of economic crime, and again we see the weak and toothless enforcement agencies.
That brings me to our new clause 15. The evidence for the need for well-resourced and determined enforcement is overwhelming, but the money to be raised by the levy is woefully inadequate. As the Minister said, it will be £100 million. I had a meeting recently with personnel from major banks who are responsible for implementing anti-money laundering provisions. They said that they—the regulated financial sector—spend £49.5 billion on financial crime compliance. That gives us an idea of how little our £100 million raised from the levy is.
We must act within the constraints of the Bill in tabling new clauses, but we think £100 million is a pittance. Far more should be raised—it should be doubled or tripled—and I think that case would be made if a review were undertaken. If the Minister is confident that she is right—if she is confident about everything she said in her opening remarks—she will not shy away from a review that could then be considered in the House. I often think that Ministers should think about propositions that are tabled; they should not just reject them because they are not their ideas, but should really consider whether they are worthwhile on their own grounds. In this case, I urge the Minister, if she is really committed to tackling economic crime, money laundering and the rest, to do something.
I suppose the only thing I would say about the new levy, while I welcome it, is that for the first time ever we see the Treasury agreeing that there should be a hypothecation of tax to spend on a particular issue. I always thought it was Treasury orthodoxy that there should be no hypothecation. In this case, we have broken that orthodoxy; the money is going to be spent on fighting money laundering. I welcome that change. I hope to see it in other areas where a hypothecated tax could do a lot to create a fairer society.
I also think that the bands are unfair. Why should a company with a revenue of £10 million pay £10,000, while a company with a revenue of £1 billion pays only £250,000? We need a more progressive system that reflects the revenue that these companies get.
Simply increasing the levy is not enough; there have to be other measures. We need to put a cap on the potential costs of litigation that the enforcement agencies will engage in. All too often, the potential cost to an agency stops it taking action that would bear down on economic crime. We have seen that with unexplained wealth orders, where the agencies started off with a great burst of energy, and then when they lost one case and got a huge bill, they stopped doing anything. We could do away with the entitlement to secure costs, except in cases where there is no reasonable justification to prosecute. I think we could provide a financial incentive to the enforcement agencies to litigate by saying that any money that they raised through action could come back to them to be used.
All that could be reviewed, and the level of the levy could be increased. I would be really heartened if, just for a change, Ministers listened to the strength of the argument and accepted new clause 15, with its cross-party support. Then, hopefully, we could come back and see who is right and who is wrong.
Lucy Frazer
I will take a few moments to respond to some of the points raised in the debate on this group, starting with those made by the hon. Member for Ealing North (James Murray). I am very grateful for his welcome of the economic crime levy. He asked for a review, but, as I mentioned, we have already committed to a review. A review will take place by the end of 2027.
Lucy Frazer
I am not going to give way because I want to make a number of points and the hon. Member has had an opportunity to put forward his points.
The hon. Gentleman also mentioned the loan charge and asked for a review. He will have heard in my speech and will know that we had a review less than two years ago. I know that this is an issue that concerns many Members. We did legislate as a result of that. We legislated on 3 December 2020. As a result of the review, 30,000 individuals benefited. In fact, 11,000 were removed from the loan charge.[Official Report, 6 December 2021, Vol. 705, c. 2MC.]
Lucy Frazer
I am going to move on to another point raised by the hon. Member for Ealing North (James Murray), in relation to the timetable for the OECD reforms. He asked when the Government would implement those reforms. The Government are following the OECD’s implementation. The implementation date for the two-pillar solution is 2023.
Lucy Frazer
The hon. Member for Ealing North also asked me about the changes in relation to clause 28 and whether they would facilitate firms getting out of their fraudulent activities and investigation. I would like to give him an assurance that no company fraudulently diverting profits from the UK would have an inquiry dropped as a part of this measure. The only way in which a valid diverted profits tax charge can be displaced is if the company accepts a corresponding corporation tax charge within the diverted profits tax review, and that is the measure in the Bill.
Lucy Frazer
I would like to turn to the points made by the hon. Member for Glasgow Central (Alison Thewliss) on transparency and the tax gap. I pointed out, and I hope she is aware, that each year we publish measures in relation to the tax gap. She talked about reforming Companies House. I know she will be aware that the Treasury has provided £63 million in funding for reforms to Companies House. She is interested in Scottish limited partnerships and we had a brief discussion about that. I hope she is aware that since October 2020, Companies House has brought forward 28 prosecutions in relation to Scottish limited partnerships and persons of significant control offences.
I want to turn to some of the comments made by the right hon. Member for Barking (Dame Margaret Hodge). I would like to start by commending her for the work she has done. This is an area in which she is significantly interested and she has done a great deal of work through the all-party parliamentary group on anti-corruption and responsible tax. However, I strongly object to her suggestion that the Government are not committed to tackling economic crime. They absolutely are. It is for that reason that they set out 52 measures in the economic crime plan in 2019. I also take issue with her implicit suggestion, which was highly inappropriate, that there was a link between the Government’s actions on economic crime and donations made to a number of Members. I did not think that that was a wholly appropriate link to make in this House. In my six years in Parliament, I have found that colleagues across the House are committed to their work in public service.
David Linden
Will the Minister give way on that point so that I can provide a public service to my constituent?
David Linden
I am very grateful indeed; the Minister is incredibly kind and generous. May I take her back to a point that she made to the hon. Member for Ealing North (James Murray) about the loan charge? My Gartloch constituent, Michael Milne, has been in touch with me regularly about the issue. Will she commit at the Dispatch Box to personally taking a look at his case? He has expressed enormous concern to me about the impact that the loan charge is having on him. Will she give me that commitment from the Dispatch Box, please?
Lucy Frazer
I understand why the hon. Gentleman presses the matter, because there is obviously an issue that relates to his constituent. If the hon. Gentleman writes to me about those points, I will be very happy to take a look and pass over anything appropriate for HMRC to look at.
Let me go back to the points that the right hon. Member for Barking made. She was suggesting that our law enforcement is not sufficient. Of course there is always more we can do, of course people who want to do wrong work very hard at it, and of course we need to keep up with them—the Government are committed to doing so—but I point her to two figures. First, the Financial Conduct Authority has issued fines totalling £336 million since 2018, which does not suggest inactivity. Secondly, before I took on my Treasury role I was very proud to be a Law Officer overseeing and superintending the Serious Fraud Office, so I know how hard the SFO works to tackle fraud and crime. Since 2014, through deferred prosecution agreements, it has delivered £1.6 billion to the public purse.
The Bill will put on the statute book a number of measures to protect our economy from disruption and tackle economic crime. I hope that those hon. Members who have spoken so vociferously in favour of such action will support those measures in our Bill.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Diverted Profits Tax: Closure Notices Etc
Amendments made: 2, in page 22, line 40, leave out from “to” to end of line 41 and insert “a relevant enquiry”.
See the explanatory statement for Amendment 3.
Amendment 3, in page 23, line 5, at end insert—
“(3A) In subsection (2), ‘relevant inquiry’ means—
(a) an enquiry into the company tax return for the accounting period mentioned in subsection (1)(a);
(b) where the charging notice mentioned in subsection (1)(a) is issued to a company (‘the foreign company’) for an accounting period by reason of section 86 applying in relation to it for that accounting period, an enquiry into any company tax return for the avoided PE (within the meaning of section 86) that may be amended by virtue of section 101B(2) so as to reduce the taxable diverted profits arising to the foreign company in that accounting period.”—(Lucy Frazer.)
This amendment (together with Amendment 2) is to prevent the issuance, during a diverted profits tax review period of a foreign company, of a closure notice in respect of a company tax return of an entity carrying on trading activity in the UK where that return is capable of being amended to bring into account amounts that would otherwise be taxable diverted profits of the foreign company.
Clause 28, as amended, ordered to stand part of the Bill.
Clauses 53 to 66 ordered to stand part of the Bill.
Clauses 84 to 90 ordered to stand part of the Bill.
Schedule 12 agreed to.
Clause 91 ordered to stand part of the Bill.
Schedule 13 agreed to.
Clause 92 ordered to stand part of the Bill.
New Clause 5
Reviews of Economic Crime (Anti-money Laundering) Levy
‘(1) The Government must publish a review of the operation of the Economic Crime (Anti-Money Laundering) Levy by 31 December 2027.
(2) The Government must publish on 31 December each year until the establishment of a register of beneficial owners of overseas entities that own UK property—
(a) an assessment of the contribution to the effectiveness of the Levy that such a register would make; and
(b) an update on progress toward implementing such a register.’—(James Murray.)
This new clause will put into law the Government’s commitment to undertake a review of the Levy by the end of 2027, and require them to publish an assessment every year until a register of beneficial owners of overseas entities that own UK property is in place an assessment of what impact such a register would have on the effectiveness of the Levy, and progress toward the register being established.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
Clauses 69 to 71 stand part.
Clause 93 stand part.
That schedule 14 be the Fourteenth schedule to the Bill.
Lucy Frazer
VAT is our third-biggest tax. It raised £130 billion in 2019-20, making a major contribution to the public finances. It helps to pay for our schools, hospitals and police throughout the UK.
Now that we have left the EU, we are free to set our own VAT rules and are already using that freedom to create a fairer, more robust tax system. We have altered how VAT is paid on low-value consignments from overseas suppliers. We have also implemented changes to passengers’ policy and introduced a zero rate on women’s sanitary products. On top of all that, we are reviewing the UK funds regime, including the VAT treatment of fund management fees. We are establishing an industry working group to review how financial services are treated for VAT purposes. As I have illustrated, this Government are focused on using our new freedoms to create a VAT system that is ready for the future, and the measures in the Bill build on that work.
Some clauses being discussed today will be of most relevance to businesses and consumers in Northern Ireland. The UK has implemented the Northern Ireland protocol in a way that seeks to protect the UK internal market. Today’s clauses play a part in achieving that objective by allowing Northern Ireland businesses and consumers to have the same economic opportunities as those in the rest of the UK.
Finally, as Members will be aware, freeports are an important part of the Government’s levelling-up agenda. We see them as central to our goal of sparking regeneration, creating jobs and inspiring innovation throughout the country. One of the clauses that we are debating today supports the delivery of their VAT benefits.
Let me turn to the clauses themselves. The second-hand car sector in Northern Ireland relies heavily on sourcing vehicles in Great Britain for resale in Northern Ireland. Clauses 68 to 70 will together ensure that second-hand car dealers in Northern Ireland can continue to sell cars and other motor vehicles sourced in Great Britain and the Isle of Man on an equal footing with their counterparts in the rest of the UK.
Under the Northern Ireland protocol, the VAT second-hand margin scheme is not available for goods in Northern Ireland if they were purchased in Great Britain or the Isle of Man. This means that motor vehicle dealers in Northern Ireland must account for VAT in full on sales of these vehicles rather than on the profit margin. That would disrupt the UK’s internal market, potentially increase prices for consumers or costs for businesses and risk undermining the trade in motor vehicles in Northern Ireland altogether. It is only right that the Northern Ireland used car industry has the same economic opportunities as that of the rest of the country. That is why the Government are actively discussing arrangements with the EU to enable the margin scheme to continue in Northern Ireland for cars sourced from Great Britain.
Clause 68 provides the legislative basis for an interim arrangement that allows dealers in Northern Ireland to continue to use the VAT second-hand margin schemes for vehicles sourced in Great Britain once an agreement is reached with the EU. This interim arrangement will be available for motor vehicles first registered before 1 January 2021. It will end once the second-hand export refund scheme is introduced.
Clause 69 introduces a power to bring in an export refund scheme, which the Government intend to apply to second-hand motor vehicles. The aim of this permanent scheme, once introduced, is to give dealers in Northern Ireland a comparable financial outcome to the margin scheme. The clause achieves this by enabling businesses to claim a refund equivalent to VAT on the price they paid on used vehicles. The scheme will be available for used motor vehicles moving to Northern Ireland and the EU from Great Britain. Legislation to implement the scheme will be introduced once we have held further discussions with the industry.
Clause 70 simply makes some consequential changes to VAT to limit the zero rate for export or removal of goods where they are subject to the margin scheme. This is a technical measure that will ensure that businesses are not at an advantage compared with before the end of the transition period. Businesses will still be able to export goods at zero rate outside the margin scheme. This ensures consistency of treatment across the UK.
These clauses are necessary to ensure that the motor vehicle sector and consumers in Northern Ireland are not disadvantaged. Taken together, they will benefit the 500 businesses that trade in used cars in Northern Ireland.
Clause 71 makes changes to extend a VAT exemption to the importation of dental prostheses. Before the end of the transition period, such prostheses were supplied by registered dentists or dental technicians between Great Britain and Northern Ireland, and were exempt from VAT because an exemption applies to domestic sales. However, following the end of the transition period, the exemption no longer applies to the movement of these goods between GB and Northern Ireland. As the VAT that is due cannot be recovered by the registered dentist, there is a risk that it might be passed on to patients. The changes made by clause 71 extend the current domestic UK VAT exemption to include dental prostheses imported into the UK, including those moving between GB and Northern Ireland, ensuring that we meet our international obligations, and that VAT treatment between GB and Northern Ireland is consistent.
Clause 93 and schedule 14 concern the treatment of goods in the customs-free zones, which are located in freeports. Freeports will help to regenerate areas across the country and bring prosperity to the regions. The Government have already legislated for a beneficial VAT regime on certain business-to-business transactions while in the free zone of a freeport. Clause 93 makes additional VAT elements to freeports by introducing an exit charge to ensure that VAT is collected on goods that have benefited from a zero rate of VAT in a free zone to prevent tax losses or unintended VAT advantage. It therefore maintains a level playing field for UK businesses.
The clause also amends existing VAT legislation to remove any conflict with the new free zone rules. Finally, the clause gives HMRC the power through regulations to adapt the exit charges provisions as necessary. This will ensure that the exit charge is correctly targeted—for instance, to prevent any abuse of the VAT zero rate. Clause 93 and schedule 14 therefore prevent tax loss by introducing an exit charge, and provide clarity to free zone rules by amending existing legislation that may conflict with them.
Our VAT measures take advantage of the opportunities following our exit from the EU to allow our businesses to prosper. I urge the Committee to ensure that clauses 68 to 71, and 93, stand part of the Bill, and that schedule 14 be the fourteenth schedule to the Bill.
James Murray
Thank you, Mr Evans, for the opportunity to respond on behalf of the Opposition to the clauses selected for this debate on particular aspects of the operation of VAT. As the scope of these clauses is quite limited, I suspect that you will not allow me to speak in detail about our call on the Government immediately to cut VAT to zero on domestic energy bills.
The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)
That’s right.
James Murray
Of course, we believe that such a change would offer immediate help now for people struggling with the cost of living over the winter ahead. I therefore urge the Chancellor to reconsider the Government’s refusal of our suggestion, even at this late stage.
Let me turn to the specific measures in the Bill. As we have heard, clauses 68 to 71 make a number of changes to the operation of VAT as it relates to Northern Ireland. Clause 68 allows motor dealers in Northern Ireland to continue to sell vehicles under the second-hand margin scheme, provided that they were sourced in Great Britain or the Isle of Man. This is a temporary measure before a more permanent scheme comes into place. It is, in effect, a technical change to reduce VAT on car dealers in Northern Ireland, and we do not oppose it. We understand that clauses 69 and 70 are necessary consequences of clause 68 to avoid the interim provisions being created for second-hand car sales in Northern Ireland leading to a distortion in the UK market, so we do not oppose them either.
Clause 71 similarly means that registered dentists or dental care professionals, or those importing on their behalf, can exempt from VAT the importation of dental prostheses—medical devices to replace broken or missing teeth. Domestic supplies of such goods are exempt from VAT when made by a registered dental professional. However, under the Northern Ireland protocol, movements of goods between Great Britain and Northern Ireland will technically be treated as exports and imports for VAT purposes. Applying the same VAT treatment to domestic supplies and imports will ensure the equal treatment of dental prostheses supplied within the UK. Again, we do not oppose this measure, as we do not want to see businesses or other workers in Northern Ireland at a disadvantage compared with those in other parts of the UK.
Clause 93 and schedule 14 relate to free zones—secure customs sites within a wider freeport area. Existing regulations already provide for the zero rating of certain supplies of goods and services in free zones, and the purpose of the clause is to put in place an exit charge to ensure that businesses do not gain unintended advantage from the zero rate. Again, we recognise the role this measure plays and we will not be opposing it.
Peter Grant (Glenrothes) (SNP)
I am not planning to take up all the allotted time until 8.52 pm, although I did warn my colleagues in the SNP group that I was going to take until half-past 8 and then go to a Division, which did not make me flavour of the month.
The Minister can put a bold face on the wonderful gift the Government are giving to the people of Northern Ireland, and to car dealers in Northern Ireland in particular, under clauses 68, 69 and 70, but this is just another sticking plaster over the botched job that Brexit has been, especially in relation to Northern Ireland. That is because nothing that is delivered to businesses or customers in Northern Ireland is any better than the deal they already had before they were dragged out of the European Union against, let us not forget, the express wish of a majority of people in Northern Ireland at the referendum in 2016.
The question is: how many more of these patch-up jobs do we need? I have lost count of the number of times that I have spoken in Bill Committees or in Delegated Legislation Committees pointing out that the only reason more and more legislation is needed is to fill gaps in previous legislation that had been put there to correct mistakes in even earlier legislation, rushed through by a Government who went into Brexit with no idea of what it meant and who ever since then have been trying to prevent us from understanding, and trying to conceal from the general population, just how much of a mess it continues to be. Anyone who says that Brexit has been got done either does not understand the truth or cannot be trusted to tell the truth.
In relation to clause 93 and schedule 14, the Committee will be aware that the approach that has been taken to free zones in Scotland is very different—or at least it would be very different if the Government were not so determined to force their lack of concern for workers’ rights and for the environment on to the proposals of the Scottish Government. The Scottish Government had a proposal that should have been acceptable to the UK Government but for two problems: it demanded net zero freeports or free zones and it demanded enhanced workers’ rights. What problem can the Government have with that? Why do the Government not want the Scottish Government to undertake action on green ports or freeports that delivers our net zero commitments? What do the Government have in mind for future legislation on workers’ rights if they were not prepared to allow the Scottish Government to build that into legislation around green ports in Scotland?
The Scottish Government had a productive dialogue with the Treasury. They were ready to launch a joint applicant prospectus for green ports in March, but it never happened. In September, the Secretary of State for Scotland made it clear that Scotland’s proposal was not acceptable to the Government. I do not know whether this is technically within the scope of what we are discussing just now, so it may not be appropriate for the Minister to explain it, but I, my colleagues on the SNP Benches, a lot of colleagues in the Scottish Parliament and a lot of businesses in Scotland really want to know why the Government are refusing to allow the Scottish Government to legislate for green ports to meet the needs of Scotland and meet the demands and values of the Parliament that the Scottish people have elected.
I will not be seeking to divide the Committee on any of these clauses. Quite clearly, they are all necessary. As my colleagues mentioned earlier, there are any number of parts of the Bill that we would have liked to divide the Committee on, but we cannot because of the crazy way that this place does Budgets, where effectively most of the big decisions are taken before there is any proper debate on them. That is not a sensible way to set Budgets that will impact the lives of every single person and every single business in these islands. I hope that for once the Government will listen to these representations and come back next year with a method of setting Budgets that is more inclusive, more in tune with what happens in modern democratic Parliaments across the rest of Europe and elsewhere, and will almost certainly deliver a better Budget and a better Finance Bill than the one we have just now.
Lucy Frazer
I will be brief. I am pleased that these measures have cross-party support. We can tell that because both Front-Bench spokesmen took the opportunity to talk about other measures that are not in the Bill. To touch briefly on what they said, the hon. Member for Ealing North (James Murray) will know that we do not support reducing VAT on energy bills because it will not protect specifically those on the lowest incomes, but just give a tax break to those on high incomes. We are therefore bringing in specified measures to protect those on low pay.
The hon. Member for Glenrothes (Peter Grant) talked about the Scottish green ports. We would like to ensure that the whole UK can benefit, and we remain committed to establishing at least one freeport in Scotland, Wales and Northern Ireland as soon as possible. We are confident that our model embraces the highest employment and environmental standards, and they will be national hubs for trade, innovation and commerce. For all the reasons that I have set out, I commend the clauses and the schedule to the Committee.
Question put and agreed to.
Clause 68 accordingly ordered to stand part of the Bill.
Clauses 69 to 71 ordered to stand part of the Bill.
Clause 93 ordered to stand part of the Bill.
Schedule 14 agreed to.
The Deputy Speaker resumed the Chair.
Bill (Clauses 4, 6 to 8, schedule 1, clause 12, clauses 27 and 28, clauses 53 to 66, clauses 68 to 71, clauses 84 to 92, schedules 12 and 13, clause 93 and schedule 14, and certain new clauses and new schedules), as amended, to lie upon the Table.
Business without Debate
Delegated Legislation
Petitions
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Chris Evans (Islwyn) (Lab/Co-op)
I want to bring to the attention of the House the issue of illegal off-road biking, which is blighting valleys communities. The petition from the residents of Abercan in my constituency of Islwyn received more than 100 signatures.
The petition states:
The petition of residents of the constituency of Islwyn,
Declares that illegal off-road vehicles have caused and continue to cause irreparable damage to the environment of the Gwyddon Forestry in Abercan; further that the Gwyddon Forestry has, until recent years, been a safe haven for wildlife to flourish and for cyclists, pedestrians and horse riders to enjoy the rights of way and footpaths afforded to them, but that the vehicles are now destroying the natural habitats of wildlife; further that residents have been threatened when confronting illegal vehicle-users and have concerns for their own safety when reporting these issues to the police; and further that the off-road vehicles are drive and ridden recklessly by uninsured and unlicensed individuals, making it inevitable that accidents will take place.
The petitioners therefore request that the House of Commons urge the Government to engage with South Wales and Gwent Police to enforce the laws currently in place to prevent illegal activity and to encourage stronger actions against illegal off-road riders and drivers.
And the petitioners remain, etc.
[P002699]
Valerie Vaz (Walsall South) (Lab)
The petition is from the residents of Walsall and the United Kingdom. There were more than 2,000 signatures to the online petition in similar terms. The petition states:
The petition of residents of the United Kingdom,
Declares that the Black Country Plan will build 5000 homes on the Walsall Green Belt; further that 592 of these homes will be built alongside the Walsall Arboretum, the only area of the park with open field and animal grazing views; further that the development will destroy the Green Belt, wildlife corridors and increase flooding; further that protected species of badgers and bats’ habitats will be destroyed; and further that the red deer, barn owl, tawny owl, buzzards and parakeets will be lost to the area as they try to navigate around noise and light pollution.
The petitioners therefore request that the House of Commons urge the Government to take into account the concerns of the petitioners and cancel plans to build houses on the Walsall Green Belt.
And the petitioners remain, etc.
[P002700]
Mr Richard Holden (North West Durham) (Con)
On a point of order, Mr Deputy Speaker. I have given notice to the hon. Member for Easington (Grahame Morris) ahead of this point of order. What I understood yesterday in my point of order was in fact incorrect. I am happy to set the record straight now.
Mr Deputy Speaker (Mr Nigel Evans)
Thank you, Mr Holden. I am grateful that that is now on the record.
Shotton Steelworks: 125th Anniversary
(3 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mark Tami (Alyn and Deeside) (Lab)
When I looked at the Order Paper, I thought I might be making my speech at about 9 o’clock or even later, so I am pleasantly surprised. I am willing to take interventions as we have more time.
This year in Alyn and Deeside, we are delighted to be celebrating the 125th anniversary of the Shotton steelworks, which is now under the ownership of Tata Steel. The plant employs about 800 people and is an integral part of the local community. For generations, Shotton Steel has provided secure jobs and supported the local economy, and has made the Shotton site synonymous with quality, productivity and innovation. Celebrating this significant landmark is an opportunity not only to reflect on the past but to prepare for future challenges to ensure that the Shotton Steel plant continues to flourish and that it remains a stable local employer for another 125 years. I will probably have retired by then, but you never know.
Jessica Morden
On that point, Mr Deputy Speaker, I congratulate my right hon. Friend on securing the debate. On behalf of Llanwern steelworks, I send greetings to Shotton on its 125th birthday; Llanwern is considerably younger. Does he agree that it is important to emphasise how interconnected operations are between south and north Wales, and all parts of Wales, in the steel industry, and how important Shotton is for steel producers in south Wales?
Mark Tami
I totally agree with my hon. Friend’s important point. Although Shotton is doing very well at the moment—touch wood—it is reliant on Port Talbot for the steel that it finishes. Without that, the business model does not work.
For decades, Shotton Steel has produced some of the finest steel products in the world. Today, as part of Tata Steel, it takes its place in a network of steelmakers that stretches across five continents with about 81,000 employees. Shotton is well known across the world for its extraordinary quality, efficiency and profitability, and is the company’s base for a unique range of metallic and paint-coated products that are widely used in the domestic appliance, construction and other sectors. Even in this digital age, steel is essential for our public services, manufacturing, military, and everyday essentials.
Shotton’s long history provides the solid foundation on which its current success is built. John Summers, born in the 1820s, ran a small business using one of the country’s first handheld rolling mills to roll puddled iron into crude steel sheets for clog nails. I must say that I was not around then.
Mark Tami
Really.
After John Summers’ death in 1876, the business began to expand under the leadership of his son Harry, who joined forces with three of his brothers, grew the business and opened the Hawarden iron works on the banks of the River Dee in 1896. With a 250-strong workforce and the installation of eight steam-driven rolling mills, galvanising pots, annealing furnaces and corrugating equipment, that was the beginning of the Shotton Steel plant that we know today.
Workers travelled from all over the country, such was the production demand, and by 1902 Harry Summers had turned the plant’s attention to steel production, with the site in Shotton being recognised as a leading steel manufacturer by 1909. John Summers and Sons was now the largest manufacturer of galvanised steel in the country, with a site covering 60 acres and employing 3,000 workers.
One of only two strikes in the works’ history caused major disruption to production between 1909 and 1910. The dispute concerned the contract system, whereby at each mill one person—the contractor—employed ten others on a piecework system. It was common for workers to be paid according to favouritism, rather than the hours they actually worked or their productivity.
Mark Tami
I can only agree with my hon. Friend.
Believe it or not, there was even the idea that some received payment in the local pub by way of a pint or two of beer. As a result, many joined the Steel Smelters Union in protest, and to avoid industrial action the Summers family drew up a deal with the disgruntled workers. However, the deal failed to avoid industrial action, as the contractors protested against it, with daily picketing at the factory gates. The dispute came to end in December 1910, following a mass address to the workforce by Harry, who agreed to replace the ad hoc contract system with the direct payment of wages—progress, indeed.
Following this period of uncertainty, Shotton focused its efforts on the first world war, producing thousands of steel sheets for the trenches, Nissen huts and shell making. Despite jobs in production remaining strictly for men, many women entered the site for the first time to carry out clerical work. In the immediate post-war years, Shotton Steel maintained its success, with the workforce rising to some 5,800. The period between the two world wars saw considerable change in both production techniques and global demand, with a general decline in demand for black and galvanised sheets, which at one time accounted for 98% of Shotton’s production. Disruption continued during the great depression following the Wall Street crash and Black Friday, when two thirds of Shotton’s workers lost their jobs and the plant closed its doors, not to open again until 1933.
During the second world war, Shotton Works operated at full capacity, producing 2.2 million tons of black and galvanised sheets for various uses. Most notably, as I am sure people will remember—I do not know whether they will remember at first hand—there were the Anderson air raid shelters, which saved many lives during the blitz. Unlike in the first world war, women were now employed in the labs, packing departments and cranes, making up about 1,000 of the workforce. Harry Summers died shortly before the end of the war, but he has always been remembered fondly:
“A more fearless, a more honest and more straightforward man it would be hard to name”,
as Richard Summers wrote in his obituary of Harry.
His Royal Highness Prince Philip, the Duke of Edinburgh, officially opened the first phase of the plant’s post-war development scheme in 1953, giving the plant additional space. At that time, steel consumption by the UK car industry had increased by 88%, creating a dramatic rise in demand. Under Harold Wilson’s Labour Government, Shotton moved to public ownership under the British Steel Corporation, employing 12,000 people out of the 270,000 British Steel Corporation employees nationwide. That figure, if we think of the workforce today, shows the dramatic change.
While this marked the end of the Summers’ ownership, for generations after the family name remained synonymous with Shotton. The Summers family had guided the company to become a world leader in steelmaking, putting Deeside on the global stage. I know that many people, even now, still refer to it as Summers’s—the name has lived on.
The 1970s were dominated by disputes over plans to phase out iron and steelmaking at Shotton, as part of the Government’s deep-seated review of the British Steel Corporation. Following several protests and backroom negotiations, led by the workers action committee, in May 1977 the British Steel Corporation removed proposals for the termination of iron and steelmaking at Shotton. With trading prospects looking brighter, the review was put on hold until 1982.
Sadly, rising oil prices and declining demand for strip mill products brought the review forward to 1979, resulting in a plan to end iron and steelmaking at the plant by 1981. Around 6,400 jobs were to be phased out following an agreement between the British Steel Corporation and trade unions. No community in living memory had faced the prospects of such a substantial and rapid loss of jobs—I think it was the place where the largest number of jobs were lost on a single day in a single plant anywhere in western Europe. As a result of only the second period of industrial action in its history, some 7,000 workers clocked off in December 1979, never to return other than for counselling. The heavy end closure was eventually complete in 1981.
The workers action committee, which had fought hard for the retention of iron and steelmaking at the works since 1972, formally disbanded its campaign, which was probably the longest in British industrial history. It had been successful to the extent that Government decisions were reversed on two occasions, with the British Steel Corporation withdrawing its closure proposal totally at one time. Despite the eventual loss of jobs, the Shotton campaign is regarded by many in this place, trade unionists and others as a model of collective resistance. By peaceful demonstration, reasoned argument and persuasion, the men and women of Shotton won support and sympathy at the highest level of Government. I put on record my thanks and, I am sure, that of everyone at Shotton, to Lord Jones, now in the other place, who led delegations and campaigns and spoke many times in this place and the other place, and continues to do so, in support of Shotton and how vital it is to the area.
Towards the close of the century, Shotton’s productivity saw strong growth, with modern equipment and processes, an increasing product range, and high-quality performance. Shotton was the centre of Britain’s coated steel production once again. By the time the Corus Group was formed to run the Shotton plant in 1999, productivity had tripled compared with 1986 levels. Corus was acquired by the Tata Steel group in 2007, and despite global financial challenges, the works remained profitable and forward thinking. With a focus on high-value products, the works achieved a record level of profitability within 10 years. Today, Shotton’s primary markets are construction and consumer products, supplying global brands such as Airbus, Jaguar Land Rover, IKEA and Wickes. As I said, it employs around 800 people.
In its 125-year history, Shotton has remained resolute, and it is still one of the largest employers in Alyn and Deeside, fostering hundreds of livelihoods. We can reflect on the history, but we should not dwell on it, because the next 125 years are just as important as the first, if not more important. This Government must step up their support for the UK steel industry, which continues to face critical challenges. A decade of Government indifference and failure to take action has caused the UK steel industry to nosedive by a fifth—a £1 billion hit to our economy. Since 2010, UK steel production has plummeted by 21.5%, which is 20 times the average among other European countries.
We are all experiencing the dramatic rise in gas prices, which hits Shotton hard because it relies mainly on gas for its energy. When we compare our gas and electricity prices with those in other countries—they are 60% cheaper in Germany and 51% cheaper in France—it is a miracle that we have a steel industry at all.
Stephen Kinnock
As my hon. Friend the Member for Newport East (Jessica Morden) rightly pointed out, there is a family of steelmaking plants in Wales, Port Talbot obviously being the hub, and we send birthday greetings to Shotton. The integrated nature of the steelmaking process means that the energy costs for Port Talbot, which are the highest in Wales, are crucial for the entire steelmaking process in Wales. As my right hon. Friend the Member for Alyn and Deeside (Mark Tami) has rightly pointed out, we are trying to compete with one hand tied behind our back, because the Government’s inaction is leaving us with massively higher energy costs than our European partners and neighbours.
I hope the Minister does not say, “Well, we pay the energy intensive industries compensation fund,” because these energy price disparities exist after that fund has been provided. Let us please not hear that line again from the Government. Does my right hon. Friend agree that this is the No. 1 priority? We are just asking for a level playing field. We have talked about the past, but the present and the future are so much more important. Unless we get this sorted, we are going to be uncompetitive for another year, two years or even 125 years.
Nia Griffith (Llanelli) (Lab)
I congratulate Shotton steel plant on its 125th anniversary. I bring greetings from Trostre, which this year celebrated nearly 70 years of existence but, like Shotton, uses the steel produced in Port Talbot. Does my right hon. Friend agree that the Government must not only pull out all the stops to ensure the very existence of our steel industry, which is facing these astronomical and totally uncompetitive prices, but invest in a massive renewables programme to secure energy for the future, help the decarbonisation of steel production in this country and ensure the future of Shotton, Trostre, Llanwern and Port Talbot?
Mark Tami
Once again, I agree. I am also very concerned that the Government only ever seem interested in the steel industry when we are in crisis. When there is a crisis, suddenly the Government are all over the steel industry, and the moment it drops out of the headlines, so does the Government’s interest in it. That is just not acceptable. As my hon. Friends have said, the danger is that, at some point, the industry—or significant parts of it—will fall over. My hon. Friend the Member for Aberavon (Stephen Kinnock) made the point that without Port Talbot, there is a danger that there would not be a Shotton either. That is a point that the Government really need to grasp.
There is no mention of steel in the Government’s latest Budget or their so-called plan for growth, and their industrial strategy has effectively been scrapped. There has been a total failure to support environmental targets with investment that could boost decarbonisation in the industry. Funding from the clean steel fund has been delayed until 2023 and, as I have said, the issue of high energy prices has been completely ignored. All we ever get is, “Oh, it’s nothing to do with us. Have a look at Ofgem; maybe they can do something.” That is not acceptable.
Labour’s analysis shows that 24p of every pound spent on steel for Government infrastructure projects was spent outside the UK in 2017-18, meaning that Shotton and other plants throughout the UK have been left behind. The Government are making an utter mockery of their pledge to “level up” with such actions, which leave behind steel areas completely. Stronger “buy British” steel targets could create and safeguard around 50,000 jobs, and boost the economy by £4.4 billion. Vitally, it would also lower the environmental damage of steel imports. True levelling up would consist of more than just rhetoric. It is clear that we need decisive action and decisive planning. We heard only a couple of days ago in the other place that steel for our warships and our submarines is being imported, with the argument being, “We don’t have it in this country.” We do not have it in this country because we were not told soon enough that the plants could start producing what was needed. The end result is that we are importing steel to build warships and submarines. That is how stark the position is and how stark the Government’s failure is.
As well as taking action to secure the next 125 years of production at Shotton, we must also reflect on the role Shotton is taking in the fight against the climate and ecological crises we face—a point raised earlier. We need a green plan for steel and we need it to be supported by the Government. I want Shotton steelworks to become the first carbon-neutral plant in the UK. Shotton has been central to much progress in UK steelmaking for more than a century, so it would be fitting for the plant to lead the country’s decarbonisation efforts. Fortunately for us in Wales, the Welsh Labour Government are already taking the first vital steps to support Shotton’s path to becoming carbon neutral. The manufacturing action plan for Wales, a collaborative effort made between Industry Wales, trade unions and representatives from the manufacturing sector, is central to that progress. First Minister Mark Drakeford is stepping in to take action in pursuit of a prosperous, green and equal economy.
The Tata Steel group has been clear that decarbonisation and securing a green approach to steelmaking are top priorities. Shotton is already playing a key role in the fight against climate change through the application of its products in the construction of “active” buildings, which produce more energy through renewables than they consume. There is scope for more progress, and we must support and encourage Tata with that. Many critics argue that decarbonisation and economic growth in the steel industry are mutually exclusive, but with the right financial backing and strategic approach, Shotton can lead the UK steel industry to being carbon neutral and continue to support jobs in north Wales.
We hear a lot from the Government that hydrogen is the future. It may well be the future, but it is not currently the present and it will not be the future unless we invest in it. It is not going to happen by accident that one day we wake up and the steel industry and other industries suddenly have plentiful supplies of hydrogen, it works and everything is fine. We need to be ploughing investment into research now, otherwise we will fall further behind and we are already falling behind our European neighbours.
The steel industry in Alyn and Deeside is the very fabric of our area.
Stephen Kinnock
The point on hydrogen relates to the discussion we were having about energy costs. An electric arc furnace approach or a hydrogen-based approach takes even more energy, power and electricity than the current gas-fired approach. If we do not get the energy costs issue sorted, it will completely hamstring our efforts towards decarbonisation.
Matt Western (Warwick and Leamington) (Lab)
I listened closely to what my right hon. Friend said about energy. On the point about costs, the Labour party’s proposal to introduce a total review of business rates is critical to the industry. As we know, comparison of business rates in this country with their equivalent in Europe shows a disadvantage for the UK of something like 70%.
Mark Tami
My hon. Friend makes a very good point. Every which way the industry turns, it seems to be at a disadvantage to its neighbours.
I implore the Government: instead of turning their back, will they turn towards the people they serve, provide a proper industrial strategy for the industry and the workers, support the industry to decarbonise, and put stronger targets in place to buy British? It is our duty and our place to stand up and represent the industries and businesses providing a livelihood for the people we represent, which are the lifeblood of our areas, while taking steps to secure a green and sustainable environmental future for us all.
Shotton has provided communities in Alyn and Deeside with secure employment since its inception, has supported the local and global economy and has provided vital quality products for infrastructure developments. The Government must recognise and support the Tata Steel group in its effort to transform into a green steel producer. I will continue, as I am sure hon. Friends will, to demand that funding is properly directed to that area. Above all, I will continue to stand with the workers of Shotton Steel, the trade unions and the management, for it is their skill and dedication that maintain production and innovation. It is they who keep Shotton at the heart of the community, and it is they who will be central to the next 125 years of steel making in Alyn and Deeside.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Lee Rowley)
Thank you, Mr Deputy Speaker, for the opportunity to speak this evening. I am grateful to the right hon. Member for Alyn and Deeside (Mark Tami); I congratulate him on securing this very important debate for him and his constituents. It is important that we celebrate this extremely important milestone for his constituency and for north Wales in general, so I am grateful for the opportunity to contribute to the debate and respond on behalf of the Government.
I confess that I do not know a huge amount about Shotton steelworks—I come from a very different part of the country—but it has been very helpful to hear all the history that the right hon. Member has outlined so clearly and cogently in the past 20 minutes or so. From the little I do know, I know that there are many reasons to celebrate the 125th anniversary of Shotton Works. One reason is the history that he went through; it has been fascinating to hear about the contribution that Shotton has made for so long, the deeply embedded history within the community and the opportunities that Shotton has had over a century and a quarter. Its contribution over such a long time includes producing millions of tonnes of steel sheet to build shelters for the population in the second world war, for example.
The hon. Member for Newport East (Jessica Morden) highlighted the interaction of steelworks, across Wales and more broadly. Shortly after being appointed Minister for industry, I had the privilege of visiting Tata’s plant at Port Talbot. It was an extremely interesting and useful visit: I was impressed by the scale of the plant and the level of integration of systems. I have not yet had the opportunity to go to Shotton, but I look forward to doing so. I am aware that Shotton steel can be seen in a huge number of places, from IKEA stores to Jaguar Land Rover showrooms and even the Old Trafford stadium. The sculpture commissioned to mark the anniversary showcases the best of the plant’s products and will be a proud reminder of this milestone.
In highlighting the constant evolution and innovation of the Shotton plant, I pay tribute to the very regular discussions about Shotton over so many decades in this place, not least because of the contributions from the right hon. Member for Alyn and Deeside as its constituency Member of Parliament since 2001. He mentioned his predecessor, Barry Jones, who was just as assiduous a contributor on the issue; Barry Jones’s predecessor, Eirene White, was talking back in 1954 about how Shotton steelworks had secured
“a…record in steel production.”—[Official Report, 24 November 1954; Vol. 533, c. 1337.]
It was a pleasure to work through Hansard for a little while this afternoon to understand the history of Shotton’s relation to this place. I think it was talked about as long ago as November 1948, when there was a big discussion about whether iron ore should have been brought over from Birkenhead or sourced from elsewhere.
I know, on a personal level, how important this is to the right hon. Gentleman’s constituency. My own constituency is not particularly steel-based, although there is plenty of steel nearby, but it has a proud industrial heritage and a proud industrial past, and is making its way towards the coming decades of the new industry that the right hon. Gentleman is so keen on. Speaking as the Member of Parliament for North East Derbyshire as well as the Minister for industry, I know how important Sheffield steel is to local communities, and I know that it has been integrated in the histories of those communities. I have no doubt that that applies as much to steel in Wales as it does to steel in Sheffield.
My constituency has faced similar challenges. We had a steelworks back in the 1870s, a little before the right hon. Gentleman’s steelworks began, but it closed overnight in 1883, and all the activity was moved up to Cumbria. Although it was on a very small scale and long before my time, I am well aware of the huge interaction involved, and of the huge importance of the steelworks industry in general to local communities.
I applaud Shotton’s commitment to becoming carbon-neutral by 2040, and the efforts that have been made so far. For the past 15 years the site has run a scheme offering to offset customers’ carbon emissions, and as a result more than 130,000 tonnes have been offset via investment in clean energy projects in the developing world. I also pay tribute to its work with Natural Resources Wales to create bird habitats: I understand that 20,000 tern chicks have flown from the breeding grounds created in the lagoons. That is a brilliant example of the way in which industry and nature can co-exist.
I know how important Shotton and its history are to the right hon. Gentleman’s constituents, but I also know that we have the shared aim of securing the future of steelmaking in this country, particularly in the areas where it has a history and has thrived for so long. Although he and I may not agree on every element of the speech he has made tonight, I know that how assiduous he is, and how keen he is to see more progress and improvement. Let me now deal with a few of his points, in the spirit of constructiveness that has been set by the debate.
I recognise the challenges that the right hon. Gentleman has identified in suggesting that the Government are not taking steel seriously, but I would urge some caution. While there is no doubt that challenges will be coming our way in the next few decades, I believe that for a number of years the Government have demonstrated their willingness to support the UK industry where necessary to maintain its resilience. Mention has already been made of the subsidies that have been provided to support electricity for the steel industry, and for other energy-intensive industries, over the past decade or so. The industrial energy transformation fund is helping to transform steelmaking in Wales, and a project is going on there right now. The net zero hydrogen fund is coming, and funds are currently in place for the Materials Processing Institute to increase efficiency, reduce emissions and improve competitiveness.
I accept that gas prices are high at the moment: there can be no argument about that. They are volatile, and have been for some months. At some points in 2020, they were low in relation to where they have been historically, but they are now relatively high. However, I hope that the support that we have provided for energy-intensive industries since 2013 has mitigated that to some extent, and we have confirmed that it will continue.
Lee Rowley
I know that the right hon. Gentleman will not expect me to accept that point. We accept that there is a challenge with energy prices at the moment, and we understand that that is a cause for concern for a number of energy-intensive industries, including steel, ceramics—which I debated with a number of colleagues in this Chamber and beyond in another place last week—glass and paper. We are keen to understand the detail, and it is important that we recognise that there is nuance in this debate and that different strategies are being employed by different companies.
There are also different contexts in which these energy prices are applied. A diverse group of industries are impacted by gas prices. Efficiencies are being pursued in some places, and there are hedging strategies in others. I accept the right hon. Gentleman’s challenge that energy prices are high, albeit volatile and variable, but I hope he will also acknowledge that we are really trying to work with the industry and the sectors to understand the different challenges presented by high gas prices, and that we will continue to do so over the coming weeks and months.
Matt Western
I applaud the Minister’s ambition in seeking to address energy costs in the energy-intensive industries that he has just identified. Would he welcome and support a move towards a greater number of onshore wind turbines, which would be one of the best providers of low-cost energy to this country?
Lee Rowley
If the hon. Gentleman will forgive me, I will not set out our energy strategy on wind turbines today. That would be a matter for one of my colleagues in the Department. The broader point that he makes, however, is that over the coming decades we need to decarbonise our electricity supply. We have had some success in doing that over the previous decades. By doing that, through whichever process we can achieve it, we will ensure that we have clean and green energy to support industries such as we are talking about today.
I just want to touch on a couple more points before I close. The right hon. Member for Alyn and Deeside highlighted his concern that the Government do not focus on steel. I would not accept that point. In the 10 or so weeks that I have been the Industry Minister, I have already visited two steel mills and had regular conversations with the companies involved. I have met them on a number of roundtables and will continue to do that. On a broader level, we had the announcement at COP26 and the Glasgow breakthroughs, and we will be working with a number of countries around the world to ensure that we can decarbonise the industries that are more challenging to decarbonise. That indicates a desire to find ways through difficult challenges where there are no easy answers, and the Government and communities are trying to work through how to do that.
One way is through hydrogen, as the right hon. Gentleman highlighted extensively in his speech. He was somewhat sceptical about the UK Government’s activities in this space, but I want to place on record for completeness that there has been significant movement on hydrogen in recent months. We had the publication of the hydrogen strategy in August, the hydrogen business model is being consulted on, and the net zero hydrogen fund stands at nearly £0.25 billion. We also have the UK low carbon hydrogen standard. Of course there is much more to do on that, which is why we are putting in place the frameworks for that to happen, but I hope that that demonstrates an intent from the Government to explore the possibilities around hydrogen.
Finally, I want to touch on procurement, because I know that that was an important part of the right hon. Gentleman’s speech.
Nia Griffith
Just before the Minister moves on to procurement, may I say that it is disappointing that he does not seem to have taken on board the seriousness of the issue of energy costs? They were 61% above those of our major competitors before any of the crises and conditions that we now face. I ask him to take this seriously now, and to go back and have a real think about what we are going to do, because we are genuinely facing the extinction of our steel industry if we cannot be properly competitive.
Lee Rowley
I am grateful to the hon. Lady for highlighting that this issue is vital to companies across Wales and across the country, and I reiterate that we take it seriously. In recent months, much of my time as Industry Minister has been spent on meeting and speaking to those affected to get into the detail of their concerns and how they are affecting individual companies and individual sectors. A diverse range of sectors are affected, and we will continue to work with industry to see what is possible within the wider context of volatile and variable gas prices over the coming months.
The right hon. Member for Alyn and Deeside highlighted his concern about procurement, and I gently highlight the procurement taskforce, which is currently under way. A substantial amount of procurement in the public sector is supported by UK steel. Last year more than £100 million-worth of UK steel was procured by major public projects in the UK. Network Rail reports that 85% of the steel it took in during 2019-20 was from UK producers, and High Speed 2 reports that all of its structural steel is from UK producers. We know that UK steel is a brilliant product, and we know it has brilliant opportunities. We want it to be able to take those opportunities both in the UK market and globally in the years ahead.
I hope it is recognised on both sides of the House that the importance of the UK steel industry to resilience and ensuring we have a clear pathway is taken as read. Steel is important to the UK and to the UK Government. We have given it substantial support in recent years, and we will continue to consider what is possible in the years ahead. We recognise there are challenges and the work continues, but I thank the right hon. Gentleman for securing this debate and for providing me with the opportunity to respond. I wish Shotton all the best in the next century and a half.
Mr Deputy Speaker (Mr Nigel Evans)
From this proud Welshman, will you take the very warm wishes and congratulations of everybody at the House of Commons to Shotton steelworks, to the current workforce and to the former employees and their families, and will you congratulate them all on this incredible milestone?
Question put and agreed to.