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Foreign Lobbying
(2 years, 5 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Bob Seely (Isle of Wight) (Con)
I beg to move,
That this House has considered foreign lobbying in the UK.
As ever, it is a pleasure to serve under your chairmanship, Dame Angela.
I am going to use this debate on foreign lobbying to lobby the Government. They have published their National Security Bill, and the foreign lobbying registration element is still being written and decided upon. It is great that that is there, and it is great that we have the chance—I hope—to influence the Government. I thank the Minister very much for taking the time to be here.
I am going to argue three points. First, we need a substantially improved lobbying law—in fact, lobbying laws. What we have is arguably no longer fit for purpose, if it ever was. Secondly, there is a specific problem with foreign lobbying, which has been getting worse over the past decade. Indeed, the problems that we have had with lobbying arguably go back some 20 years at least. Thirdly, and perhaps most importantly for the theorists of war and conflict, in this era there is a blurred line between espionage, agent recruitment and covert, malign, unhealthy, unethical influence, and overt lobbying. One should see those not as being separate, but as being, effectively, on a continuum from dark to light, and perhaps quite an unhealthy continuum with respect to some elements.
To ensure the health of our democracy, we need a stronger and more transparent system, and I want to use my speech to make suggestions for the Government’s National Security Bill. I would be grateful if the Minister confirmed that the Government are still committed to having a substantive—I hope—and broad foreign agent registration process in the Bill. By that, I mean a registration process that involves not only those people who work within a narrow definition of lobbying, but a broader definition, which, in our era, should include the lawyers, the public relations people, the strategists and the enablers not only for foreign states—that is another critical element—but for the formal and informal proxies such as oligarchs, major corporations and broadcasting entities that are obviously linked to those states, especially when they are effectively one-party states with a different and non-democratic tradition.
Primarily, I am talking about Russia—in the past three months, the situation with Russia has changed from light to dark—as well as China, Iran and their proxies. Some in this country argue that such measures should cover countries such as Saudi Arabia, which is an ally—a close ally—but which does a great deal of lobbying in this country, as do other friendly states.
There is also a debate about how we treat people and about whether we should have one set of standards or a sliding scale. Do I think that Oleg Deripaska should be treated in the same way as New Zealand’s tourist board? No. It would be welcome to have a light regulatory process for foreign entities such as Sweden’s trade authority or New Zealand’s tourist board, but for a Russian oligarch—many of whom have been sanctioned, so this is slightly hypothetical—or a firm such as Huawei, we should insist on much higher standards.
Let me say by way of background that we know that, around the world, Governments and their proxies make extensive use of overt lobbying and influence campaigns. There is nothing inherently illegal about that, although some might consider it unethical. However, a number of hostile states—including, but not limited to, China and Russia—have utilised lobbying as part of their operations against our national interest. Arguably nowadays, covert influence is part and parcel of hybrid forms of conflict. Indeed, in both Russian and Chinese doctrine, hybrid conflict is specifically talked about in terms of military and non-military tools. In Russian doctrine, the first characteristic of modern contemporary conflict is the linkage of military effect with non-military effect, be that information politics, economics or suchlike, of which overt and covert malign lobbying are very much part.
I am glad that the Government have said that this is a problem. In 2019, they declared they would reduce the threat posed by hostile state activity in the UK; that is great.
Mr Steve Baker (Wycombe) (Con)
May I ask my hon. Friend to explain what he means by covert influence? Does he mean intelligence agents using the cover of being lobbyists, or something else?
Bob Seely
That is a good question; I am not sure I can define it. It is possible to define the outcome, which is trying to influence events in an unethical, potentially illegal way, while not doing so overtly—for instance, by the Russian intelligence service, the GRU. It is apparently not illegal for someone to be a PR person for the GRU. If they were given secret documents, it would be illegal.
Do I think a definition of covert influence should just be somebody working for what they believe to be a foreign state intelligence agency? No, I think it is much broader than that. It would cover people such as Russian oligarchs and Chinese corporations. The issue is that, in a one-party state, it is difficult to make a distinction between state entities, and significant and powerful individuals, who are using covert, non-declared forms of influence to project either their own power, or their own and state power. That is the issue.
I used to hate definitions, and then I did a PhD and found that definitions are rather useful, because one has to decide what one is talking about. One thing I thought was slightly disappointing, though maybe understandable, occurred when the Select Committee on Foreign Affairs looked at the National Security and Investment Bill. We put forward a suggestion for a definition of national security, which the Government did not want to include. A definition of some of these things would be highly valuable. I would certainly welcome attempts by the Government in that regard. In fact, I may do it myself, so I thank my hon. Friend for the question.
The Government said they would adopt a form of foreign agent registration, by looking at
“like-minded international partners’ legislation.”
The two most important, by some distance, are the Foreign Agents Registration Act process in the United States, and the Foreign Influence Transparency Scheme Act in Australia. FARA, in the US, came in in 1938 as a result of covert Nazi lobbying, and was very timely, three years before the US entry into the war. In 2018, the Australians adopted their own foreign influence transparency scheme, largely because of the role of Chinese covert influence in Australia. That has been well documented by the author Clive Hamilton, in his book “Silent Invasion”, which I recommend.
In the US alone, foreign agents spent nearly $1 billion a year over a three-year period influencing the US Government. In the US, it is big business, and I suggest it is also big business in the UK.
Stephen Kinnock (Aberavon) (Lab)
The hon. Gentleman is making an excellent speech. On the point of how clearly to define lobbying and influence, I can briefly give an example. In 2019, I wrote to the then chair of the Conservative party, the right hon. Member for Great Yarmouth (Brandon Lewis), who is now the Northern Ireland Secretary, raising concerns about a gentleman called Ehud Sheleg, who at the time was treasurer of the Conservative party. I raised concerns around national security and permissible donations, because of Mr Sheleg’s very close connections to Russia; his father-in-law was a pro-Kremlin politician in Ukraine at the time. The right hon. Member for Great Yarmouth chose to reply by threatening to sue me for libel. I would welcome the comments of the hon. Member for Isle of Wight (Bob Seely) regarding that response.
Last week, The New York Times revealed that Mr Sheleg had made a large donation to the Conservative party, which was connected to a gift he said he had received from his father-in-law that had bounced around five or six different bank accounts in Europe before landing in Mr Sheleg’s account. Does the hon. Gentleman believe that somebody like Mr Sheleg would meet the threshold for being registered as a foreign agent, even at the time that he was treasurer of the Conservative party?
Bob Seely
The hon. Gentleman raises a valuable point. I am not sure I can argue the details of that because I do not know enough about the individual case. Simply put, if that individual is deemed to be an informal agent of influence, he should be on a registration process. But that is a big if—if he is deemed to be. The question is, who would deem it?
There is a wider question. Would any Government willingly put China as one of those states that are using covert influence? They absolutely should do, but perhaps several years ago they would not have done so, because any Government, including new Labour, would wish to curry favour with China.
On the wider point about questionable behaviour, there are a number of Members of the House of Lords whose behaviour has frankly been questionable, and that is, I am afraid, on both sides of the House. There is a very well known and senior former new Labour Minister who set himself up as a strategist in order to avoid, frankly, giving up almost any information at all on who his clients are. Considering that that person was also a senior EU Commissioner, he was one of the most powerful people in the land, and he was conducting, probably—I do not know, because we know so little about his business—very powerful, high-level and discreet lobbying, including for Russian clients. There is also a former Labour Attorney General who has taken time out of the House of Lords primarily to give legal advice, seemingly to Russian state or proxy interests.
Is that healthy? Should those people be in Parliament? No. There are, unfortunately, Conservative Ministers who have also behaved, frankly, shamefully, including people who have advised Deripaska. What on earth these individuals are doing and why on earth we allow any of them in Parliament I do not know. I do not say, “Everything we do is fine and everything you do is rubbish,” because that is pitiful and embarrassing. This is a political class problem, not an issue with one particular party. That is the only thing I would say on that. I should probably crack on and make some progress, Dame Angela.
In the UK, no FARA-like legislation exists. The closest thing we have to it is the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014. Which was brought in by the coalition Government. It made some progress, but not enough. It brought in a mandatory register for written and oral questions to Ministers and permanent secretaries by so-called consultant lobbyists. That said, the definition of consultant lobbyists is very narrow. In addition, the Act does not differentiate between clients and those represented, or between foreign and domestic clients.
Thus, a UK entity—be it a peer, a PR company, a finance house or a law firm offering a one-stop shop to oligarchs and other companies—can act on behalf of a foreign entity without that foreign entity being registered. To my mind, that is highly questionable. We know that hostile states are engaged in covert and overt lobbying activities. Most recently, and slightly embarrassingly for the Member concerned, we found out that our secret agencies were discussing one particular case of a Chinese lady working for a Member of Parliament—we all know which one that is.
Cultivating legal and overt, but also questionable and illicit, relationships with serving and retired politicians, civil servants—we often overlook them, but they, not MPs, are the policy experts and policy wonks—academic institutions, think-tanks and regulatory bodies, and using power and influence through an enabling class of finance and legal firms, buys power. Most repugnantly and obviously, this has been practised through the use of lawfare: intimidating legal actions designed to silence those who have attempted to look into, for example, Putin’s oligarchs. There are people here who have spoken out very eloquently on that issue.
The Intelligence and Security Committee’s Russia report highlighted the role of lobbying in the Kremlin’s subversive activities. We know from The Guardian’s leak of secret Russian documents that there was an attempt to influence the UK and US. We have had testimony from Bill Browder, talking about Russia indirectly employing public relations firms and helping Russian individuals to avoid EU sanctions. We have had the excellent book and work from Edward Lucas, who has argued much the same. We have also had this from the former Secret Intelligence Service agent Christopher Steele, who said that lobbyists are used to penetrate “British political and business life”.
None of this is ethical. We know about some of it not because we have good laws in this country to protect us, but because of the work of FARA—the Foreign Agents Registration Act in the United States. The only reason that we found out about the extensive lobbying done by one Member of the House of Lords, Lord Barker, on behalf of Deripaska—
Dame Angela Eagle (in the Chair)
Order. I remind everyone who will be contributing to the debate that the rules say that if you are going to identify a Member of the House of Commons or indeed the Lords—not necessarily by name—you have to have informed them in advance. Has the hon. Member done so?
Dame Angela Eagle (in the Chair)
I know this is a very difficult area. May I ask those who are speaking in the debate—not only the hon. Gentleman—to bear those rules in mind when they make their speeches?
Bob Seely
Obtuse and obscure.
Together with lawyers, accountants, estate agents, public relations professionals and other enablers, lobbyists have formed a buffer around these people. I know that the case with Russia is clearly changing very dramatically—it has been rather forced on us by conflict—but China is another important case that concerns me. I say that as someone who knows that the Government are moving in the right direction, and who is incredibly grateful for the work that the Secretary of State for Defence and the Foreign Secretary have done in this area.
It concerns me greatly that we have not yet made the link between China and Russia. The west has economic dependency on both, be it through trade or energy. Both those countries have dictators for life, and we know that power corrupts and that absolute power corrupts absolutely, so do we really think that President Xi will turn out to be better than President Putin? I would be sceptical. Both covet territory outside their control, both have aggressively rearmed and, perhaps most importantly, both propagandise their people against us and are shaping their people for war in the information and narrative space. China is more sophisticated and richer, and it arguably treats some of its people, especially its Muslim people, worse. It is a rising power, whereas Russia is a declining power, but there are too many similarities between them to claim that China is not Russia. It is a more sophisticated version and, as people such as Clive Hamilton argue, many of its covert activities are just more sophisticated versions of the same thing.
Like the Kremlin, the Chinese Communist party uses state, non-state and quasi-state actors through the United Front Work Department and “cultural and ‘friendship’ associations”. It is alleged to spend some $10 billion a year on external propaganda efforts. The Chinese state also makes use—perhaps more than Russia does—of quasi-state entities, and Huawei is a case in point. It has provided trips, sports tickets and donations to all-party parliamentary groups, and has employed a former head of GCHQ and a former UK chief information officer. It has also used several lobbying firms, and has employed a former head of Ofcom and even a former head of the Foreign Office.
In September 2019, Huawei gave £150,000 to Jesus College, Cambridge, which later produced a White Paper that was favourable to Huawei’s inclusion in the UK’s 5G network. It has done many other things; what I have mentioned is just the tip of the iceberg. What concerns me is that, while this was happening, Ministers whom I respect very much were arguing that Huawei was a private entity—a private firm. I do not expect Ministers to be geniuses, but that situation was uncomfortable.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
On the point about higher education selling its soul to the Chinese Communist party, surely it is not just the Government’s role to regulate their engagement with foreign actors. It is also for other entities in the country, such as higher education.
Bob Seely
The hon. Member makes a very important and valuable point. Cambridge University’s relationship with China is very unhealthy, and Professor Stephen Toope’s leadership of Cambridge has been pretty depressing and questionable. He is not here to defend himself, so I will be careful what I say, but I note that the more woke Cambridge has become, the more it seems to have sold itself to the Chinese state, which I do not think is necessarily a defence of the values that it should be standing up for.
I think that higher education would say it needs clear guidance from the Government. On the foreign agent registration process, it would be excellent if the Government had something to say on the need for universities to register and to explain why they are taking on some students, because we have had Chinese military students coming to study PhDs in sensitive dual-use areas. We need to question that to ensure that we are doing the right thing and that we are not aiding countries to develop technologies that will be used against us.
I will wrap up in the next five minutes, because I am aware that I have taken a long time—my apologies.
We need to improve lobbying laws. I suggest to the Government—I will write separately, but the Minister has the study I produced for them two years ago—five major reforms to tackle the issue of foreign lobbying in the UK, which I hope would create better law and a better National Security Bill when it comes up.
First, we must create laws to compel individuals and entities that lobby in the UK on behalf of hostile states and their proxies to record their activities on a national register. I hope the Minister will take this on board in the constructive way that it is intended. Consultant lobbyists are important, but they are only one part of the problem, as many of us know. Hostile or potentially adversarial states make use of non-lobbyist individuals and entities—cultural entities, educational entities, public relations consultants, research firms, reputation managers, law firms and banks. If someone does work that impacts on policymaking or the political world, they need to be registered. In this day and age we need a broad, not narrow, understanding of what that means for the public good, and for the honesty, integrity and transparency of the political system, which we all want to see improved and strengthened. Nobody wants to sleazify our political, economic or legal system, so we need a belt-and-braces approach, while understanding that the demands we put on the New Zealand tourism board would probably be very different from those we place on a foreign entity, such as Huawei or the Confucius institutes. I note that the normally rather left-wing country, Sweden, has banned Confucius institutes. Should we?
Secondly, we should create laws to force foreign Governments and their proxies to disclose when they spend money on political activities in the UK. Thirdly, we should create laws to bar foreign Governments and their proxies from providing political, financial and other support during election periods. As at least two hon. Members have said, there is a question mark about donations, and I know from previous debates that people with dual nationality are an issue. That debate is obviously not going to go away.
Fourthly, we should create laws to compel foreign Governments and their proxies to label and disclose materials and campaigns undertaken in the UK, including online, not only during election periods but more generally outside election periods, so that we know where advertising is coming from. People should be able to see those messages, which are perfectly legal, but they should understand their provenance. Fifthly, I would make those laws enforceable by significant criminal penalty, so that people who break the law and do not uphold high standards have an expectation that the punishment will be a bit more than a slap on the wrist.
There is a further series of options; they include the following. Should we have a one-tier or one-size-fits-all regime? Should we have a weak, moderate or strong regime? Should we have a two-tier system that either requires nothing of some foreign entities or has a low bar for the sort of information that is required? We have a laissez-faire approach, which is not entirely unhealthy; it is good for our economy. I recognise that we want people to be free to set up in business, and set up what they are doing in this country. My suggestions are not about creating layers of bureaucracy for the Swedish food producers association or the New Zealand tourism board, but every time Huawei hires a lobbyist, we should know. Every time Huawei approaches a Member of the House of Lords or the House of Commons, we should know. If people want to do work for these people, we should know.
People complain about MPs, but I do not think MPs are necessarily the biggest problem—I am not trying to do a mea culpa for us all. The biggest problem is the law firms and people with significant legal and financial power, who do not exist in as transparent a world as we do. Although clearly some of the most outrageous and obvious—how should one say it?—lapses of judgment are often seen in the political world, real power is also influenced by civil servants and Spads. It used to be influenced by the European Commission, though clearly no more in this country, and it is also influenced by significant legal and finance firms. If they are impacting, via lobbying, the business of politics and policy in this country, they should be covered.
I will give one example: Huawei. There is a case to argue that Huawei did not do that much direct lobbying for much of its existence in this country, but that it worked through BT, which effectively became the Huawei spokesman in this country and Huawei’s chief defender. BT may say, “It is rather more complicated than that,” but Huawei was, arguably, effectively influencing UK policy through UK firms that were in business with and economically aligned to Huawei. I think that became a significant problem in the last few years. I am delighted to have played a modest role in the campaign to ensure that Huawei was not part of the 5G network, which was absolutely the right decision. I thank the Government for listening to me and other Members on that issue, and indeed the US Administration as well.
To sum up—I thank hon. Members for giving me a little more time than I said I would take; my apologies—we need to substantially improve lobbying laws, because the laws we have are genuinely not fit for purpose. Do we really want to have these endless lobbying scandals in our legal and political culture, which come around like a carousel every few months, every couple of years? We have the chance to do something better; I very much hope that the National Security Bill will tighten that up. The Minister has been generous enough to say that she is sympathetic towards these arguments, and I thank her.
Within the domestic lobbying framework, there is a specific issue with foreign lobbying. As I said at the beginning, it is important to understand that, whether we think it and see it or not, other states see this action as part of a hybrid conflict model. It is almost the first line of attack—to try to shape our opinions, to try to separate us from the US and to try to get a narrative and message into our economic, legal, political and informational debates in this country. We want a free society, but we need to understand that we have to protect that free society. At the very least, people need to know where some of the messages and campaigns come from.
In this era, there is a battle between open and closed societies. We have seen that most recently from the Ukraine war, but we might see it in the future from China in a Taiwan war, or a confrontation with the wider world. We need to do what we can to defend the open society. The way we best do that is by ensuring transparency, honesty and integrity in our political system. Ensuring that we have strong and fair laws over lobbying and foreign lobbying is one of the critical ways we can do that.
Chris Bryant (Rhondda) (Lab)
It is a great pleasure to serve under your chairmanship, Dame Angela. The hon. Member for Isle of Wight (Bob Seely) can speak as long as he likes on this subject as far as I am concerned. I have had quite a lot of conversations with him in private. He is the House’s expert on this issue and he does us all an enormous favour in raising these issues.
I agree with him; I think we have been too naive for too long—ineptly naive, in some cases. The most striking statistic in this field that I have come across recently is that of the people sanctioned this year by the British Government in relation to the activity in Ukraine, at least 10—10 that we know of—were people who were given tier 1 visas by the British Government in the last few years. In other words, we were inviting people in, letting them sit down and purvey their view of the world in the UK, largely because we were just interested in their money. In the end, Putin has seen us be so craven about Russian bling and he has felt that we are weak and corrupted, and that has emboldened him. It is one of the things that has assisted in what has eventually happened in Ukraine.
Stephen Kinnock
I absolutely welcome, as my hon. Friend does, the Government’s decision to stop the golden visas scheme. Does he not think it would be incredibly helpful for the Government to publish their review into the scheme, which Parliament has been waiting for for more than a year?
Chris Bryant
I completely agree with my hon. Friend. Indeed, I am absolutely confident that the Minister will tell us later when it is going to be published, because the Home Secretary has repeatedly said, in answer to questions from me in the Chamber, that it will be published soon. “Soon” in ministerial language means pretty much anything the Minister feels like it means, but we are beginning to lose patience with the soon-ness, or the lack of soon-ness. The Minister is looking wry and quizzical, but I am sure she will help us out later.
I want to refer to one specific issue. On 8 March I wrote a letter to the Foreign Secretary following her appearance the previous day before the Foreign Affairs Committee. I published the letter on my Twitter feed. I wrote to her to address her allegation that I had obstructed the progress of sanctions legislation through Parliament. In the letter I quoted from various speeches made in Parliament, one of which included allegations made in 2018 against Mr Christopher Chandler. It was not my intention to repeat those allegations, which I accept have subsequently been disproved. I am happy to set the record straight today in Parliament and regret any distress caused to Mr Chandler.
Mr Steve Baker
I am most grateful to the hon. Gentleman for recognising that the allegations have been disproved. Will he join me in imploring all Members who engaged in making those allegations to accept that they have now been disproved?
Chris Bryant
I think it is a matter for individuals to make their decisions on that. I have said what I said and the hon. Gentleman knows why I said it. There is not a formal process for a Back-Bench Member to correct the record. That exists only for Ministers, although they have been notoriously poor at doing it. As the Speaker said at the beginning of this debate: if Members are able to correct the record, it is important that they do so.
I used to be a lobbyist for the BBC and I was always trying to persuade Governments to do things. In and of itself, lobbying is not a bad thing. Indeed, the word “lobby” comes from Parliament because it was the entrance to St Stephen’s Chapel, which was the lobby where people could grab hold of a Member before they went into the House.
I remember sitting on the Public Bill Committee for the Mental Health Act 2007. I was not an expert on the treatment of mental health patients, and my participation in that Bill Committee relied on lobbyists, some of them from mental health charities, some from patients groups, and some from the pharmaceutical industry. In the end I had to make astute judgments when people were trying to influence me, but of itself lobbying is not wrong, although it needs to operate under strict standards. Even foreign lobbying is okay, or we would not have a Foreign Office. Of course, it was Sir Henry Wotton, a Member of Parliament from 1614 to 1625, who, when he was a British diplomat in Augsburg, said:
“An ambassador is an honest”
gentleman
“sent to lie abroad for the good of his country.”
The Minister is nodding. I am not sure whether she is in favour of an honest gentleman or lying.
In this country, in the modern era, we have to be very careful about covert operations in the UK. I think that particularly because we are a free society, believe in the rule of law and have a democratic process that is very open, sometimes we are more vulnerable than others might be, and we have to be cautious and alert to pernicious lobbying from state actors and their proxies who do not wish this country well. That applies to not just a few countries, but quite a significant number.
I am aware, not just because of what I get myself but other Members as well, of attacks that are co-ordinated directly out of St Petersburg on individual Members of this House and the House of Lords, particularly those who have been critical of the Putin regime. The attacks are co-ordinated and are deliberately inciting. They hide behind anonymity and often they are fake accounts. It looks as though 100 people have attacked the individual Member, but that is because there are 100 fake accounts all created by the one person. We do far too little in this House to make sure that that is exposed and made clear.
I have often worried that the Government have repeatedly refused to investigate the Russian activity and determination to try to undermine the political process in this country. I note that this Prime Minister and the previous Prime Minister both said that they had not seen successful attempts to undermine British democracy. I do not know what success means in their minds when they say that. It seems preposterous that they will not investigate.
As the hon. Member for Isle of Wight says, the law courts are a very useful tool for proxies of state actors overseas who want to ensure that any criticism of them is closed down. We have seen several journalists and authors dragged through the courts, at extreme expense, by people with very deep pockets. I am hopeful that the Government will address that in legislation later this year. I also point to some broadcasters, such as Russia Today. I do not think any British politician from any political party should have taken money from Russia Today. It is a scandal that many took many thousands of pounds from Russia Today. All those who did should be completely open about it, because they have effectively and knowingly been not just useful idiots but deliberate agents of a foreign state. The same would apply to other broadcasters from other states, including Iran.
The hon. Member for Isle of Wight rightly mentioned advertising on Facebook. One of the ways in which Russia has sown discord and misinformation around the world is illustrated by the situation in Catalunya, which I am particularly aware of. There they put across all sorts of imagery that was later proven to be completely false. None the less, it got lots of clicks and got everyone very excited and condemning the Spanish Government, even though it was all proven to be untrue. We must take that deliberate attempt to sow discord in western societies very seriously. I have always wanted, and I still want—notwithstanding the objections—to end anonymity on social media. For some reason, people feel able to write things on social media under the cloak of anonymity that they would never think of saying to another person or writing in a letter that they had to put their name to. I think that is cowardice, but it is also disrupting the British democratic system.
I am not sure whether you, Dame Angela, are among the Members of Parliament on the Russian sanctions list. It is quite interesting that none of the Members of the Foreign Affairs Committee who wrote the “Moscow’s Gold” report a few years ago, which is deeply critical of the Russian Government, is on the sanctions list. I can only presume that we are on the hit list instead.
I wrote to the Russian ambassador to make the point that although they are alleging that all these British MPs are Russophobic, we are not Russophobic. We love Russia; we have loved the Russian people, though sometimes the television presenters do make one doubt their sincerity when saying that they love people regardless of their nationality. We are not Russophobic; it is just that we have a beef with the actions of the Russian state under President Putin. The ambassador wrote back to say that the list provided was just one of several sanctions lists that already existed, and that was one that they were now revealing. I can only presume that other people are sanctioned but we do not know about it.
Parliament is particularly vulnerable. I hope the Minister will take that away from this debate. We have hundreds of all-party parliamentary groups. The Committee on Standards, which I chair, has produced a report on this. The head of security here is very concerned, as are the two Speakers, about the vulnerability of the Parliamentary system because of the way that APPGs are funded, sometimes directly by foreign Governments and sometimes indirectly, and sometimes probably not as accountably as we would like. Some countries forbid members of their legislative body from taking any form of hospitality of any kind, let alone several thousand pounds-worth of trips abroad, from a foreign state. We should consider that.
I believe that it is important that British Members of Parliament have strong working relationships with Members of Parliaments in other countries, but we should fund that, not let it be funded on an ad hoc basis by other countries who may want to do us harm. I am one of the Members who went to Qatar. I went as a guest of the Qatari Government because I wanted to argue with them, really, about the way they intend to hold the World cup. I note that a large number of Members have been taken to Qatar at great expense by the Qatari Government over the past year. Is that appropriate? In the end, I wish I had not gone on that trip. I suspect we need to address that issue. Incidentally, the director of security in Parliament told us that the biggest anxiety was that these groups are not necessarily funded directly by the Governments, but by their proxies, through third, fourth or fifth parties. We need to tackle that.
In the US, Congress has to produce an annual report on the lobbying of Congress by foreign actors. Why do we not do that here? One of the House’s Committees should produce an annual report to Government, perhaps with the assistance of Government, on foreign states’ actions in lobbying Parliament.
I also think we ought to have a new offence of aiding and abetting a foreign state as a Member of Parliament or as a peer. I am not quite sure how I am going to word this—I hope somebody is going to help me with it; the Clerks are normally very good—but I think that there should be an amendment to clause 3 of the National Security Bill to address that.
My argument is that lobbying must always be in the open. Transparency is how we ensure that there is nothing pernicious, vicious or inappropriate going on. Ministers should reveal all significant attempts to lobby them in a timely fashion. The Standards Committee has produced a report today stating that we must end the current exemption whereby, if two Members of Parliament go to the same event that is paid for by a foreign Government or by anyone else, a Minister does not have to declare it for months and months and does not have to say how much it cost, but a Back-Bench or Opposition Front-Bench Member has to declare it within 28 days. Surely all Members should be treated equally.
That is why it is important that Ministers should reveal all significant attempts to lobby them, including via hospitality, tickets, dinners, accommodation, holidays, travel and individual meetings. For instance, it is an absolute mystery to me why the UK took so long to sanction Deripaska. Greg Barker—who is, I think, no longer a Member of the House of Lords—was effectively acting as an agent of Deripaska, who is now sanctioned because of his corrupt involvement in the Russian state. However, we did nothing about it. Why was that? I want to know.
What about Abramovich? Why did that take so long? There was even a moment when the Prime Minister though that Abramovich had been sanctioned, but it turned out he had not. I suspect that that was because the Home Office was saying, way back in 2018 and 2019, that Abramovich was a person of interest; in other words, he was dodgy and it did not want him coming to the UK, and therefore it was not going to allow his tier 1 visa to be renewed. However, the Foreign Office refused to sanction him. Was that because of the direct engagement of Abramovich with individual Ministers? I ask the question because we need to know the answer.
Finally, the hon. Member for Isle of Wight is absolutely right about the need for a proper register of lobbyists working on behalf of foreign agents. I do not think someone should be able to simply say that they have lots of clients in this House; they should have to list all clients in both Houses. For my money, I would also say that Arron Banks should have been on that list. Of course, when anybody is on that registered list, there should be a ban on Members of either House engaging with them financially or in any other manner.
We have been naive for far too long. We need to tackle all these issues, especially as they apply to state actors from Russia and China. Otherwise, we will lose the precious democracy that we believe in.
Jim Shannon (Strangford) (DUP)
Thank you, Dame Angela. It is a special privilege to speak in this debate. I thank the hon. Member for Isle of Wight (Bob Seely) for bringing this important issue to our attention and for his knowledge. It is a pleasure to follow the hon. Member for Rhondda (Chris Bryant), who has a deep interest in this matter. Both he and the hon. Member for Isle of Wight bring real knowledge to the debate.
I am someone who sees the benefits of lobbying, as referred to by the hon. Member for Rhondda, in certain circumstances in this place. Lobbying for the right reasons has changed my opinion and opened my eyes to many issues. It has helped to increase my knowledge and better understand subjects, and has provided me with information as a Member of this House.
Seeking to unduly influence a Member changes that. While we must all hold ourselves accountable for decisions, there is a role for restrictions or protections—a term that I would rather see used—to be put in place in this House, which should not point the finger.
On several occasions over the past few years, we have seen the impact that foreign lobbying can have on a democracy and the undue influence of some lobbying, which many Members have highlighted, that probably has its roots in Chinese or Russian politics. While the impact of some of that lobbying may inevitably have been over-emphasised, there is a root of truth that this House has not been untouched by Chinese and Russian influence.
It is a crucial that the UK has a platform to introduce safe lobbying, as there is nothing wrong with lobbying as long as it is done correctly and does not put our democratic process at risk. Democracy is the heart of the United Kingdom of Great Britain and Northern Ireland, so it is great to be here and to discuss how we can strengthen that in a positive fashion.
I thank the hon. Member for Isle of Wight for putting together his briefing on foreign interference. It had much detail and was powerfully put. It provides a real insight into the steps we can take to regulate our lobbying. Lobbying is a key characteristic of politics, domestically and internationally, for foreign agents. The issue lies in lobbying being part of the operation of foreign agents to undermine political institutions. That has been seen many times, not only in relation to China and Russia, but to other countries as well.
Countries such as Australia and the United States of America want to adopt legislation, such as FARA and the Foreign Influence Transparency Scheme Act, that aims to regulate foreign lobbying. It will mean that foreign agents and their proxies will be legally obliged to register themselves and make their activities public knowledge. I look to the Minister for her response about our future plans. Do the Government intend to do something similar to what Australia and the USA have done?
The UK and its respective devolved Administrations are also at risk of foreign interference. We are a leading democracy and, as the hon. Member for Isle of Wight stated in his report,
“a centre for the international finance, legal and media worlds”.
We are very much a kernel—a core—for that. The briefing notes accompanying the 2019 Queen’s Speech stated that the UK would work to
“reduce the threat posed by Hostile State Activity”.
We have seen attempts to manipulate devolution, which the Government confirmed in its own information relating to the Scottish referendum. It is my responsibility to ensure that Northern Ireland is protected against any foreign threat through illegitimate lobbying. Attention must be given to the four Governments within the UK, not just our Westminster Government. I return to my original question to the Minister and ask what action will be taken to ensure that the devolved Administrations —the Northern Ireland Assembly in my case—can have direct contact with the Minister in order to ensure that we can protect and rebuff the groups that are unduly lobbying?
Alongside the debate about lobbying is the issue around social media, which has never been more prominent in political life. Covert digital influence campaigns increase the scope for misleading information when it comes to election time, when foreign influences may pay an instrumental amount of money to portray false information. There are lots of false stories, and the media must address that as well.
Oligarchs, in particular those from Russia and other authoritarian regimes, act in the shadows with no regulation. As the UK is an open society with no legislation to check such things, that leaves us vulnerable to outside interference and cyber-attacks. Russia has used both state and non-state entities to partake in unauthorised activity in the UK. These have been described by the Chief of Defence Staff as the “grey area” between peace and war—how true that is.
Many tools involve military influence, but we must not forget political, economic and social influences as well. Owing to the UK’s lack of legislation, there is little transparency about what is actually illegal and worthy of punishment. The 2014 lobbying Act is narrow and out of date. Does the Minister intend to address that? If so, perhaps a timescale for consultation and ultimate legislative change would be helpful. That should allow for fuller discussion of the steps we can take to protect and preserve the political institutions of the United Kingdom of Great Britain and Northern Ireland.
In conclusion, I welcome ideas for the reform of foreign lobbying in the UK—particularly a law that compels individuals and entities lobbying in the UK on behalf of hostile and authoritarian states to record their activities on a national register so that we know who they are and so the protections that we need and desire can be delivered. The British public have a right to feel protected and deserve to know the full extent of foreign influence in the UK and the devolved institutions of Northern Ireland, Scotland and Wales.
This debate has been helpful, Dame Angela. I thank the hon. Member for Isle of Wight for bringing it forward, and thank others for their contributions. I very much look forward to what the Minister has to say and, indeed, to the shadow Minister’s contribution too.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is good to see you in the Chair, Dame Angela. As I sum up on behalf of my party, I cannot help but feel that this is a very British debate. I am unsure whether anyone here is particularly opposed to better rules for those lobbying on behalf of foreign Governments. The evidence—which the hon. Member for Rhondda (Chris Bryant) has alluded to on many occasions, not only in Westminster Hall but in the main Chamber—that it has damaged the fabric of our society, and of the national security risk, has been clear.
I fully expect the Minister to rise to their feet, acknowledge the issue and the pertinence of the rhetoric deployed by all of us here today, declare that something must be done, and, if they will forgive me, then do absolutely nothing about it. I would be delighted to be proven wrong, but this type of action has been trailed for quite some time without any evidence that we are any closer to either the stricter regulation of lobbying or any sort of foreign agent registration.
Now, that is not to denigrate the quality of any of the contributions made here today—from the hon. Member for Strangford (Jim Shannon), the hon. Member for Rhondda and, indeed, the hon. Member for Isle of Wight (Bob Seely). We did at least agree, I think, on the issues of higher education across these islands. I would say to the higher education sector that it must not only look in the mirror and reflect on what it sees in its relationship with the Communist party of China, but change what it sees.
On my party’s position, our ask is simple: the UK Government must follow the example set by ourcolleagues in the Scottish Government and create a fit-for-purpose lobbying register to improve transparency and accountability. The Lobbying (Scotland) Act 2016 came into full operation in 2018 and was designed to improve transparency of face-to-face lobbying contact between organisations and Members of the Scottish Parliament, members of the Scottish Government—including Scottish Law Officers and junior Scottish Ministers—special advisers, and the permanent secretary of the Scottish Government. Transparency International has called on the UK Government to replicate that and set up a comprehensive lobbying register for the United Kingdom Parliament that includes relevant information, and for the Advisory Committee on Business Appointments be replaced by a statutory body with sufficient authority and resources to regulate all that goes on here.
Members who pay attention to such things will know that my parliamentary group wrote to the Government’s anti-corruption tsar, the hon. Member for Weston-super-Mare (John Penrose), asking him to rapidly reform lobbying rules following the second invasion of Ukraine by the Russian Federation. When that secondary invasion began in February, as some Members have already intimated, we had a dismal roll-call—I will not mention any by name, Dame Angela—of the assorted MPs, Lords, former MPs, former civil servants, and the like, who had sold their expertise to firms linked to the Russian state. While it was certainly the most dismal example, anyone who had been paying attention—quite a few of them are in this room right now—had been warning about the dangers of allowing that sort of activity to go on unchecked.
I think the hon. Member for Aberavon (Stephen Kinnock) mentioned the Russia report, but it is vital that we do not get somehow embarrassed about bringing it up. The findings of this report, from a cross-party Committee with a Conservative majority, were clear: the arrival of Russian money resulted in a growth industry of enablers—individuals and organisations who manage and lobby for the Russian elite in the United Kingdom. Yet nothing—absolutely hee-haw, as I say in my part of the world—was done to implement it.
The biggest fear, especially when we are about to listen to a Minister smother—forgive me—an attempt at a proper legal framework for lobbyists with kindness, is that if we are unable to take full responsibility for those who lobby on behalf of a hostile regime such as the Russian Federation, then I wonder, really, who is going to take responsibility when this sort of thing happens again and again. Because we not just talking about Russia, as many here have alluded to today; plenty of people in debate have mentioned “communist” China. The resources and the global reach of Chinese Communist party-linked companies simply dwarf that of those from the Russian Federation. It might not be the most agreeable thing to say, but I think that one of them happens to be the Asian Infrastructure Investment Bank, which the UK led in setting up. While China is not necessarily a hostile state—I agree with my friend the hon. Member for Strangford—we certainly know that it is a hostile, anti-democratic economic and political competitor.
My biggest worry about those who work on behalf of states that are also nominally neutral, which I think the hon. Member for Isle of Wight alluded to—
Martin Docherty-Hughes
I will not disagree with the hon. Member on that, but I go back to the point I was about to make about states that are nominally neutral or even allied to the UK and how we hold them to account. I am thinking particularly about the Gulf states—nominally allies, yet ones whose Governments have shown themselves capable and willing to act in the most heinous ways on the territory of ostensible allies.
The jamboree for the real estate, legal and general enablers of Russian money might have ended, but let us be in no doubt: it is going to keep rolling on for all the rest of them, allies or not. The increasing gentrification and sterility of much of central London will become emblematic of the hollowing out of UK institutions on behalf of this global capital.
If that sounds bleak, that is because it is. But let me end with one final appeal to the Minister. It would give even this inveterate Scottish nationalist great joy to see our devolved Administrations lead the UK in implementing a proper system of lobbying regulation, which I alluded to earlier in my speech; but I am afraid, Dame Angela, that I will not be holding my breath.
Fleur Anderson (Putney) (Lab)
It is a pleasure to serve under your chairship, Dame Angela. I congratulate the hon. Member for Isle of Wight (Bob Seely) on securing this timely debate, ahead of future debates on the National Security Bill. There is much in his remarks that I and my colleagues would agree with. I absolutely share his concern at the insidious and growing influence of hostile state actors on these shores and in these very corridors, here in Westminster.
I agree with my hon. Friend the Member for Rhondda (Chris Bryant), who pointed out that we must be alert to pernicious lobbying from countries, but that not all lobbying is suspect, as the hon. Member for Strangford (Jim Shannon) also said. Much lobbying is necessary. Experts really do help us to understand the issues that we are making decisions on and can bring together constituents from across the country to tell us their views. I used to work for Christian Aid and WaterAid and was involved in coming to talk to Members of Parliament. What we need is an open and transparent system that we can trust and that does not give hostile actors undue influence or allow them to undermine that system. As my hon. Friend said, this debate should be enlarged to include not just Parliament but law courts, broadcasters, social media and all-party parliamentary groups.
We have heard myriad examples today from colleagues of how deeply foreign states have penetrated British political life and our economy. I am sure there are far more that we do not know about, which is really what much of this debate is about. From public relations firms employed by Russia to help individuals to avoid EU sanctions, to lobbyists who advocate for Kremlin-connected Russian clients and a whole host of pinstripe-clad enablers of states with interests and values counter to our own, foreign interference is a multibillion-dollar industry.
A particularly disturbing sector of this industry is lawfare, as Members have pointed out. Our courtrooms are not battlefields to be used to silence and destroy activists, journalists and politicians who are brave enough to shine a light on the places that foreign actors do not want anyone to see—or they should not be. The UK is becoming the global capital of the lawfare industry. According to a survey of 63 journalists in 41 countries, more cases were brought against journalists in the UK than in America and Europe combined. I hope that the Minister will address that later.
We also need to have a conversation about all-party parliamentary groups. Questions must be asked about their regulation and reform, and whether they are acting as conduits for improper access by lobbyists and hostile foreign states. Again, APPGs are useful; indeed, they are a really valuable part of our parliamentary system. However, we need to make sure that they are open, transparent and not being used by malign actors, in order for the system to be maintained and not brought into disrepute; otherwise, down the line, we may face having to stop this way of parliamentarians meeting to discuss important issues.
The hon. Member for Isle of Wight has put forward a number of practical proposals, some of which Labour has already supported or proposed. For instance, Labour would expand the scope of the statutory register of lobbyists to cover those who commercially lobby Government as well as consultant lobbyists, who are also known as in-house lobbyists. I agree that more definition is needed, because of the continuum that the hon. Gentleman talked about. We should not just give up on having a register because we cannot define things; we need definition, a register, and then for that register to be used.
In the hon. Gentleman’s report on foreign interference, which I have read, he rightly called for new legislation to curtail the influence of lobbyists during election times. That is quite right, which is why the Opposition have called for it too. I was on the Elections Bill Committee last year, and the shadow Front Benchers tabled a new clause that would have required the Government to consider measures to address foreign interference in elections, including the Office for Security and Counter-Terrorism taking the policy lead for protecting democracy and the operational role being given to MI5. Labour also proposed measures to stop overseas electors from being able to donate to political parties here in the UK, noting the concerns of the Russia report about the influence of foreign money in our politics.
Stephen Kinnock
My hon. Friend is making an excellent speech. Does she agree that it seems that there is a loophole, because the National Crime Agency and the Electoral Commission both say that they will not look into the real source of financial donations to political parties? They say that it is permissible if a donation has come from a British citizen or somebody who is on the electoral roll, and then they do not look into where the money may actually have come from. If a British citizen has received a large sum of money from someone who is not on the British electoral roll, the agencies do not look into the source of that money. What would my hon. Friend say needs to happen to close that loophole, which seems to be a massive gaping hole in our defences?
Fleur Anderson
I agree with my hon. Friend that more needs to be done about that clear loophole. The register that we are talking about needs to apply not only to Members once they are elected but to the time before elections, or that issue needs to be addressed with a separate register. It must be very clear where the money comes from. Too often, in the whole of this system, UK entities can be used as a cover for foreign entities. That is the problem we have now and it is not being addressed. I hope that the National Security Bill will address it; if it does not, it will not be addressing our national security issues.
For two years now, Labour has been calling consistently for the Government to implement in full the recommendations of the Russia report of the Intelligence and Security Committee, which was published in July 2020. However, those recommendations remain unimplemented.
Malign Russian money cannot continue to pollute our economy, our politics and our democratic institutions. However, I say to the hon. Member for Isle of Wight that I am afraid that his own Government’s record in this area suggests that they do not share our concerns. His party has accepted millions of pounds in donations from Russian-linked money in recent years.
Take Ehud Sheleg, for example, who has been mentioned already. He is a wealthy London art dealer whose most recent position was as the Conservative party’s treasurer. In February 2018, Mr Sheleg donated $630,000 to the Conservative party. The money was part of a fundraising blitz that helped to propel the Prime Minister to victory in 2019. However, Barclays bank has established that the money originated in a Russian account of Mr Sheleg’s father-in-law, Sergei Kopytov, who was once a senior politician in a previous pro-Kremlin Government in Ukraine. Again, it is a question of where the money comes from, which involves looking behind the initial donors.
There is the case of financier Lubov Chernukhin. Ms Chernukhin has donated £700,000 to the Conservative party, and in March, the Electoral Commission confirmed that the party had accepted another £80,000 from her. Chernukhin is the wife of a former Russian deputy Finance Minister under Vladimir Putin. She has now donated almost £2 million to the Conservatives, almost £800,000 of that during the Prime Minister’s leadership. The Prime Minister himself—I notified him that he would be mentioned—once played a game of tennis with the wife of a Russian former Minister in exchange for a $270,000 donation.
Successive Conservative Governments have promised for years to clamp down on foreign lobbying and dirty money. We have to ask why it has taken so long to do that. Is it connected to those donations? The Conservatives’ own politics has kept tripping them up.
The Conservative party does not have a monopoly of such connections, but Labour does share the concern so excellently articulated by the hon. Member for Isle of Wight, who introduced the debate, and does take foreign lobbying seriously, as shown by the amendments we tabled to the Elections Bill, which were voted down.
Labour would expand the scope of a statutory register of lobbyists. We would also establish an integrity and ethics commission. That would replace the current failing system and have power to influence the content of the ministerial code, initiate investigations of possible breaches of the code, and impose a range of binding sanctions. We would also ban people from lobbying for five years after leaving public office, and give the commission power to issue penalties for breaking the business appointment rules.
The hon. Member for Isle of Wight is right that foreign lobbying is a problem that must be addressed. The gap in legislation regulating foreign lobbying is threatening the UK’s national interest and its national security. The Conservative Government have paused, delayed and dithered, but now they must take action. I hope to hear from the Minister what that action will be.
The Parliamentary Secretary, Cabinet Office (Mrs Heather Wheeler)
It is a pleasure to serve under your chairmanship, Dame Angela, I think for the first time, and I thank you for the timely opportunity to debate this important topic. I thank in particular my hon. Friend the Member for Isle of Wight (Bob Seely), who introduced the debate, and express my gratitude to the good number of Members who are present today for their active participation in the debate.
As several Members have noted, the UK is a vibrant, international, open and welcoming country with which to do business. The Conservative Government will continue to welcome foreign investment and business to this country. However, in order to protect that openness and vibrancy, it is critical that we have robust measures to provide transparency on legitimate lobbying and have powerful tools to hand to deter illicit or harmful activity when that arises. To ensure transparency of legitimate lobbying activity, the Government regularly publish details of ministerial meetings with third parties, so everyone can see who Ministers meet with, and about what.
On illicit activity, let me first be clear that we have robust structures in place to identify foreign interference and, where necessary, take proportionate action to mitigate the threat. The recent Christine Lee case is an example of that.
We are going further. The Government have announced their plans to strengthen powers to tackle illicit finance, reduce economic crime and help businesses to grow. As noted in the Queen’s Speech, the Government will bring forward the economic crime and corporate transparency Bill, which will include measures to reform the role of Companies House and improve transparency over UK companies.
Martin Docherty-Hughes
Will the Minister confirm whether there will be an additional commitment from the Government to reform Scottish limited partnerships, which are a valuable conduit for dark money coming into the UK to undermine our democratic process?
Mrs Wheeler
I thank the hon. Gentleman for his pertinent question, and we will write to him with an answer to it.
The legislation will include measures to reform the role of Companies House and improve transparency with respect to all UK companies, and it will build on measures in the Economic Crime (Transparency and Enforcement) Act 2022, which was passed in March, to establish a new register of overseas entities, requiring those behind foreign companies who own UK property to reveal their identity.
Furthermore, as has been stated several times today, the National Security Bill, which was introduced to the House on 11 May, will provide our law enforcement and intelligence agencies with new offences, tools and powers to detect, deter and disrupt threats from those acting on behalf of foreign states with a harmful purpose in the UK, such as seeking by illegitimate means to influence public figures or target our democratic way of life. As my hon. Friend the Member for Isle of Wight helpfully mentioned, the Government have made it clear that there is a threat and they are seeking to address it.
Mr Steve Baker
During the course of the debate, I have checked the website of the Security Service, MI5. It defines espionage and concludes the definition as follows:
“It may also involve seeking to influence decision-makers and opinion-formers to benefit the interests of a foreign power.”
That firmly fits within this debate.
The Minister mentioned using illicit means, but could she please be clear? The Security Service does not refer to illicit means, but just “seeking to influence”. The crucial point is this: could MI5 be doing more to help Members of Parliament? The hon. Member for Rhondda (Chris Bryant) referred to people being “ineptly naive”. Is there more that the Security Service could do to brief Members of Parliament about what to look out for if we are to play our part in counter-espionage?
Mrs Wheeler
My hon. Friend makes an interesting point. One or two nights ago, a meeting about security was held for Members, which led to a very wide-ranging conversation. People have taken his point, and I am sure there will be another meeting. I am grateful for his suggestion.
As part of the National Security Bill, the Government will bring forward a foreign influence registration scheme, which will require individuals to register certain arrangements with foreign Governments to deter and disrupt state threats activity in the UK, bringing the UK into line with our allies, such as the USA and Australia, with their FARA and FITSA, as mentioned by my hon. Friend the Member for Isle of Wight.
Bob Seely
It is completely true that, hastened by war, we are now moving in the right direction; two economic crime Bills and the National Security Bill are going to be very positive. However, can the Minister give an indication of whether the Government will have a broad understanding of what constitutes lobbying, or whether they will have a narrow definition that lobbying is done only by “lobbyists”? It is the former, broader understanding of lobbying that would be the biggest help in framing the lobbying elements of the National Security Bill.
Mrs Wheeler
My hon. Friend has come to the kernel. He has put his point on the record, and I am sure the people in the Home Office will have heard his plea.
It is welcome that Parliament is paying close attention to this topic. I congratulate the Committee on Standards on its recent report on APPGs, mentioned today, which notes that improper influence and lobbying by hostile states is a key threat facing APPGs today. I welcome that report but, of course, it is a matter for the House to decide on the rules governing APPGs. The Government welcome any approaches that mitigate the risks.
I also want to confirm, with regard to foreign lobbying, that a business or organisation undertaking consultant lobbying on behalf of a Government outside the UK or an international organisation would be required to register and declare that Government or organisation as a client. To answer the right hon. Member for Rhondda—
Mrs Wheeler
Well, it is only a matter of time, I am sure. Regarding the Home Office report, I can confirm that the Home Secretary will provide an update imminently, in due course.
Mrs Wheeler
It is both.
Members have taken so much interest in the debate, and I appreciate the level and depth of information that they have brought to it.
Jim Shannon
I asked a question about contact with the regional devolved Administrations, in particular the Northern Ireland Assembly, regarding those in privileged positions, to ensure that the protocol and protections that will happen here can filter out to the regional devolved Administrations.
Mrs Wheeler
The hon. Gentleman is absolutely right. We must work in close conjunction with the devolved Assemblies on anything that happens in the UK Parliament.
Martin Docherty-Hughes
I hope that is reciprocated, and that things come from the devolved Administrations to this place. The Scottish Government already have the Lobbying (Scotland) Act 2016, which was implemented in 2018. I hope the Minister will listen to them on how that has impacted lobbying north of the border.
Mrs Wheeler
Indeed. That is a very fair point, and I am sure the Home Office will have heard it. To conclude—
Chris Bryant
We have a few minutes, so we might as well take them up. I will intervene twice, if the Minister lets me. The Committee on Standards has said that at the moment some Members chair an awful lot of APPGs for foreign territories. We have wondered whether we should not have a limit so that a Member is allowed to chair, say, only six or 10—certainly not 28. Perhaps it would be a good idea if Members were not able to receive any financial support from foreign Governments. Would the Government support those two measures?
Chris Bryant
I shall try another one. The hon. Member for Wycombe (Mr Baker) made a really important point, which is that most hon. Members have no understanding of whether somebody who comes through the door is operating on behalf of a foreign state. Of course it is up to us to make our own judgment calls, but there probably ought to be a means for a Member to ascertain confidentially whether the person they are dealing with is a person of concern to the Government. The Minister will not be able to answer that today, but will she take away the serious point that the hon. Gentleman makes?
Mrs Wheeler
I will take that away and reflect on it. That is a perfectly reasonable question.
Mr Steve Baker
Just as a point of information, there is a leaflet available to Members of Parliament—I think it is A5, folded over; a very short booklet—from the Security Service, which tells them what to look out for when they are targeted by foreign intelligence services. I hope all Members will take the opportunity to get one from the Vote Office.
Mrs Wheeler
This debate is giving us all more information than we had an hour and a half ago. That is very good news.
Thank you very much for chairing this debate so well, Dame Angela. I thank all Members for their contributions, and I wish everybody a good day.
Stoke-on-Trent: Video Games Enterprise Zone
(2 years, 5 months ago)
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Dame Angela Eagle (in the Chair)
I will call Jonathan Gullis to move the motion, and I will then call the Minister to respond. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.
Jonathan Gullis (Stoke-on-Trent North) (Con)
I beg to move,
That this House has considered the potential merits of a video games enterprise zone in Stoke-on-Trent.
It is a pleasure to serve under your chairship, Dame Angela. I am delighted to be joined by my fellow Stoke-on-Trent Members of Parliament for the debate, as well as by the Minister—although she may feel that she has drawn the short straw in dealing with the combined might of the Stoke mafia.
In 2019, during the historic general election campaign, I first raised the idea of Silicon Stoke—a bright new future for our great city, which was once the heart of this country’s industrial revolution. I believe we have a huge opportunity in Stoke-on-Trent to be at the forefront of the new revolution, which will be digital. Having set out a vision for what Silicon Stoke could mean for the Potteries, I am incredibly grateful to Councillor Abi Brown and her city director, John Rouse, for buying into the idea. Since then, we have been united in promoting our vision for a Silicon Stoke, and we have taken it forward by setting up the Silicon Stoke board to create and drive progress. We have published our Silicon Stoke prospectus, setting out how Silicon Stoke could transform our city and local economy. Our prospectus sets out a vision in which Stoke-on-Trent can stand alongside the most hi-tech smart cities of the world.
In the same vein as Leamington Spa, which has its Silicon Spa down the road, we believe that Stoke-on-Trent has a massive opportunity to become a hub for the UK video games industry, as well as for digital and creative jobs more broadly. There is a huge prize waiting for us if we can make this a reality.
Jack Brereton (Stoke-on-Trent South) (Con)
I congratulate my hon. Friend on securing this excellent debate. We in Stoke-on-Trent know that we are the best connected for gigabit fibre broadband in the whole UK. We now have absolutely fantastic connectivity—better than any city in the country—and are putting massive investment into skills, including gaming skills. We also have much cheaper office space than almost any other city in the country. Does my hon. Friend agree that our city is the perfect location for these industries to move to and create the jobs we need to level up places such as Stoke-on-Trent?
Jonathan Gullis
I could not agree more with my hon. Friend, who is Stoke-on-Trent-born and bred. He is doing his city proud in representing it. There are so many fantastic reasons why Stoke-on-Trent is the right location for these industries, and I will discuss the gigabit installation that was provided by VX Fiber and Stoke-on-Trent City Council, with funding from the Department for Digital, Culture, Media and Sport that came under budget. We sent £600,000 back to DCMS because we are that efficient in Stoke-on-Trent—I look forward to boasting about that later.
The gaming industry is one of the most exciting sectors of the worldwide economy and it is growing year on year. It is far from the niche hobby that it used to be, and it now dwarfs the value of other entertainment media. The global market for video games is huge: approximately 3 billion people play games, and the market is worth around $180 billion. In the UK alone, there are more than 32 million players, and the domestic market for video games reached a record £7 billion in 2020.
Unlike other sectors, video games have been pandemic-proof. Last year, UK games revenue was up by 32% compared with 2019. Research by the international game developers’ association, TIGA, shows that between April 2020 and December 2021, the game development sector’s annual contribution to UK gross domestic product increased from £2.2 billion to £2.9 billion.
We should be proud that the UK is already a world leader in this area, with well-known developers such as Rockstar North in Scotland and Codemasters in Leamington Spa putting out some of the best known games, such as the Grand Theft Auto series. The industry is immensely valuable, and offers fantastic opportunities that are well paid, satisfying and future-proofed. About 80% of the games development workforce is qualified to degree level or above, and Rockstar alone has more than 650 staff in its headquarters in Barclay House in Edinburgh. TIGA has revealed that between April 2020 and December 2021, the number of creative staff in studios surged by almost 25%, and by an annualised rate of 14.7%, from 16,836 to 20,975 full-time and full-time equivalent staff. Additionally, the number of jobs indirectly supported by studios rose from 30,781 to 38,348.
The video games industry is also very much in line with the levelling-up agenda. The industry supports economic growth in clusters throughout the UK, with approximately 80% of the workforce based outside London. The UK has the largest games development workforce in Europe. In the era of global Britain, games development also offers us a fantastic chance to showcase the UK to the world. Games development is hugely export focused. with around 95% of games studios exporting at least some of their content.
Not only is the market for video games huge and ever growing, but there is a raft of media produced using the same techniques and technology. For example, Disney’s recent smash hit series, “The Mandalorian”, was produced using Epic’s Unreal Engine, which is one of the platforms that developers use to make games. Silicon Stoke is not just about games development; we very much hope it will propel Stoke-on-Trent to the forefront of other digital and creative sectors as well.
Jo Gideon (Stoke-on-Trent Central) (Con)
My hon. Friend makes a strong case for the video games enterprise zone. Our city is looking to attract the best creative businesses as part of Silicon Stoke. Already the pathways for future employment have been created through the work of the university, and the new digital and creative hub at Stoke-on-Trent College, with courses in virtual reality, 3D printing and drone technology. Creative company Carse & Waterman, which specialises in animated content using green screen and computer-generated imagery, reaches out to schools in our city to enthuse the next generation. Does my hon. Friend agree that we now need to incentivise more employers to develop our Silicon Stoke ambitions?
Jonathan Gullis
My hon. Friend is a doughty champion for the people and businesses of Stoke-on-Trent Central. I have had the pleasure of meeting the award-winning animators of Carse & Waterman, who have even worked on “Ant and Dec’s Saturday Night Takeaway.”
I know that my hon. Friend took the Chief Secretary to the Treasury to see the new technological hub at the Cauldon campus of Stoke-on-Trent College in her constituency. She is absolutely right that it is about incentivisation. As my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) said, we have the office space, the digital fibre connectivity, and the college and university-level education. All the infrastructure is there. What we need is for the Government to send a big message to the sector that Stoke-on-Trent should be its home, because there is no reason why it should not. With the exciting e-sports potential of the indoor arena—the only one that would be in existence outside London—I cannot think of a more exciting place than Stoke for the games industry to thrive.
The plan is for Stoke-on-Trent, which fired the flames of the industrial revolution and is famed for its coalmining and ceramics heritage, to be at the heart of the new digital revolution. What does Silicon Stoke mean in reality? As we set out in our Silicon Stoke prospectus, it means making Stoke-on-Trent the most digitally advanced city in the UK, achieving once again the renown it already enjoys for ceramics—a small but mighty city, punching way above its weight in the national economy. That will be achieved through a mixture of digital infrastructure, skills and securing opportunities for our home-grown talent to stay in Stoke-on-Trent and establish the Potteries as the best place in the UK to work in video games.
Harnessing the power of our city-wide full-fibre network and 5G data, we will: expand the provision of digital skills with the establishment of a full-fibre academy and by ensuring that every school is connected to the full-fibre network; grow the small and medium-sized enterprises digital sector, with support from Stoke-on-Trent City Council and the UK’s leading video games university, Staffordshire University; maximise the opportunity to deploy internet of things technology in our existing manufacturing sector; transform health and social care through improved digital connectivity; integrate smart technology into our city’s energy and transport infrastructure; and expand our reach as a leading hub of video games development and digital production, cementing our status as a leader in the sector with the construction of a specialist e-sports arena in our city centre.
Let me set out just one example of how we are going to realise this ambition and make Stoke-on-Trent the main character in the UK’s digital story. Since December 2021, the Potteries Educational Trust has been running a digital schoolhouse across the city. UK Interactive Entertainment’s digital schoolhouse is a national not-for-profit programme that provides primary schools with an opportunity to experience free creative computing workshops. The programme is supported by large gaming companies such as Nintendo, PlayStation and Sega. The trust has been offering primary schools across the city a free day of programming workshops: 17 primary schools have taken up the offer, with 1,694 pupils benefitting from 16,311 hours of digital enrichment. Staff are also benefiting, with 93 hours of staff continuing professional development delivered.
To further our ambition to establish a new digital cluster, Stoke-on-Trent City Council has commissioned a gaming report from TIGA—the network for games developers and digital publishers, and the trade association representing the video games industry—with Staffordshire University. Overseen by Dr Richard Wilson, who was kind enough to share his thoughts on Silicon Stoke in advance of today’s debate, the report will set out how we can grow the video games industry in Stoke-on-Trent. I look forward to presenting the report, with my hon. Friend the Member for Stoke-on-Trent South, to the Minister in the near future.
Having spoken to Dr Wilson, I suggest that we can grow a video games cluster in Stoke-in-Trent in the following ways. The Minister might want to take notes, because this is where our asks come in. First, building on the success of the video games tax relief, which was first introduced in 2014 and has led to average growth in industry headcount of almost 10% a year, the Government should raise the rate of that relief to match Ireland’s planned 32% rate. TIGA research shows that increasing the rate of video games tax relief from 25% to 32% would yield nearly 1,500 additional skilled development jobs, more than 2,700 indirect jobs and almost £200 million in additional GDP contribution per annum by 2025. Increasing the rate of video games tax relief would enhance the environment for making games in the UK and therefore indirectly support a games cluster in Stoke-on-Trent.
Secondly, the Government should introduce a video games investment fund. Difficulty accessing capital has consistently been one of the top factors holding back many games developers in the UK. The UK Government should introduce a video games investment fund to provide pound-for-pound match funding, up to a maximum of £500,000, for original intellectual property game projects. A video games investment fund would be able to support start-up studios and small studios, including in Stoke-on-Trent. Currently, no dedicated seed funding schemes are available to support start-ups in the games industry in the area, although the UK games fund, based in Dundee, does provide prototype funding of £25,000 for small studios. Research from TIGA and Games Investor Consulting has estimated that introducing a video games investment fund would, between 2021 and 2025, add £72 million in additional tax receipts for Her Majesty’s Revenue and Customs, while costing £26.5 million. In terms of yield, that is a 170% return on investment.
Lastly, we must enable Staffordshire University to support start-up studios. Other successful games clusters have that link already. For example, Abertay University in Dundee has a strong connection with local industry and operates the InGAME programme, which provides research and development funding to games businesses. In a similar manner, we must enhance the links between industry, higher education and local government locally in the Potteries. One way to do that would be through a new video games enterprise zone for Stoke-on-Trent. Since their introduction in 2012, enterprise zones have been a major success across the country, and there are now 48 nationwide. In 2015 the Government reported that the enterprise zones had created 19,000 new jobs and attracted £2.2 billion of private investment and more than 500 new businesses.
Locally, we have our own hugely successful enterprise zone: the Ceramic Valley enterprise zone. Located along the strategic A500 corridor and launched in 2016, Ceramic Valley has attracted thousands of new jobs, from JCB, Jaguar Land Rover and Amazon, all creating jobs locally. Backed by £3.4 million of investment by Stoke-on-Trent City Council and the benefits that come with enterprise zone status—including a business rates discount worth up to £275,000 over five years for businesses that move to one—Ceramic Valley has been a huge success for our city.
By setting up a new enterprise zone focused on games and interactive content, we could create a unique opportunity to put Silicon Stoke at the heart of the UK’s digital economy. The success of that kind of policy at national level is clear in the massive boom in the UK video games industry since 2014, when the video games tax relief was brought in. Having a similar tax break for local companies via a new enterprise zone would have a similar effect, turbocharging our local games industry. That enterprise zone could take the form of a more formal partnership with Staffordshire University. For example, there are already a number of university enterprise zones across the country.
Originally, four pilots were backed by £15 million of funding from the Department for Business, Energy and Industrial Strategy, with the universities required to match-raise £2 of match funding for every £1 of Government investment. The pilot schemes will be fully evaluated at the end of the scheme in 2023, but an interim report from 2018 found that the university enterprise zones had been successful in attracting new businesses on to sites at the universities, with tenants confirming that the university enterprise zone had led to a positive impact on their business activities. The four pilot university enterprise zones were set up specifically to attract high-tech firms to locate near universities.
We should adopt a similar model, but instead of focusing on high-tech firms it should focus on complementing what is already going on in Silicon Stoke. Potentially linked in with the existing centre of excellence that is Staffordshire University, which has a strong relationship with Epic Games, the creator of Fortnite, that initiative could rocket-jump Stoke-on-Trent’s ever growing digital offer. Staffordshire University has been exploring how to support video games businesses to set up locally, and a new video games enterprise zone could be the final piece in that jigsaw.
To some, Stoke-on-Trent may not seem like the natural choice for a burgeoning video games and digital cluster. However, as was written in The Guardian only recently, “something is stirring” in the shadows of our industrial heritage, and the scene is already set for us to become the heart of the UK’s video games sector.
Stoke-on-Trent is one of the new Zoom towns or cities where remote and flexible working is king. According to the recruit company Indeed, we are the third biggest growth area of that kind of work. We have an incredibly strong base to build on. We were one of the first cities in the UK to benefit from VX Fiber’s fibre-to-the-premises open access model, which brought gigabit-capable internet to the doorstep of homes across our great city. VX Fiber has hooked up just over 50% of homes across the city, and aims to have 150,000 serviced by the end of 2023. That £50 million network, in which the Government invested £9.2 million, will unleash a staggering £625 million into our local economy and form the bedrock of our digital -revolution.
Thanks to our successful levelling-up funding bid—again, done with my hon. Friends the Members for Stoke-on-Trent Central (Jo Gideon) and for Stoke-on-Trent South—Stoke will become the first city in the UK to have a stadium that specialises in e-sports. We will be able to make the most of the ever-growing e-sports market, which has a global audience of 500 million people.
Based in the constituency of my hon. Friend the Member for Stoke-on-Trent Central, the City of Stoke-on-Trent Sixth Form College was one of the first 44 trailblazer colleges that started teaching the new digital production, design and development T-level. It is one of the Government’s computing hubs, driving forward the teaching of computing in schools and colleges across the country.
Stoke-on-Trent College has formed a partnership with VX Fiber to open a full-fibre academy, which will offer courses on a huge range of digital skills, from motion capture, software engineering and drone mapping to underground radar surveying and electrical equipment maintenance and testing. As my hon. Friend the Member for Stoke-on-Trent Central pointed out, the college has also recently opened its new digital and creative hub at its Cauldon campus, part-funded by the Stoke-on-Trent and Staffordshire LEP with £250,000 to create sector-leading digital and creative learning facilities.
Staffordshire University, on our doorstep, is the leading university for video games in the country. The university set up its first video games course in 2004, with 55 students enrolled; it now offers roughly 20 different courses in this sector, with more than 2,000 students enrolled. The university is internationally recognised and ranks as the 13th best institution in the world for games design and development. Talent trained in Stoke-on-Trent has gone on to play a big role in the UK’s leading games studios. Some 31% of Codemasters’s staff come from Staffordshire University, while 20% of Rare’s staff are Staffordshire alumni and 13% of the staff at powerhouse studio Rockstar Games were trained in Staffordshire.
We now need to keep that talent in Stoke-on-Trent and avoid the brain drain. It is great that the games industry in the west midlands has already seen the biggest growth in the UK of 132% between 2017 and 2019, much of which is based in Birmingham and Leamington Spa. The next step is to get the games industry to take off in Stoke-on-Trent and Staffordshire. With our almost unrivalled digital infrastructure and local skills base, we make the perfect location for the UK’s next video games cluster.
I am pleased to say that, on the back of this strong foundation, businesses are taking note. With the size of our local talent pool and the shortage of talent elsewhere in the country, we are already starting to see companies set up in Stoke-on-Trent. Last year, the leading advertising agency VCCP opened a new office, in partnership with one of our leading digital businesses, Carse & Waterman, and staff from VCCP London have been working locally to raise awareness and provide training, work experience, mentoring and paid internships.
In conclusion, we have the perfect building blocks to make Silicon Stoke a reality. We have the top-notch infrastructure needed to capitalise on the innumerable opportunities the new digital revolution will bring. We have a long conveyor belt of locally trained talent, which starts in our primary schools—thanks to the Digital Schoolhouse—and continues all the way to Staffordshire University. We have a clear vision of how to seize this opportunity and the backing of the fantastic leadership team on Stoke-on-Trent City Council for our vision of Silicon Stoke. Levelling up is key to most video games, and with the extra boost a video games enterprise zone can provide, video games will be key to levelling up Stoke-on-Trent.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
Thank you for your chairing this debate, Dame Angela. I am grateful to my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) for highlighting the important role that the video games industry plays in supporting very high-skilled jobs and levelling up across the UK. I appreciate the characteristic forcefulness with which he makes the case for his exciting vision of Silicon Stoke.
As my hon. Friend says, something is stirring in Stoke. It is a fantastic city with a very bright future and, through our investments in gigabit broadband—another area that I lead on—it is one of the best connected places in the UK. It is represented by three MPs who have great belief in and passion for the place they represent, and it has great local leadership from Councillor Abi Brown and one of our nation’s youngest Lord Mayors, Councillor Hussain.
I am glad to see Stoke’s three MPs in the Chamber—they are giving Teesside a run for its money as a powerful parliamentary lobby. They are united in their efforts to keep building on the city’s success story and proud history in the creative industries. I pay tribute to my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon) for her close working with Stoke-on-Trent College, Staffordshire University and creative businesses such as Carse & Waterman. I also pay tribute to my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), who was banging and clattering his pottery drum for the city in the dark days of the previous Parliament, long before these two 2019 upstarts came along.
I want to set out how we are supporting the video games sector to build on very strong growth, and how we think video games can contribute to our mission of levelling up the country. I will also talk about the importance of skills in achieving those goals. It is great to hear about the really strong partnership working between local MPs, councillors and educators in Stoke.
Jack Brereton
Can my hon. Friend the Minister think of a possible reason why the video games industry would not locate to Stoke-on-Trent? I cannot think of a single one.
Julia Lopez
I agree. With great digital connectivity and the partnership working between central and local government, there is a great story to tell about Stoke. It is certainly something that I will take back to my Department after the debate, as we look at the initiatives we are focusing on in the creative industries.
The video games sector, as my hon. Friend the Member for Stoke-on-Trent North rightly pointed out, is flourishing. It contributed about £2.8 billion to the UK economy in 2019, and that is reflected in the number of people employed in the sector, which has grown from 13,000 in 2011 to 27,000 in 2019.
The Department for Digital, Culture, Media and Sport is incredibly proud to support the growth of our creative businesses, and we are doing a lot of work to ensure that the games sector, in particular, can thrive. We are putting together a £50 million creative industries programme—a sector vision—as part of our spending review settlement, and I will take away some of the really exciting ideas that have been put forward. That includes up to £18 million invested in the Create Growth programme, which will help high-growth, creative businesses access finance across six regions in England outside London so that they can reach their growth potential. We will be announcing the regions for the Create Growth programme this summer. That builds on the success of our £400 million Creative Scale Up pilot programme, which to date has supported more than 200 businesses across three regions, increasing a total aggregate turnover of £13.5 million.
We have also announced specific support for the video games sector through a £800 million expansion of the UK Games Fund, which will accelerate the growth of the UK games industry. Since 2015, the fund has supported more than 190 early-stage video game development projects, and supported businesses that have the potential to grow and flourish. That builds a strong vibrant SME developer community. I am interested to hear some of the ideas that have been put forward, and I very much encourage small businesses in Stoke to apply for that programme.
My hon. Friend asked what more we can do to support local businesses through tax incentives. Obviously, a lot of this is outside my remit, but we recognise that the future growth of the games sector requires us to maintain our competitive edge in tax reliefs. We must ensure we that continue to be an attractive place to do business, given the global competition. Our games tax relief has strengthened the UK’s reputation as one of the leading destinations across the world to make video games, and it has really worked. Since it was introduced in 2014, it has supported 1,640 games, with UK expenditure of £4.4 billion. In 2020-21, the relief supported the development of 640 games. We have to ensure that we continue to be internationally competitive. We keep all these tax incentives under close review, and I will continue those discussions with the Treasury in advance of any economic statement.
In the 1970s, “Dungeons & Dragons” coined the term “levelling up” for when the player reached certain milestones. Since then, the notion has become a central feature of many popular video games. We take that forward as a mission in our levelling-up agenda. We think the creative industries play a critical role in supporting regions across the UK, and game development has been key, from Sheffield to Leamington Spa, from Newcastle to Bristol, and from Knutsford to Dundee. Some 55% of game development roles are outside London and the south-east, so it truly is a UK-wide industry. Video game clusters are engines for local economic growth and jobs throughout the country. The £39 million Creative Industries Clusters programme, run by the Arts and Humanities Research Council, has supported Dundee’s video games cluster through InGAME. I am keen to look at the lessons we can learn from that to see whether any of them can be applied to Stoke. The funding has created 337 new companies since 2020, and created or safeguarded 477 jobs.
We are committed to continuing that kind of cluster work and I want to see that success replicated in Stoke. It is great to see the investment in the Ceramic Valley enterprise zone and the announcement last week about the £56 million levelling-up funding that will be going to development opportunities in Etruscan Square and the transformation of Stoke’s Spode site.
We are also working extremely hard on digital connectivity. We invested more than £8.5 million through the local full-fibre network project, which has helped to incentivise commercial investment in the region, including the VX Fiber plan, which will be targeting more than 30,000 properties for a gigabit-capable connection. For those not in line for the commercially or publicly funded roll-out, we will be investing more in Project Gigabit. The procurement for Staffordshire, which includes Stoke, is anticipated to cover another 70,800 premises and will be taking place later this year.
Alongside robust growth and relentless innovation, we need to make sure that the skills are in place to help the video games industry reach its full potential. That is why we are working very closely with some of the bodies that my hon. Friend the Member for Stoke-on-Trent North mentioned. Our creative careers programme has given 27,000 young people hands-on experience with industry, through immersive events and work experience opportunities. The next phase of that programme, with a three-year grant competition launched this month, will launch fully later this year and do even more to support people, particularly those from lower socioeconomic backgrounds.
Specialist skills are needed to support video games, from development and production to art and sound design. In Stoke, there are a range of further and higher education study opportunities in place for routes into the video games industry, from diplomas in games design and programming at Stoke-on-Trent College, to games courses at Staffordshire University and Keele University. I know that Staffordshire University, in particular, provides an excellent pathway to a career in gaming. The university won the 2021 excellence in university and industry collaboration award from the UK video games industry trade association, TIGA—you say tigger, I say tiger; I am not entirely sure which one is correct, but we should probably call the whole thing off. The award is supported by a partnership with UK Games Fund’s Tranzfuser programme, which supports graduates to take an idea for a game to a playable reality.
Staffordshire University was the first university in the UK to offer a degree in e-sports in 2018, and now offers postgraduate courses too. That shows that Stoke-on-Trent remains committed to becoming a hub for gaming. I am really interested to hear more about the e-gaming stadium and hope to learn more as the proposal is developed.
I am pleased to see that funding from the Build Back Better scheme has been secured to create a virtual reality hub for Stoke-on-Trent College. We continue to invest in important opportunities for young people across the United Kingdom to get the resources and knowledge they need to progress exciting careers in the creative industries. I look forward to working with my hon. Friends to support regional hubs, not only to keep local talent, but to attract new talent from across the country.
As we have already said this morning, Stoke is a great place to do business, with low office rents, great digital connectivity and inspired leadership. With a vision like Silicon Stoke, there is a really exciting future that we can build here. I will take away some of the comments on tax reliefs. We will continue to work in partnership with local colleges and I want to look at the potential for a creative cluster. With the levelling-up funding in place as well, all kinds of things are going on here. I say to businesses across the UK, “Go to Stoke; it has got inspired parliamentarians who are working very closely with us in Government and with a diligent and energetic local leadership.”
Jonathan Gullis
We would love to welcome the Minister to meet the Silicon Stoke board members, and to have a joint MPs’ roundtable with leading actors in the sector—some are in Stoke and some are not—so we can help get the message out about why Stoke is a great place to be.
Julia Lopez
I thank my hon. Friend for his generous invitation, which I am sure I will be able to take up shortly. I commend him and my hon. Friends the Members for Stoke-on-Trent South and for Stoke-on-Trent Central for their passionate vision for the great city that they represent. I thank them for the debate today.
Question put and agreed to.
Cost of Living: Fiscal Approach
(2 years, 5 months ago)
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Dan Jarvis (Barnsley Central) (Lab)
I beg to move,
That this House has considered the fiscal approach to tackling rises in the cost of living.
It is a pleasure to serve under your chairship, Mr Twigg. I am grateful to see so many Members present, although they appear—almost without exception—to be on the Opposition Benches. It is good to see the Minister and the shadow Minister in their places. I want to put on the record my thanks to Unison, which is working tirelessly to help its members through these toughest of times, and to Anna Birley, for her efforts with the research I will be quoting shortly.
It is not my intention to speak at great length. I am aware that colleagues wish to contribute and I want to ensure they get the opportunity to speak up for their constituents. However, before I begin, I would like to say a few words about the tone of the Government’s response to this crisis—not just for the next 90 minutes, but beyond. This is the most serious issue facing our country. Some of my constituents in Barnsley Central are facing an emergency, and the Government are providing nowhere near enough relief.
I want to share the words of a working single mum who contacted my office as an example of the indignity, pain and sacrifice happening up and down the country right now:
“I have not eaten for 2 days due to saving as much as possible for my son to get by until payday. I honestly can understand why so many people feel there is no other way than to end their life. It is humiliating to beg for food.”
She does not want Ministers telling her to work more hours when British workers already put in the longest shifts in Europe. She does not want Ministers telling her to buy non-branded food on the weekly shop when people are so desperate that baby milk is now being security-tagged in supermarkets. Most of all, she does not want Ministers telling her that the Government cannot ease her pain when that is simply not the case.
We are all aware that the effects of this crisis are almost boundless, but I will focus my remarks on the impact on public sector workers. Barnsley was left devastated by the pandemic. The suffering endured will live long in our memory, but so too should the resolve of those who pulled us through—not least our NHS staff, our carers and our educators. They are too often taken for granted, but their true value was there for all to see during our darkest hour. How quick we are to forget.
Unison research found that two in five health workers have had to ask family or friends for financial support in the past year. Roughly the same number are taking on extra work just to make ends meet. Nearly every member of school support staff that Unison surveyed—96%—was worried that they did not have enough cash to cope with the rising cost of living, meaning that a quarter have had to take on a second or, in some cases, third job.
The treatment of those on whom we relied so heavily and so recently is unacceptable and untenable. It is unacceptable because they deserve better. They paid their dues 100 times over, and the Government need to do right by them. It is untenable because it is exacerbating a staffing crisis. Public sector pay is lagging behind the private sector, and the long-term effect could be severely detrimental to services.
Take our NHS as an example. Already, 500 nurses and midwives quit every single week. We are at risk of losing thousands of low-paid staff because of that gulf in pay with the private sector. While Morrisons guarantees workers £10 an hour, there is an ad for a porter on the NHS website for £9.65 an hour. While UPS pays drivers more than £16 an hour, the NHS pays just £10 an hour. Public service workers have already endured more than a decade of pay restraint, and it cannot continue. Public sector workers need a pay rise that reflects not only the cost of living crisis, but their true value to wider society.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Gentleman is making an excellent speech. The public sector workers in my vast, remote constituency underpin life—I am thinking of health workers, people who keep the roads clear and everyone else. Given the sheer distance involved, however, everything we buy up in my part of the world, from a bar of soap to a washing machine, is that much more expensive due to the cost of getting the stuff there. However, these people are on similar rates of pay to those mentioned by the hon. Gentleman. Does he agree that, in addressing this hugely important issue, the remote location of parts of the UK, such as the west country or Wales, should be taken into account?
Dan Jarvis
The hon. Gentleman is fortunate to represent a beautiful part of our country. There are some particular pressures on the rural economy, and he is absolutely right to highlight them.
An NHS worker in Barnsley with two decades of service recently contacted me to say that 63% of the meagre pay rise she received went back into the Treasury coffers because she was on universal credit. She said:
“Having worked throughout the pandemic, pushing my children from pillar to post as after school clubs and usual childcare arrangements were cancelled, so that I could work on the front line—often with COVID positive patients—please can you tell me how the government can morally justify this?”
Perhaps the Minister can try to justify it. If not, will she outline what progress the Treasury has made in making the funds available for a long overdue and much deserved pay rise for those who quite literally risked their lives for us?
Soundings from No. 10 suggest that several Ministers, including the Prime Minister, are pushing for further public service pay restraint, but wage inequality is going through the roof. Research by the High Pay Centre reveals that the ratio of chief executive officer pay to that of medium earners is 63:1—almost doubling in a year—so it is telling whose pay Ministers are willing to restrain. By giving porters in our NHS enough money to put enough food on the table, the Government would protect public finances by avoiding a staffing crisis. Awarding a fair pay rise is morally and, critically, economically the right thing to do. Problems are being caused not just by what our key workers are seeing in their payslips each month, but by what is being taken out by stealth—the cost of working.
I have two suggestions for the Minister, both of which would lessen the burden on key workers and have an immediate impact. The first is about mileage rates. According to a survey by Unison, three out of four health workers who use their cars for work say that the current mileage rates do not cover prices at the pump. Care workers, environmental health inspectors, social workers and community healthcare staff are all out of pocket for doing vital work. Some 9% report that high petrol prices and out-of-date mileage payments mean that they have had to cut down on patient visits. More than half the workers at one South Yorkshire hospital say that mileage payments not covering costs is having a severe financial impact on them.
Her Majesty’s Revenue and Customs is responsible for setting approved mileage rates, but they have not been updated since the 2011-12 tax year. National Joint Council rates for local government workers have not changed since 2010, and NHS rates have not been updated since 2014. Ending the mileage rates freeze would put an average of £150 back in the pockets of workers over the course of a year.
The Minister will no doubt point to the Chancellor’s 5p fuel duty cut, which—let’s be honest—is modest, but some retailers stand accused of failing to pass on half that amount. Petrol and diesel prices are at record highs, so more needs to be done. Will the Minister provide an assurance today that the Treasury will conduct an immediate review of mileage rates—a review that would encourage and include provisions for the NJC and the NHS to do the same?
My second suggestion is on car parking fees. Not everyone can use public transport to get to work. Between a quarter and a third of the healthcare workers Unison spoke to in South Yorkshire use a car because of the lack of public transport. That is what makes reintroducing hospital car parking charges so wrong. Three out of five staff at one South Yorkshire hospital said that the reintroduction of car parking charges will have a high or extremely high impact on them financially.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Does my hon. Friend agree that it would be wise for the Government to look to the Welsh Labour Government, who have scrapped all car parking charges at NHS hospitals in Wales? It is a small measure, taken with a number of others, but supports the hard-working staff he is talking about.
Dan Jarvis
My hon. Friend raises an important point. Yes, I would point to the story that is being told in Wales, and to the benefit and value of Labour in power, leading by example.
I am aware that night shift workers remain exempt from car parking charges. However, it will still cost NHS staff £90 million a year to park. The Government cannot allow the price of parking their car to become the straw that broke the camel’s back for our health workers. Will the Minister provide an assurance that she will meet with ministerial colleagues in the Department of Health and Social Care as soon as possible to find a way to scrap all car parking charges for NHS staff? It is plain for everyone to see that the Government’s plan is not working. When plan A fails, the Government’s reaction should not be to keep repeating the plan, it should be to formulate plan B. Let us see what tomorrow brings.
Finally, the incredible Barnsley Foodbank Partnership supplied 8,000 food parcels in the 12 months to March—that is up 60% on pre-covid levels. Now demand is up and donations are down, as more people struggle with the cost of living crisis. I honestly do not know how some people have got through the last few months, and I dread to think about the sacrifices they will have to make to get through the next few. It does not have to be this way. If the Government grasp the seriousness of what people are facing, and act now, we can avoid a social catastrophe. I hope the Minister will consider the suggestions that I have made, and that others will no doubt make today, in the spirit that they are offered. Our public sector workers—indeed, our entire country—deserve better than this.
Several hon. Members rose—
Derek Twigg (in the Chair)
I am not going to impose a hard and fast rule, but I hope that Members will be considerate and keep their speeches to no more than five minutes. That will ensure that all colleagues get in on the debate. I am going to implement a hard and fast rule on the start time for the wind-up speeches. The SNP spokesperson will start no later than half past three.
David Linden (Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Twigg. As I am sure other Members will do, I pay tribute to the hon. Member for Barnsley Central (Dan Jarvis) for securing this debate and setting the scene so eloquently. I also pay tribute to Unison for its work on the issue. Most of us will have seen the briefing note that came out; I commend everything in it. As the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) made reference to hospital car parking charges, he will be aware that it was the SNP Government in Scotland who lead the way on that—not helped by private finance initiative contracts organised by the previous Scottish Labour Executive. I will not seek to be party political any further in the course of this debate.
Something that I have found difficult over the last few months, particularly since the beginning of the Ukraine crisis, has been people talking about the cost of living crisis as if somehow it is a new thing; it is not a new thing. It has been exacerbated by 12 years of Conservative austerity. In many respects, we are right to call it a crisis, but it is something we have been dealing with for quite some time. I would argue that it is not just a cost of living crisis. Ultimately, at its most fundamental level, it is a low pay crisis.
The UK Government like to talk about the living wage, and I am sure we will hear the Minister do so, but we know that to refer to it as a living wage is to inadvertently mislead the House. It is not a real living wage. It does not reflect the true cost of living for many of our constituents, and it is nowhere near the benchmark set by the Living Wage Foundation.
The UK Government must look at whether that real living wage is fit for purpose. As most of us know from our constituency postbags and surgeries, it is definitely not. The Government should also look at the pay discrimination baked into wage rates in the UK. The reality is that 16-year-old apprentices are still being paid roughly only £4 an hour. A young person on £4 an hour certainly does not get cheaper products at the supermarket as a result of their age. They should not be getting a lower rate of pay.
There are other things we can do. We should absolutely look at a windfall tax. That has become incredibly topical in this place, with people talking about putting a windfall tax on the likes of Shell and BP. I would like them to pay a windfall tax. There is no doubt that they are doing immensely well out of the current crisis. Why not also consider an additional windfall tax on supermarkets and Amazon? We know that the future of work is changing and that our high streets are struggling very much. That is a natural consequence of consumers using big, out-of-town supermarkets and getting goods delivered from Amazon. Given that they are doing very well out of this, perhaps we should consider putting a windfall tax on them as well.
The UK Government should also increase benefits in line with inflation. I was really disappointed when they legislated for a real-terms cut to benefits earlier this year. The people whose benefits are being cut are among the poorest and most vulnerable in society. This is no time to leave them behind. They do not have the disposable income to make a slightly more difficult choice at the supermarket. Let us increase benefits in line with inflation.
If the Scottish Government, who have a fixed budget, can uprate benefits by 6%—I accept that that is still below inflation—the UK Government, with all of their borrowing powers, should be able to do so, too. In reality, the biggest difference between the UK and the Scottish Government is that the UK just puts it on borrowing.
We should also reinstate the pensions triple lock. Pensioner poverty is on the rise and we do not talk anywhere near enough about it in this House. The fact that we have one of the lowest state pensions in western Europe should be a stain of embarrassment for this Government. They like to go around talking about being a global Britain, while pensioners are literally having to choose between eating and heating. I ask the Minister to reflect on that.
We should also reinstate the £20-a-week uplift to universal credit in the social security system. The Government were right to concede at the beginning of the pandemic that social security was inadequate in its current form. It was inadequate in March 2020, and, by the way, it is still inadequate now. Taking that £20 a week away from families means that they are losing £1,000 a year when they can least afford it.
Jamie Stone
Carers for the elderly, the infirm and the sick are crucial in remote parts of Scotland such as my constituency. I have carers pulling out, giving up and calling it a day right now. I am sure the hon. Gentleman agrees with the hon. Member for Barnsley Central (Dan Jarvis) that we must look again, as a matter of extreme urgency, at—how shall we put it?—payments for carers and the regime for taxation on mileage for them and other health workers who have to travel. It is a crisis right now.
Derek Twigg (in the Chair)
Order. I remind Members who take interventions to bear in mind that I am trying to keep speeches to around five minutes.
David Linden
Thank you, Mr Twigg. I am coming to the end of my remarks. I pay tribute to the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), who is himself a carer. More can be done on mileage, and I certainly echo the calls for HMRC to reform it. The Government need to look again at the carer’s allowance, because it is inadequate, particularly south of the border.
There is one last thing that I would like the Government to reflect on. I appreciate that there are massive ideological differences between me, as someone who believes that the state has a big role to play in people’s lives, and the Government, who undoubtedly do not believe that. However, given that Select Committees are receiving evidence from senior figures that the economy is in an apocalyptic situation, the Government should be considering placing price controls on food. I appreciate that they would not be naturally comfortable doing that, but we cannot end up in a situation where our constituents are not even able to choose between heating and eating and are instead left with nothing at all. I know that that view will be borne out.
In closing, many of my constituents have less than £10 in their bank account. They cannot afford to nip down to the local shop for the most basic provisions. Yet we have a Chancellor, who is responsible for the fiscal approach, who managed to spend £10,000 to nip down to Wales for a Tory gala dinner. That strikes me as the action of someone who is quite out of touch, which might be why we are having this debate today.
Derek Twigg (in the Chair)
I remind Members that you can see on the clock what time it is.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
It is a pleasure to serve under your chairmanship, Mr Twigg.
On Sunday, Michael Lewis, the chief executive of E.ON, announced that 1 million of its customers were already in arrears with their fuel bills. He expects that to rise to half of all its customers—4 million people—by October. The National Institute of Economic and Social Research predicts that more than 1.5 million households will see a rise in food and energy bills that will outstrip their disposable income. That means a quarter of a million more families sliding into destitution. Of course, the Bank of England already expects inflation to reach double figures and fears that a recession is on its way. This situation is unprecedented and it demands urgent action from the Government, but none appears to be forthcoming. I am very grateful to my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing this debate and I hope that the Minister can take away some suggestions for the Chancellor.
I want to focus in particular on the poverty premium. The rising cost of living hits those on the lowest incomes the most, through what is known as the poverty premium, which is a term for the hidden costs of poverty. Why does it exist? There are a number of reasons. Ideas about the fairness of essential products and services are based on an idealised version of the average person as a super-consumer. A super-consumer never becomes ill, always has a steady income that is sufficient to meet their outgoings, is able to understand all terms and conditions, and always has the time, energy and resources to shop around for and find the best deal. Clearly, that is a long way from reality for most people. There is a disconnect between policy makers and regulators, and the everyday experience of poverty and exclusion. This idealised consumer plays a role in that disconnect, as does the growing lack of social mobility, which means that an increasing number of policy and decision makers have no first-hand knowledge of what choices are actually like for someone experiencing hardship.
The ideological belief is that competition can meet all consumer needs and that freedom of choice exists for everybody. Even though we have seen markets fail time and again, with disastrous consequences, this nonsense is still held as an article of faith by the current Government. The question, then, is this: if the market is king, what happens to those people the market does not want? What that means is that policies and regulations are failing to acknowledge reality or to meet the needs of this large section of our population for whom the market does not wish to provide.
The poverty premium means, for example, that if someone cannot afford a direct debit bill for fuel payments and their income is uncertain, they pay more. If they are put on a prepayment meter because of problems paying the bill, they pay more. If they cannot afford to buy items in bulk or take advantage of multi-buy offers, they pay more. If they have an insecure income or a non-salaried job and they need a loan or credit card, they pay more. If they live in a deprived area and need car insurance to get to work, they pay more. That all adds up to extra costs that have a huge impact on those living in low-income households.
A study by Fair By Design shows that some households in places such as Hull face a poverty premium of £490. That is equivalent to 14 weeks of shopping—at least it was at the time of the study, but we expect that that sum will only have gone up. We can guarantee that, with inflation rising, the poverty premium is increasing all the time, such that the amount of food that people can buy is decreasing.
Whenever solutions to the poverty premium are proposed, or whenever questions are raised, the buck is passed between different Government Departments and regulators, and we go back to the earlier point—namely, that the market will provide. However, markets are not designed to be inclusive, and they do not have the necessary policies and guidance to achieve that. Therefore, the products that they provide are not designed to be inclusive either.
The good news, however, is that there is an opportunity to change this situation. The proposed financial services and markets Bill provides an opportunity to ensure that the Financial Conduct Authority “must have regard” to financial inclusion. A “must have regard” requirement would not pull the regulator into carrying out social policy, but ensure that the FCA has a statutory requirement to consider financial inclusion issues across all its work, wherever appropriate. It would also require the FCA to obtain the evidence it needs on market failures around financial inclusion, so that it can determine the areas of most detriment, how those issues can be resolved and which bodies are best placed to resolve them.
It is important to stress that neither the new consumer duty on which the FCA is currently consulting nor its consumer vulnerability guidance will address the situation, because both primarily deal with the treatment and the experience of consumers who already have access to those retail products, not the people I am talking about who are priced out of essential services because of the poverty premium. The only way to ensure that low-income or vulnerable customers can access essential services and products is to give the FCA a clear remit on financial inclusion.
This is a cost-free measure—it would not cost anyone anything. I will table amendments based on financial inclusion and I urge the Government, the Minister and all Members here to work with me in supporting them.
Grahame Morris (Easington) (Lab)
It is always a pleasure to serve under your chairmanship, Mr Twigg. I congratulate my good and hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this important debate and on the powerful way in which he articulated the arguments in his speech.
I want to focus on one issue: the need to replace council tax with a proportional property tax. I want to demonstrate the inherent unfairness of council tax. I have some figures that I hope the Minister will find interesting, as they compare my constituency with hers. A proportional property tax would help families to address the cost of living crisis. It would also support the Government’s levelling up agenda and protect those on low incomes who may be disadvantaged by the reforms. I will explain how that will work.
I start by highlighting that 77% of households—more than 18 million—would benefit through a proportional property tax, with the average household saving £556 every year. A proportional property tax would replace council tax, bedroom tax and stamp duty. Outside London, regional economies would benefit from an overall reduction in property taxes of £6.5 billion, which would be a substantial stimulus for communities in need of levelling up and support those communities most in need. For example, under a proportional property tax my constituents would gain, on average, £900 a year compared with council tax. In the Minister’s South East Cambridgeshire constituency, two thirds of households would save money under a proportional property tax, averaging £350 a year. I hope this is something on which there could be cross-party consensus.
If we look at the effect on the constituency of the Minister’s colleague, the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), we will see that his constituents would receive almost £900 a year, similar to the amount that would be received by my constituents. Most people would benefit from this policy.
Grahame Morris
As I was saying before the Division, most people would benefit from the policy of moving from council tax to a proportional property tax. It is certainly true that there will be a small minority of cases where people on a low income but living in a high-value property could struggle, but that is perfectly possible to mitigate at the point of transition. Those struggling to pay the increase could have any rise capped at £100 a month. For those still unable to pay, options could be made available to defer payment until they can afford to pay or until the property is sold.
Council tax is unfair and the inequalities are stark. A £3 million property in Wandsworth pays less than 0.1% of its property value in council tax. We can contrast that with my constituency, where the average household pays more than 2% of the property value in council tax.
A simple system would also reduce admin costs by up to £400 million a year. The tax levied would reflect current property values, instead of the values as they were in 1991. Councils would no longer be forced to chase down council tax debts from people who were unable to pay, as payment can be deferred under a proportional property tax until the sale of the property.
Council tax is one of the most unfair and regressive taxes, taking a disproportionate amount from communities and individuals that can ill afford to pay but that often have a much higher demand for council services. Will the Minister explain why the current system of council tax is fairer than a proportional property tax? If she cannot, will she make the case for change to the Chancellor? I ask my Front Bench, in all humility, to reach out to the Fairer Share campaign. I would be delighted to facilitate a meeting. I think there will be substantial electoral dividends for the political party or parties willing to pick up the baton of a proportional property tax to replace council tax and include it in their manifesto at the next election.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure to serve under your chairmanship, Mr Twigg. I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on his excellent opening remarks and on securing this debate.
There is a tide of poverty, terrifyingly large, growing in every single community in our country. I wonder what the point of this place is if we do not seek to meet the needs of people who literally cannot see how they can put food on the table for their children, pay their bills or pay their rent or mortgage. It is a crisis like no other facing this country.
I will focus my remarks on how that tide of poverty is affecting rural communities such as mine in Cumbria and elsewhere in the country. In my constituency, we have incredibly low unemployment—very low. Pretty much everybody I know, particularly those on low wages, are working multiple jobs. The idea that they can do extra hours or get a better-paid job is a colossal insult to them, as they work tirelessly to provide for their families. The massive majority of people in receipt of universal credit in our communities in Westmoreland, South Lakeland and Eden are in work. They work incredibly hard, but their wages do not keep pace with the rapidly rising cost of living.
The cost of living in an area such as our is exacerbated by the cost of housing. The average house price in my constituency is about £270,000 and the average household income is about £26,000. Do the maths: nobody on an average income can afford anything like an average home in our community. There is extra pressure, because the pandemic has massively increased the housing need in our area. We have seen the absolute evaporation of the long-term private rented market into the holiday let market. In my community, there has been a 32% rise in one year in the number of homes going into the holiday let sector. What were those holiday lets beforehand? They were people’s homes—family homes. People were evicted via section 21s—something the Government said they would abolish in their manifesto—and the availability of properties for those families to live in was diminished.
In parts of Devon, there has been a 70% reduction in the availability of long-term lets that are affordable to local families. It feels like the lakeland clearances are going on in our community. In Ambleside, a couple, both of whom worked, with children in the local school, were given their marching orders—they were evicted via section 21 from the rented property they had lived in for several years. There was nowhere else available in their community to rent, as everything else had gone to Airbnb or become a second home, so they had to give up their jobs, their children had to be removed from their school, and the family had to move to the next county in order to start all over again. It is miserable, and the consequence for our economy is huge.
What does it mean for our workforce? In the dales town of Sedbergh, which is a relatively small place, with fewer than 2,000 houses, there were 103 job vacancies as of last week because there is nowhere affordable for anybody on a modest, moderate, average or low income to rent, never mind buy—that is for the birds in the current era. That impacts on business. Some of the poorest people I know in communities such as mine run their own businesses. They pay and keep their staff—they cannot recruit enough staff—and they pay themselves less than the minimum wage. They live on next to nothing; they live in poverty.
Another huge problem that affects rural communities such as mine is fuel costs. Many of my constituents are not on the mains, so there are no energy price caps, no matter how high and ridiculous the prices are for people who run their property off liquid gas or oil. If someone wants to get the bus just one way from Kendal to Ambleside to get to their job, they have to spend more than an hour’s pay. Likewise, fuel costs are much more impactful when people have to travel miles and miles. My hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) also mentioned the huge impact on the care sector. We cannot recruit people to care for people in their homes.
We cannot miss the impact that the Government’s fiscal policies are having on farming. This year the Government are taking 20% of farm incomes without replacing them for 98% of the farmers in my community. That has an impact on rural poverty in communities such as mine throughout Cumbria. It also impacts on our ability as a country to produce food, and that means rising food prices for everybody else. It is morally wrong and incredibly stupid.
Of course the Government should be taxing the energy companies and redistributing that money to ensure that people are not in penury. Of course they should be cutting VAT to help people. The bottom line is that press releases will not pay bills. The Government need to act now.
Derek Twigg (in the Chair)
I will now impose a four-minute limit on Back Benchers, and I will call the SNP spokesman no later than 3.41 pm.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Twigg. I thank my hon. Friend the Member for Barnsley Central (Dan Jarvis) for bringing forward today’s debate.
I will always recall Mo Mowlam telling the story of a pensioner who came to her surgery, put their pension book in front of her and laid out the bills they had to pay—the sums did not add up. When Labour came to power, we restored respect and dignity to people and made a difference to them. We never thought we would return to the days in that story, but we have—and worse. When my constituents make hard choices because their bills and income do not add up, they too struggle to understand how they will get through the next three months, let alone the autumn and winter. They are having to make those hard choices every day, making pristine accounts and budgets just in order to survive. One constituent debated whether she would end going to the day centre, her only social contact. Another said that, when she went to the food bank, she had to select foods that did not require cooking. Those are real choices that my constituents are making right now.
If the bill drops through the door, and you dare to open it before reaching for help, your mind is in the echo room, with your mental resilience evaporated. That was the case for one of my constituents when they fell short by £3.45 on their utilities bill. That spiralled out of control and did not end well. That is the reality that people are living in. As many hon. Members have said, the Government have solutions in their hands, if only they would see this as a priority.
Wages are so low that people cannot survive on them. These are the people who never received those promised pay increases, particularly in the public sector, which did not even get 1%. Meanwhile, people paid themselves profits in the many multibillion-pound companies that benefited from Government handouts during the pandemic. The Government need to put the money where it will make the greatest difference. People will spend that money in the local economy, which is how we can get the economy moving. The pay remits should focus on those at the bottom of the pay scales, ensuring that they get not just percentage increases, which benefit the best paid in the workplace.
I, too, want to concentrate on housing. In York, we have a low-wage economy but an extortionately high cost of living because of the housing crisis. The house price to earnings ratio in York is 8.21 and rising. The rental cost figures published just this week show a rise of 10.2% over the past year, averaging £945 a month—35% of people’s income. We need rent controls to hold down those rents. People are not only using their hard-earned money to pay for a roof over their head, but that money is being extracted from the local economy.
We have seen family homes, which people would have bought and lived in in the past, being bought by investors who turn them into Airbnb lets. We have lost 1,785 homes into the Airbnb market, extracting more money out of our local area. We need those reforms now, to stop the crisis getting worse.
Yasmin Qureshi (Bolton South East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Twigg. I thank my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing the debate.
My constituency, a place I am proud to represent, is the 38th most deprived in the UK. We have a wage crisis, a job crisis and a housing crisis. Now we have a Tory-made cost of living crisis, which my constituents literally cannot afford. It is a major issue, and it is filling my constituency mailbag and, I am sure, those of other Members. A recent survey by 38 Degrees found that it is the No. 1 issue facing constituents: 80% faced higher bills, 76% faced higher petrol prices, and 24% have lost income due to the universal credit cut. I wish I could stop there, but the testimony is even more telling. A constituent who wished to remain anonymous said:
“I am a pensioner with a lung health problem. I cannot afford to heat my home, which makes the health problem require greater medical attention, putting more strain on the NHS.”
Petrol is becoming almost unaffordable. In just eight months, a tank of petrol has gone up by roughly £17.50, so 5p off fuel duty will not begin to cut it. In areas such as mine, people are dependent on cars, because we have poor public transport links. As a result, the only affordable option has now become incredibly expensive. As my hon. Friend the Member for Barnsley Central said, we must ask the Treasury to rethink the mileage cost allowance, at least for public sector workers, and to abolish hospital car parking charges.
The Bank of England is predicting a recession, interest rates will go up, as will the energy cap in October and again in 2023, and the inflation rate could pass 10%—the list goes on. There is so much that the Government could do but have refused to. Labour has called for a windfall tax to provide support to households. We could increase universal credit back to what it was throughout the pandemic, and cancel the national insurance rise. Those are measures that the Government could take, but they are refusing to do so.
Short-term policy responses will not put money into the pockets of working people; only a long-term plan to address the crisis will do so. The war in Ukraine has shown how important energy security is. We need to invest in renewables and nuclear energy, as the Labour party has pushed for, to end our dependency on foreign nations. That would create proper jobs on a living wage. We also need to invest heavily in our infrastructure—trams, trains and metros—to create further economic effects and to green up our nation. Again, that will create jobs.
As I find myself saying time and time again, this is an issue not of how but of political will. Sadly, I think it is an issue that the Government will continue to avoid, while the Opposition parties rightfully make the case for proper support. Our constituents are suffering; it is about time that the Government did something to help them. It is not surprising that no Conservative Back Benchers are present—they know that what is happening is indefensible.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
It is a pleasure to serve under your chairmanship, Mr Twigg. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing what is an extremely timely debate, given that this is the biggest issue facing our country and our constituents.
The cost of living crisis is causing great hardship in Merthyr Tydfil and Rhymney, and right across the country. We desperately need measures to tackle it and, at the very least, an emergency Budget that introduces a windfall tax to bring people’s bills down now. Yesterday’s news that the energy cap could increase to £2,800 in the autumn is truly frightening.
The Government do not seem to have a plan. During the Queen’s Speech debate, the Prime Minister hinted that help would be announced “in the coming days”, only for the Treasury to announce in the following hours that that was not the case. That is an example of the lack of a joined-up approach across Government.
Recently, I met my local citizens advice bureau, which highlighted growing hardship across the constituency. I was alarmed to hear that overall client numbers have doubled in recent months. Queries about energy have increased by 250%, which is evidence of the fuel poverty crisis, and are now mainly about support to pay fuel bills. Debt numbers have increased by 200%, and council tax debt is now the biggest issue. That is worrying, as those are household debts. Probably most worrying, however, is the massive increase—more than 500%—in requests for food bank vouchers and other charitable support. My local food banks operate in challenging times and, on a number of occasions recently, have come close to running out of food, given the huge demand.
The fact that nothing in the Queen’s Speech tackled this growing crisis demonstrates that the Government are not listening or, if they are, that they are failing to act, which shows a shameful lack of compassion. A windfall tax would be a start. As we have heard, it is grossly offensive that energy giants are announcing their highest ever profits—recently, Shell announced profits of more than £7 billion in the first quarter of the year—and yet the Government have so far refused to implement a windfall tax. At the same time, people are struggling to choose between heating and eating. The Government must rethink their approach. We need a proper plan, and we need it now.
We also know that many public service workers are out of pocket from just doing their jobs. Many use their cars to do their job, such as care workers and social workers, who visit vulnerable adults and children. They are now repaid less than what they spend on petrol, thanks to the out-of-date HMRC mileage rates. I support the call of my hon. Friend the Member for Barnsley Central to review those rates.
It is clear that public sector pay is also key to levelling up, as public sector workers make up one in seven employees in every region of the UK. In the north-east, Wales, Scotland and Northern Ireland, increasing public sector pay would provide a boost to the economic regeneration of the country, given that we are seeing the steepest drop in living standards since the 1950s. The Government have levers at their disposal, and they must use all of them to help ease the huge pressure on thousands of families across the country. Talk on this issue simply is not enough; we need action, and we need it now. I look forward to the Minister’s response and hope that she can demonstrate that the Government will act, and act quickly.
Derek Twigg (in the Chair)
I am afraid I will have to reduce the limit again, to three minutes. I call Jim Shannon.
Jim Shannon (Strangford) (DUP)
Thank you for calling me, Mr Twigg. I am very pleased to speak in the debate, and I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on leading it and setting the scene.
I will give some examples of how the cost of living crisis is affecting my constituents. There are people in my constituency who have to choose between putting on their heating and feeding their children. Increasingly, they have to decide whether they can help their widowed, elderly parent to heat their home as well. These decisions are happening in my constituency each and every day, and I have no doubt whatever that they are the same everywhere else.
Inflation has reached its highest rate since 1982, and gas prices have increased by 95%. Consumer prices are up by 9%, electricity prices are up by 54%, and 11% of the working-age population of Northern Ireland live in absolute poverty, so I look to the Minister for help. A constituent has informed me that she pays her gas bill by direct debit, which means that if she does not put the money in, she does not get gas. She has gone from paying £54 a month to £178 a month, and her electricity bill has risen three times in the past year. She and her husband both work full time, and even with her husband’s second job it is impossible to make ends meet. I would probably refer to them as the middle-class poor. She has a seven-year-old, who is a talented young musician. Even if the violin is rented, there is still money to be spent on the girl. My constituent is on the threshold for aid, but the Government have refused to lift the threshold in line with inflation, and she simply does not have the money.
At a time when costs are skyrocketing, people in employment are paying more national insurance than ever before and it cannot be sustained. After the luxury of a music lesson, there is a school visit, the school play or other essential extracurricular activities. The middle-class working poor have been under incredible pressure for the last few months, but they are even more so now. Those currently earning above £25,000 will pay more national insurance contributions and income tax after 2022-23. The Government keep on telling us that they are helping, but would they consider delaying the increased payments for now, given that it would have a significant impact on workers who are already struggling? The Ofgem chief has referred to the energy price cap, which is expected to rise by £830 and reach £2,800 in October. Again, we need reassurances about the long-term strategy to enable us to get beyond the next six months.
No longer are working families saving to go on a foreign holiday or putting in new kitchen cupboards. They are living from hand to mouth. As that is the case, I believe that the Government can and must intercede in a constructive and practical way. I have asked about delaying the increase in national insurance contributions, and I have asked for a six-month strategy to enable people to have some idea of what the costs will be. In the next six months, prices will rise by £600.
Matt Rodda (Reading East) (Lab)
It is a pleasure to serve under your chairship, Mr Twigg. I thank my hon. Friend the Member for Barnsley Central (Dan Jarvis) for his excellent work in securing the debate, and for his powerful speech.
In the time allowed, I would like to raise three key points about the cost of living crisis that is facing families and pensioners throughout the country—first, to raise some matters relating to my constituency; secondly, to point out some of the additional pressures on public service workers and key workers; and thirdly, to call for a robust response from the Government.
I will start with the points about my constituency. For Members who do not know Reading and the neighbouring town of Woodley, we are lucky to have a buoyant local economy. However, wealth is not spread evenly throughout our community, and many people live in older properties, which are very hard to heat. We have a large number of Victorian terraces, which are attractive to look at but very costly to the residents.
I want to highlight a couple of powerful cases that have come into my office. More than 60 people have contacted me and my team in the past few weeks about the cost of living crisis, which illustrates that this crisis is being felt everywhere, including in the south-east of England.
The first instance is of a woman who is a teaching assistant, who contacted my team in February in deep financial distress. Before the hike in energy bills, she was already struggling to make ends meet. Her take-home pay at that point was around £1,600 a month, but the cost of renting in our area was £1,150. She is extremely worried about the dramatic rise in her energy bills and, as a single parent, is very concerned about looking after her son.
I heard from another constituent—a young man living in a shared house—who is also single. He describes himself as working full time “on an OK wage,” meaning that he is not entitled to any kind of benefits. With rising costs, especially after the update in energy prices, his monthly bills are already above his earnings. He has spoken to his employer, who has very kindly listened and tried to respond, and he is due to get a pay rise. However, that will still not be enough to make ends meet. At the moment he is having to dip into his savings to cope, which is obviously not sustainable.
These cases show the scale of what we are facing around the country, including in areas with quite a buoyant economy. They highlight the need for urgent Government action.
My second point is about the particular pressures facing public service workers and key workers. I am sure that everyone across the House would agree on the vital role that those workers have played during the past couple of years. Whether that is our wonderful NHS, teachers, police officers or people working in supermarkets, it is absolutely incredible what they have taken us through, and I ask the Minister to consider the position they face.
Richard Burgon (Leeds East) (Lab)
Today, I want to make a proposal. We have heard a lot recently about a windfall tax. We have even heard that the Prime Minister might be about to U-turn and deliver one. To make a real difference to people’s lives, it must raise serious funds, so today I call for £10 billion to be raised via a windfall tax on North sea oil and gas giants to help deal with the cost of living emergency.
Let us be clear: people’s bills are so high because North sea oil and gas companies are making vast excess profits. Those excess profits are not the result of innovation or extra investments; they are an undeserved and unexpected windfall that has come about simply because oil and gas prices have spiked as a result of the horrific war in Ukraine.
We have a choice. Either oil and gas companies continue to make eye-watering levels of excess profits or we use a windfall tax to help people through this crisis. Using figures from the Office for Budget Responsibility, we can estimate that North sea oil and gas companies will make post-tax profits of £15 billion in the financial years 2021-22 and 2022-23, which is almost £13 billion more than they would have made based on their average annual post-tax profits in the three years before 2020-21, when oil and gas prices started to increase. I therefore think it perfectly reasonable for £10 billion of that £13 billion to go to the taxpayer.
Before we hear the claim that such a tax would undermine investments, let us remember that BP has even admitted that a windfall tax would not affect its planned investments. Of course, some in the Conservative party who put profit before people may scream and shout about such a plan. However, the truth is that this is an emergency that people are living through, and in that context we need emergency measures.
Of course, the level of windfall tax that I propose will not be enough by itself. We will need windfall taxes on the wider energy sector and across other sectors that are making excess profits. We will need price caps on key essentials and we will need wealth taxes. However, a windfall tax to raise £10 billion will make a real difference to people’s lives, and we should get on with delivering it. The Government can and should do it. It is necessary and it is the right thing to do. They should get on with it now.
Peter Grant (Glenrothes) (SNP)
I am pleased to begin the summing up for this debate, Mr Twigg. I commend the hon. Member for Barnsley Central (Dan Jarvis) for securing the debate and for his introductory remarks. Given that he devoted a lot of his speech—a number of other Members have mentioned this—to the debt we owe public service workers, I hope I may crave Members’ indulgence for a few seconds to give a shout out to one public sector worker in particular. Dr Fiona De Soyza retires today after 37 years as an NHS doctor—31 and a half years at Leslie Medical Practice in my constituency. She is not planning to retire from the 38 years she has served so far as my wife. Obviously, I would rather be there, but my duty means that I have to be here.
The Bank of England Governor, Andrew Bailey, told the Treasury Committee that we should expect “apocalyptic” food price rises before the end of the year. Archie Norman, the chairman of Marks & Spencer, said that food prices could rise by 10% this year, on top of the increases that we had already started to see last year. There are warnings that schools will have to cut the size of school meals to keep their budgets under control. The Institute for Fiscal Studies has reminded us that there is not a single rate of inflation; everyone has their own rate of inflation, and the poorer someone is, the bigger that inflation rate is. That is because, the poorer someone is, the more of their household money, by necessity, is spent on the things that are now spiralling out of control. Someone on an MP’s salary does not have to spend three quarters of their money just to keep themselves and their family fed and warm. Someone on minimum wage—or below—does.
At the same time, the number of billionaires in the United Kingdom is the highest it has ever been. The wealthiest people in the United Kingdom saw their personal fortunes increase by 10% last year. We are very definitely not all in this together. While I have no question about the sincerity of all those who have spoken against Government policy today, I do need to gently point out to Labour colleagues that right now their party in Scotland is doing deals with the Tories, all over Scottish local government, to help the Tories have an influence that the voters of Scotland wanted to deny them at the ballot box in the first week of May. When we are talking about the iniquities of this Government at a UK level, why are some parties in Scotland putting the Tories into power to run, and all often probably ruin, local government services?
The Government’s response so far has been nothing short of shocking. First, they pretend it is nothing to do with Brexit. They say that it is partly caused by the war in Ukraine, and that there is no doubt that covid has had a significant impact. Then somebody called “global” seems to get the blame for everything the Government get wrong these days. We have got a Chancellor who increases the burden of taxation and thinks it is a tax cut; a Chancellor who thought it was silly to give money to people who are poor to help them pay their bills; a Chancellor who tweets figures showing that the economy is shrinking and says, “Isn’t it good that the economy is growing?”; a Chancellor who increases national insurance, knowing perfectly well that it will hit people who work for a living and benefit people who are able to make a fortune from investment and property ownership. I wonder who the Chancellor knows who might benefit from that.
Valid points were made about the inadequacy of mileage rates paid to a lot of public sector workers, but people who work in the private care sector very often do not even get those—they often have to pay their own mileage and drive on their own time between appointments. It is now widely leaked by the Government that there is an emergency package of support coming. We might even see a U-turn on the windfall tax, not because it is morally the right thing to do, but because they need something—anything—to keep the Prime Minister with his glass of beer off the front pages for the next couple of days. What an example! What a perfect metaphor for the utter iniquity of this Government that they will not spend money to help people because they need it, but they will spend public money on trying to keep the Prime Minister’s misconduct off the pages of the newspapers.
What could they be doing? The windfall tax has been mentioned, and I am quite happy to support that in principle—not just for oil and gas companies, as has been mentioned, but for anybody who has made huge profits through good luck during the last two desperate years. The Government could follow the example of Germany, which has cut fuel duty five times as much as the United Kingdom. It is giving a €300 payment to everybody, plus €100 for every child. Ireland is giving a €200 energy rebate for everybody—not a loan that they have to pay back, but a grant. Belgium cut VAT on energy to 6%. That was something the Government told us we were not allowed to do when we were part of the European Union. How come Belgium was able to do that?
Scotland, without even the full powers of a normal nation, will be increasing the Scottish child payment by the end of the year to £25 per child. That has been described by the Child Poverty Action Group as a “game changer”. The Scottish Government are currently spending more than £360 million above Barnett funding on benefits, including through seven new benefits that do not exist anywhere else in the UK. The Scottish Government were not set up to spend Scotland’s money fixing the failures of the United Kingdom Government, but all too often, that is what they are having to do.
Poverty is not an essential part of today’s life. Poverty is not inevitable in the United Kingdom today. The United Kingdom boasts about being one of the wealthiest nations—or collections of nations—anywhere in the world. Scotland certainly, and probably the United Kingdom in its entirety, is self-sufficient in energy. We could be self-sufficient in food if the food production and distribution system had not been so destroyed over the years. Energy companies are now warning that half of their customers will not be able to pay their bills by the end of the year. That is not essential; it is a deliberate political choice by a Government whose days are up.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
It is a pleasure to serve under your chairship, Mr Twigg. I begin by thanking my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing and leading this extremely important and timely debate. He is a great champion for working people across this country. I thought his opening speech set out clearly the challenges that are facing his constituents, as well as all hon. Members’ constituents, at this moment.
I would like to thank UNISON, a trade union I am proud to be a member of, for the briefings it provided in advance of this debate. I will come on shortly to how the cost of living crisis is affecting public sector workers. This has been a good debate, with hon. Members from across the House speaking with passion and sincerity about the impact of the cost of living crisis on their constituents. We have also heard repeated pleas to the Government to end their inaction and provide more support to the families who are really struggling. I will come on to some of these suggestion shortly.
The hon. Member for Glasgow East (David Linden) made some very important points about low pay, which I will address shortly. My hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) made an excellent speech on the poverty premium. I thought the point she made about the difference in cost between direct debit and prepayment meters for energy was particularly relevant to the current situation. I hope the Minister will address that point directly.
My hon. Friend the Member for Easington (Grahame Morris) made some interesting points about the taxation of property and possible reforms to how it is done. The hon. Member for Westmorland and Lonsdale (Tim Farron) spoke about the particular challenges of rural poverty and the issue of second homes and Airbnb making the housing crisis worse. My hon. Friend the Member for York Central (Rachael Maskell) spoke about the housing crisis, particularly the challenges for renters and the knock-on effect on the rest of the economy. My hon. Friends the Members for Bolton South East (Yasmin Qureshi), for Leeds East (Richard Burgon) and for Merthyr Tydfil and Rhymney (Gerald Jones) set out some short and long-term solutions to the current crisis, including a windfall tax.
I totally agree that this is a matter of political will. The hon. Member for Strangford (Jim Shannon) spoke about the impact of the increase in national insurance as well as energy prices on his constituents,. My hon. Friend the Member for Reading East (Matt Rodda) gave some heart-wrenching examples of the struggles facing his constituents and public sector workers.
I want to start by setting out how this cost of living crisis is affecting workers, families and businesses. In recent weeks, we heard the news that inflation had hit a record 40-year high, rising to 9%. It is the highest one-year increase in consumer prices since records began. The average household energy bill has gone up by more than £1,000 this year. The food shop has gone up by 5% and the Bank of England has warned of further, “apocalyptic” food price rises. The cost of filling the car with petrol has jumped by £20 a time. Since January, 2 million people have gone a whole day without eating, because they cannot afford to eat.
We have heard awful accounts from my hon. Friend the Member for Barnsley Central, who shared stories on behalf of his constituents. I know some of my constituents cannot even afford a bus fare to get to the food bank to receive help. I am sure that each and every hon. Member will have similar stories in their inbox.
As well as rising prices, there is a wage crisis in this country. Weekly pay for a full-time worker is expected to reach £652 by 2023, but if weekly pay had grown in line with inflation since 2010, it would have reached £695 by 2023. The last 12 years of Tory Government have seen pay squeezed, costing workers hundreds of pounds a year, even before the Tory tax rises. As several hon. Members have mentioned, the pay squeeze has also hit public sector workers. Stories of NHS workers having to use food banks are shameful. They and other key workers kept our country going through the darkest days of the pandemic.
My hon. Friend the Member for Barnsley Central set out some of the specific challenges facing public sector workers, including HMRC-approved milage rates falling behind the cost of driving and charging staff to park in NHS car parks. I hope that the Minister can address these important issues when she responds. Public sector workers deserve better from this Government on pay and other workforce issues, including workload, progression and staff wellbeing.
Of course, the cost of living crisis has also hit businesses. Consumer confidence is at an all-time low and businesses’ costs have rocketed. The cost of living crisis is adding to 12 years of low economic growth. In fact, over 12 years growth has averaged just 1.4%—the worst record of any Government since the second world war.
That is a cost of living crisis, a wage crisis and an economic growth crisis all at the same time, and what is the Government’s response? So far I have heard nothing except more dither and delay. Reports suggesting that the Chancellor is considering some form of windfall tax are all well and good, but we have been calling for that for months. Where is the urgency from the Government? Where is the recognition that people need help now? It is simply not good enough. We have said that the Government should bring forward an emergency Budget to deal with the immediate crisis, and that it should contain five priorities to make material difference to millions of workers and their families.
First, we have called for a windfall tax on oil and gas producers in order to cut home energy bills. The arguments for a windfall tax have been well stated by hon. Members today, so I will simply say that when leading business figures, charities and politicians from across the political spectrum are urging the Government to get on with this and do it, there is simply no excuse. We believe that the windfall tax should be used to remove VAT on domestic energy bills and expand and increase the warm home discount. That will save most households around £200, but those who most need it could save £600.
Secondly, we have called for support for struggling businesses through a discount on business rates for small and medium-sized enterprises, to be funded by a tax on online giants. Thirdly, the Government must scrap the national insurance increases, which are hitting workers at the worst possible time. This is not the time to implement a national insurance increase.
Fourthly, we need a clear plan to ramp up home insulation and upgrades, making homes more energy efficient and saving households, on average, £400 every year. Fifthly, we have said that the Government must go after the fraudsters who stole from the public during the pandemic. Why are the Government not allowing the National Crime Agency to investigate the £11.8 billion lost to tax from fraud? That money could have been used to help people out of hardship right now. These five policies would make a real difference to workers and families across the country.
To conclude, unlike the party opposite, Labour has a plan to put money back into people’s pockets, grow the economy, boost jobs and wages and tackle this terrible cost of living crisis. We are still waiting for the Government’s plan but we cannot wait very much longer. Now is the time for action and for a windfall tax, and to finally give the people the help they need.
The Financial Secretary to the Treasury (Lucy Frazer)
It is a pleasure to serve under your chairmanship, Mr Twigg. I thank the hon. Member for Barnsley Central (Dan Jarvis) for organising this important debate, and all Members for their valuable contributions.
Hon. Members have set out the concerns and struggles of their constituents. I assure hon. Members and their constituents that the Government absolutely recognise that families up and down the country are facing an unprecedented cost of living challenge at the moment. We understand that the cost of food is rising and that the cost of goods going up is hitting people’s pockets. It would be wrong of me to pretend that these issues are going to subside. We all know that the next few months are going to be difficult. I know that people are really worried. It would also be wrong of me to suggest that the Government can wave a magic wand and that there is some quick fix that no one has thought of to reverse all the price rises that are happening at the moment. These are global trends and they are driven by global challenges.
We recognise that these are serious issues facing our society, as the hon. Members for Barnsley Central and for Merthyr Tydfil and Rhymney (Gerald Jones) said. We are doing a significant amount. We have already done a significant amount to help the many families that hon. Members have spoken about. We have provided £22 billion of direct support to families grappling with the cost of living pressures, including the £1,000 that people on universal credit will get or the £1,000 that people on the national living wage will get, through the changes that we have made to those measures. Our support includes £9 billion of energy support to ensure that fuel duty is cut, and the council tax rebates of £150 for band A to D payers in England, as well as the warm home discount, which we have expanded to £150, and the £1 billion of household support that people are getting through their local authorities.
I recognise that it is important not just to talk about statistics or investment in global terms; we recognise that the cost of living pressures are affecting individual families. I listened very carefully to the hon. Member for Barnsley Central when he spoke about a public sector worker on universal credit who was struggling. I emphasise that a low-earning family with one adult working and two children under five will be £1,610 better off a year as a result of the recent changes we have made to national insurance contributions and the universal credit taper rate.
Peter Grant
Has the Minister bothered to work out how much of that £1,600 has disappeared in increased food and fuel bills since the announcement was made?
Lucy Frazer
Obviously, different people will experience different rises in the cost of living, depending on their circumstances. We absolutely recognise the rising cost of living, which is why we have already made a number of changes.
I will move on to the point that the hon. Member for Barnsley Central made about public sector pay, as did the hon. Members for Reading East (Matt Rodda) and for Glenrothes (Peter Grant) by analogy. I recognise the important work that public sector workers have been doing during the pandemic and in the ordinary course of business, helping to support our world-class public services. Hon. Members will know that last year’s spending review confirmed that public sector workers will see pay rises across the whole spending review period from 2022-23 to 2024-25. Pay for most frontline workforces, including nurses, teachers, the armed forces and police officers, is set through an independent pay review body. We will consider all recommendations from pay review bodies this summer, once those final reports are submitted. I also point out that many public sector workers will benefit from the increase in the national living wage that I mentioned. Two million people, many of them public sector workers, will benefit from that.
The approved mileage allowance payments, which the hon. Members for Barnsley Central and for Bolton South East (Yasmin Qureshi) raised, reflect all the running costs of a vehicle, including fuel and other vehicle expenses, such as servicing, insurance and depreciation; fuel is only about a third of the cost included in the rate. It is up to an employer what expenses they pay their employees. They do not have to use the allowance payment amounts, and can instead agree to reimburse the actual cost incurred. Individuals are not liable to pay tax on the difference as long as they can provide evidence of the expenditure. As with all taxes and allowances, we keep the rate under review.
The hon. Member for Barnsley Central talked about NHS car parking charges. I am pleased that he recognised that NHS staff working night shifts benefit from no car parking charges, as do disabled people, frequent out-patient attenders and parents of sick children staying overnight, but I am happy to look into the matter further with officials.
I listened carefully to the ideas raised by the hon. Members for Glasgow East (David Linden), for Kingston upon Hull West and Hessle (Emma Hardy), and for Easington (Grahame Morris). I have previously spoken to the hon. Member for Westmorland and Lonsdale (Tim Farron) about the housing issue he raised. I valued that conversation, and I thank him for raising those points again.
The hon. Member for York Central (Rachael Maskell) said that Labour restored people’s dignity, but the latest data shows that, compared with 2009-10, there are now 2 million fewer people in absolute poverty. The Chancellor, the Government and I are very proud of that statistic. I am very proud that, when Conservative Governments are in office—particularly this one—we have record unemployment, which allows people to earn a wage and support their families, whereas every single Labour Government has left office with unemployment higher than when they entered it.
I have set out a number of the measures that we have already taken to support people with the cost of living, which we absolutely recognise. We are also taking steps to boost the UK’s economy. I have not got time to go into all the measures today, but hon. Members know that the Chancellor has set out a long-term plan to boost the economy through capital, people and ideas, building on the progress that we have already made in in this area.
Emma Hardy
Before the Minister sits down, I want to push her a little further on financial inclusion. Will she meet me and the campaign group Fair By Design to look at the FCA’s remit with regard to financial inclusion and how we can reduce the poverty premium for people with the least money?
Lucy Frazer
I or another Minister would be very happy to meet the hon. Lady to discuss that.
We are helping to deal with the cost of living, but the only way out of the rising inflation that we face is to grow the economy more broadly, and that is what we are doing. I reiterate that the Government stand ready to do more to support people across the UK who are struggling with cost of living pressures. We will take action to ease these burdens, where we can, in the short term, while exercising responsible economic leadership to deliver the conditions we need to prepare the UK economy for the future.
Dan Jarvis
This has been a very useful and timely debate. Again, I thank Unison for the support that it has provided and for the work that it does. I also thank hon. Members for their contributions. Although minds have rightly been focused on the terrible time that many of our constituents are having with the cost of living crisis, the reality, as some hon. Members have commented upon, is that what we are actually talking about is the grinding effects of poverty, which many of us have known about for a very long time indeed.
In this debate we have heard concerns expressed about really important issues such as low pay, pensions, the poverty premium, reform of council tax, windfall tax, the cost of parking, the cost of mileage, housing costs, fuel costs, transport costs and a number of other things as well. I think that hon. Members have made a significant number of sensible and reasonable suggestions, and I very much hope that the Minister will think on them and that the Government will act at pace.
The Minister mentioned that she had worked with her officials to look specifically at the issue of NHS parking charges. I would be very grateful if she wrote to me with her conclusions following the piece of work on that issue that she said she would do.
Finally, although the Government of course have a crucial role to play, I will take this brief opportunity to recognise the very important contribution being made by the charitable and voluntary sector, which, as it always does, has stepped up to support those who are in crisis. In particular, I will just put on the record my thanks to the wonderful British Heart Foundation shop in Barnsley, which I had the pleasure of visiting last Friday. The staff there and the staff in charity shops right across the country are doing amazing work during these very difficult times, providing brilliant service and good-quality products at an affordable price. We owe them a huge debt of gratitude.
Question put and agreed to.
Resolved,
That this House has considered the fiscal approach to tackling rises in the cost of living.
India’s Foreign Contribution Law: NGOs
(2 years, 5 months ago)
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Derek Twigg (in the Chair)
I will call the Member to move the motion and I will then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
Stephen Timms (East Ham) (Lab)
I beg to move,
That this House has considered the impact of India’s foreign contribution law on NGOs.
I am very pleased to serve under your chairmanship this afternoon, Mr Twigg.
This time last year, India had a devastating covid surge. By 6 May 2021, the country had recorded over 400,000 covid cases. Oxfam India, which was founded in India by the British charity Oxfam, provided urgent supplies and support. It worked with India’s health departments, district administrations and local organisations, and its staff set up oxygen plants, provided ventilators and delivered food to vulnerable communities. India’s Prime Minister, Narendra Modi, was among those who praised the response to the pandemic by civil society organisations, and Oxfam India played a key part in that response.
Yet in January this year, the charity received some very bad news. The renewal of its Foreign Contribution (Regulation) Act licence had been refused; the decision was apparently made last December. The result is that Oxfam India is no longer able to receive funds from abroad. Its annual income will fall from around €15 million to €2.1 million; at least 11 of its 15 development projects will close; and its former reach of over 1.5 million people, mainly Dalits, indigenous populations, minorities, women and girls, will be drastically cut. No explanation for this decision has been given.
Charities and non-governmental organisations in receipt of foreign funding in India must be registered under the Foreign Contribution (Regulation) Act 2010—the FCRA—which regulates how foreign funding can be received. Charities and NGOs now need to operate through a designated FCRA account at the State Bank of India’s main branch in Delhi. According to Christian Solidarity Worldwide, local human rights monitoring groups say the purpose of that is to supervise and monitor NGOs’ activity. The Act now gives the Government huge powers to inquire into what NGOs are doing, each time putting their work on hold until the inquiry is complete.
Jim Shannon (Strangford) (DUP)
I congratulate the right hon. Gentleman on securing this debate. On 6 January this year Members highlighted another charity, the Missionaries of Charity, who were reinstated some days after the debate. Organisations such as Oxfam, Greenpeace and Compassion are also affected. Some of the NGOs are of Christian heritage and some have a Muslim background. Some 250 Hindu NGOs have been closed because they are anti-Government. Does the right hon. Gentleman agree with me that this is an early warning bell of increased human rights abuses in India? It harms India’s poorest and is a symptom of the continuing pressure from Hindu nationalism.
Stephen Timms
The hon. Gentleman is absolutely right about that. It seems clear that the FCRA is being used to make life difficult for organisations that from time to time might be critical of the Government. In 2016, a commission appointed by the UN Human Rights Council called for the repeal of the Act, but in 2020 it was tightened up even further on the grounds of bringing greater accountability.
Of course, what is happening to NGOs is part of a wider pattern in India. We all grew up thinking of India as the greatest democracy on the planet. The briefing for this debate from the all-party parliamentary human rights group is absolutely right to refer to
“India’s rich tradition and constitutional status as a secular democracy.”
Afzal Khan (Manchester, Gorton) (Lab)
I was simply stunned when the reputable organisation Amnesty was forced to close its office in India. The suffocation of minority rights and the lack of freedom of expression has also been illustrated by the ongoing conflict in Kashmir, the farmers’ protest and the persecution of minorities, as has been mentioned, including the Christians and the Dalits. Today, Mohammed Yasin Malik and other leaders have been sentenced to life, and their only crime is wanting freedom from Indian illegal occupation. Does my right hon. Friend agree that India is a diminishing democracy?
Stephen Timms
I do agree with that. The situation is very worrying. I remember vividly the pride of Muslim constituents with roots in India, their home country, when I was first elected, but that has all drastically changed. There have been new laws to make things difficult specifically for Muslim citizens. Our Prime Minister’s state visit to India last month took place against a backdrop of inter-religious violence in Delhi and the demolition of Muslim-owned buildings.
The Christian charity, Open Doors, which launches its watchlist every year in Parliament, now designates India as the tenth worst country in the world in which to be a Christian. It has been sliding down other indices as well. It is ranked 150 out of 180 countries in the latest World Press Freedom index. Freedom House ranked India as only “partly free” in its Freedom in the World report this year, noting that:
The constitution guarantees civil liberties including freedom of expression and freedom of religion, but harassment of journalists…NGOs…and other government critics has increased significantly”.
The Economist Intelligence Unit’s latest Democracy Index categorises India as a “flawed democracy”. Civicus, the Johannesburg-headquartered global civil society alliance, categorises Indian civil society as “repressed”, which is the second worst category in its ranking, having downgraded in 2019. Not one of those indices proves there is a problem, but the overall message that they all convey is unmistakable.
The 2020 changes to the FCRA have effectively banned NGOs from research, advocacy and campaigning. They have also created new bureaucratic and practical hurdles, a ban on NGOs transferring funds to other NGOs, other restrictions on fund distribution, a cap on administrative costs, and delays from the necessity of additional form filling. It is claimed that all of that is to strengthen transparency and accountability, but it is fairly clear that the Government are targeting charities and non-profits that question their policies. Will the Minister urge the Indian authorities to review carefully the FCRA for compliance with international human rights standards and to suspend aspects of the law that restrict charities from providing urgently needed relief?
The Centre for Promotion of Social Concerns is a prominent human rights organisation in India. It lost its licence under the FCRA in 2016. The Ministry of Home Affairs said that was on the basis of a field agency report. The group challenged the decision in the High Court and, in the Ministry’s evidence to the court, it complained that the organisation used foreign funding to pass information to United Nations special rapporteurs and to foreign embassies, that that was
“portraying India’s human rights record in negative light…to the detriment of India’s image”,
and that such acts were
“undesirable activities detrimental to national interest”.
My hon. Friend the Member for Manchester, Gorton (Afzal Khan) was right to draw attention to Amnesty International being forced to put an end to its covid support. The head of Amnesty International India said at the time:
“Even if you’re working on Covid, the law makes it very difficult for you to be able to even accept foreign aid coming in without being in violation of the law”.
Greenpeace, too, has lost its licence. The Ford Foundation has been suspended. NGOs from other overseas countries are telling their own Governments how hard this is making things for them.
Oxfam—I started with this case—has been sending help to India since 1951. Oxfam India became a fully Indian organisation in 2008. Today, it is one of the country’s largest NGOs, providing food, shelter, clothing, medicine and medical equipment. It was reaching more than 1.5 million people, but has now lost its FCRA licence, so that number will be reduced drastically. Oxfam India applied to renew its licence on 1 April last year, in good time, but it appears that the application was rejected on 15 December, although the organisation has received no official communication from the Indian Government about that decision. Now, it can only raise resources within India, but its previous income was 75% made up of foreign aid. A lot of staff will lose their jobs, and crucial humanitarian and social work has ended.
In the five years after the current Indian Government first took office in 2014, more than 14,000 NGOs were barred from accessing foreign funding, seemingly mainly to hamper criticism of Government policies. Nearly 6,000 did not have their FCRA licences renewed last year. One notable organisation affected, as the hon. Member for Strangford (Jim Shannon) pointed out in his intervention, was the Missionaries of Charity, founded by Mother Teresa. It was blocked from accessing international funding on the grounds of “adverse inputs”, but nobody knows what that means, or what the problem with Mother Teresa’s charity was thought to be. As the hon. Gentleman rightly said, the decision has been reversed, which at least suggests that external pressure can help to deliver renewal of an FCRA licence.
Oxfam India applied well before the deadline. No reasons for the refusal were given, simply a statement that the decision had been taken in the “public interest”, but one of the problems is that the FCRA definition of
“activities prejudicial to the public interest”
is extremely vague. Will the Minister seek from the Indian Government an explanation of why Oxfam India’s activities are regarded as
“not in the public interest”?
Oxfam India has now filed a petition to the Indian Government for a final administrative review. There has as yet been no response.
On 10 February, the permanent secretary at the Home Office, Sir Matthew Rycroft, raised this issue with his counterpart at the Indian Home Ministry. In response to my written question, the Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster), said on 17 May:
“The Permanent Secretary addressed the difficulties that some NGOs in India have faced due to the enforcement of the FCRA, which is impacting both on the work we are funding and the work of UK-headquartered global NGOs in India.”
I very much welcome the permanent secretary’s intervention on this issue, but as I understand it, the Indian Government have given no assurances at all about whether these cases will be reviewed. There is clearly a lot more to do. In answering my question, the Under-Secretary of State for the Home Department said that the UK continues
“to monitor developments related to the Foreign Contribution Regulation Act, especially impacts on UK Government-funded programmes in India, and the work of British NGOs in India.”
However, we need more than monitoring. I am sure the Minister will agree with me about the negative impact of the FCRA, and I ask her and her colleagues to press the Indian authorities to review the legislation and lift some of the restrictions. They should also press for greater transparency of FCRA licence determination.
I will finish with the words of Amitabh Behar—the chief executive of Oxfam India, whom I met on a recent Zoom seminar—about what is happening in India. He told the BBC:
“The Ministry of Home Affairs’ decision to deny renewal of FCRA registration will severely hamper these collaborations which were providing relief to those who needed it the most during times of crisis.”
I hope the Minister will be able to reassure us that Her Majesty’s Government recognise the importance of this issue, and that the influence of her Department will be brought to bear in order to promote freedom of expression, even where it makes Governments uncomfortable at times.
Derek Twigg (in the Chair)
If it is helpful, Minister, the debate needs to finish by 16.43. It is a matter for you whether you take all the available time.
The Minister for Asia and the Middle East (Amanda Milling)
Thank you, Mr Twigg. Fortunately, I wrote down the time that we started, so I have had an eye on what time I need to sit down. It is a real pleasure to serve under your chairmanship, and I thank the right hon. Member for East Ham (Stephen Timms) for securing the debate. I also thank hon. Members who have contributed to it. It is always a pleasure to see the hon. Member for Strangford (Jim Shannon)—I think we have been in this Chamber several times over the last couple of days—and the hon. Member for Manchester, Gorton (Afzal Khan), and I will address some of the points that have been raised.
It is important to start by saying that the Government firmly believe that a vibrant civil society is central to any democracy. NGOs and civil society organisations in the UK and overseas make huge contributions by holding Governments to account and promoting respect for human rights. The Government support and work with a wide range of NGO partners through our programmes around the world, including in India. India is the world’s largest democracy, and it has a proud democratic tradition and a history of inclusive government. As with all democracies, we look to work with the Government of India to uphold their democratic values, norms and principles.
The Foreign Contribution (Regulation) Act, which is otherwise known as FCRA for the benefit of brevity, regulates how NGOs and other civil society organisations can receive foreign funding for their programmes and activities in India. Versions of the legislation have been in force since 1976. It was amended by the previous Government of India in 2010, and by the current Government of India in 2020. Any NGO that receives foreign funding now needs to apply for a FCRA registration number and renew its registration every five years. Since the FCRA was last amended, a number of NGOs have had their applications to renew foreign funding licences rejected, and I will talk about the number of cases in a moment. They include organisations with which we work directly, and it has had a significant impact on their ability to operate. As has been mentioned, some organisations, such as Missionaries of Charity, have succeeded in having their registration restored, but others have not. The UK’s strong and growing partnership with the Government of India enables us to discuss concerns where we have them. We continue to believe that NGOs make a vital and positive contribution to society. As with all countries, we will always welcome more progress on these issues.
Through the British high commission in New Delhi, we monitor developments relating to the Foreign Contribution (Regulation) Act. In particular, we look out for any impacts on UK Government-funded programmes and the work of British NGOs in India. We talk to the NGOs affected and encourage them to seek recourse, including through the Indian courts, where it is appropriate. We have also raised their cases with the Indian Government directly, at ministerial and senior official levels. That includes the issues faced by Oxfam India, the recent cancellation of the foreign funding licence of the Commonwealth Human Rights Initiative, whose headquarters are in Delhi, and the freezing of Amnesty International India’s bank accounts.
As mentioned by the right hon. Member for East Ham, in February the Home Office permanent secretary raised difficulties facing Oxfam India with his Indian counterpart, during our home affairs dialogue.
Jim Shannon
This has been a week where we have been regularly in debates, as the Minister knows. The figures are that 12,580 NGOs had their licences revoked. That is reaching almost epidemic proportions. Has the Minister had a chance to oversee that number of organisations? If so, is there a programme of trying to address all those 12,580 NGOs that have had their licences revoked? I do not expect an answer today.
Amanda Milling
The hon. Gentleman is passionate on so many different issues, particularly defending freedom of religion or belief. Regarding the number he referred to, we do raise cases with the Government of India directly. I would happily pick this up after the debate and write to Members.
Stephen Timms
I welcome the intervention of the Home Office permanent secretary. Can the Minister tell us whether the case of Oxfam India has been taken up by Ministers, perhaps by the Prime Minister when he recently visited India?
Amanda Milling
With regard to the case of Oxfam India, the British high commissioner to India met with the CEO of Oxfam India on 14 January, to understand their concerns and offer support. As I said, that was discussed by the Home Office permanent secretary during the home affairs dialogue in February, as well. Turning to Amnesty, we remain in contact with Amnesty, and officials last met Amnesty International UK on 4 May this year.
In addition to financial regulations, some NGOs and civil society activists have faced difficulties in India as a result of security legislation. We have also raised that issue with the Government of India. Our relationship with India is very important and central to our foreign policy tilt towards the Indo-Pacific. Our 1.6 million diaspora community provides a unique living bridge of people, commerce, ideas and culture between our countries. A year ago, the UK and Indian Governments committed to strengthen our relationship through the new comprehensive strategic partnership.
Afzal Khan
There is no doubt about the importance of our good, strong relationship with the Indian Government but, as I said earlier, Mohammed Yasin Malik and other Hurriyat leaders have today been given life sentences for a very basic thing—wanting freedom. It is India that is occupying that place. As good friends of India, should we not be reaching out and telling it to obey the UN resolutions?
Amanda Milling
There are a couple of points I want to make. No aspect of our strong relationship with India prevents us from speaking frankly about issues with it. On the case that the hon. Gentleman refers to, we are monitoring the trial. We note that Mohammed Yasin Malik has been charged under Indian law, and we cannot intervene in the independent judicial process of another country, but we urge all countries to respect and uphold their international obligations regarding the treatment of detainees. These strong relationships enable us to have meaningful dialogue, and we can speak frankly where necessary.
Our relationship with India supports regional and global security and prosperity. A year into the road map, we have made excellent progress. As has been mentioned, the Prime Minister visited India last month to build on it further. He and Prime Minister Modi discussed the need for democracies to work together. On regional global security, they reiterated their commitment to transform defence and security relations and enhance co-operation in support of a free, open and secure Indo-Pacific.
There are lots of other areas of importance, such as joint work on research and development to deliver next-generation capabilities across land, sea, air, space and cyber. The Prime Minister also announced a raft of commercial agreements to boost our trade, investment and technology partnership. During the visit, UK and Indian businesses confirmed more than £1 billion in new investment and export deals in sectors from software engineering to health, creating almost 11,000 jobs in the UK.
Our Prime Minister also set a target to conclude the majority of talks on the comprehensive and balanced free trade agreement by the end of October 2022—a deal that could supercharge our trading relationship and boost jobs and wages here in the UK. Moreover, the Prime Ministers underlined their firm commitment to take ambitious action on climate change, and co-operate closely to deliver on the Glasgow pact. The visit reflected the breadth and depth of our relationship, and how it continues to deliver for the people of both countries.
Stephen Timms
I am grateful to the Minister for setting out the increasingly close nature of the relationship. Can she assure us that Ministers will make representations to the Indian authorities about the position of Oxfam India in order that it can continue to obtain income from outside the country?
Amanda Milling
As I have said in relation to a number of cases, hon. Members should be reassured that they are raised by senior officials and Ministers. We continue to monitor and raise the difficulties faced by some NGOs in India. We also continue to support Indian civil society and NGOs through programmes and the endorsement that comes from our relationship with them.
Our relationship with India, as democracies and friends, is important and will continue to grow. It is a partnership with the potential to deliver for the people of both our countries and beyond.
Question put and agreed to.
Resolved,
That this House has considered the impact of India’s foreign contribution law on NGOs.
Agriculture Sector: Recruitment Support
(2 years, 5 months ago)
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Wendy Chamberlain (North East Fife) (LD)
I beg to move,
That this House has considered recruitment support for the agriculture sector.
It is a pleasure to serve under your chairmanship, Mr Twigg.
The agriculture sector and those who work in it are the backbone of our nation. With energy prices soaring, food shortages looming and concerns over our global supply chains, this debate is incredibly timely. Farmers must be listened to, and my hope for the debate is that we can air some of their voices and fears, and address what it is that they actually need. I hope that the Minister will deal directly in her response with some of the points that I raise. Farmers in rural communities are listening and waiting for real answers.
I will cover two sides to recruitment support. The first is farmers’ specific need to recruit workers now—they need them to harvest crops, tend to animals and make sure that we get produce into our supermarkets and on to our plates—and to secure a labour supply for the years ahead. The other is more holistic. There are almost half a million people in the agricultural labour force in the UK. The rural economy, and farmers in particular, are arguably being ignored, putting the entire industry and all those livelihoods—and, arguably, the wider rural economy—in danger.
Let me start with the direct interventions. I acknowledge that the seasonal agricultural workers visa, which is a critical issue in my constituency of North East Fife, falls under the remit of the Home Office, but I hope that the Minister can confirm that her Department has conversations with the Home Office and advocates for the needs of the farming community. The scheme has been beset by problems since its inception. Last year, sponsors were brought into the scheme too late, leaving farmers scrambling to secure their workers for harvest. Farmers have been unable to plan for this year or the years ahead, with announcements about the number of visas and how the scheme would operate made as late as December. Now it is harvest time for those summer foods we love so much, such as asparagus, salad and fresh fruit—North East Fife is famed for its soft fruit—and for flowers and plants for our gardens and homes. For that, we need workers.
I spoke directly to farmers in my constituency yesterday, and at the weekend I attended the Fife show in Cupar. That was the first time the show had been held since covid, and the first time I had attended as MP for the constituency. I have engaged with the National Farmers Union of Scotland and local NFUS members, and they tell me that there are simply not enough seasonal workers, that those who are coming are coming too late, that there is no time to provide training, and that the costs associated with them are going through the roof.
We were promised 30,000 visas. They have been issued—I am grateful for that—but that simply is not enough to cover all the farms in the UK. The Government have told us that that number was based on last year’s figures. In many ways, that might seem logical, but I wrote to them last year warning that it would not work, and I know that the NFU warned them too. I am sure that MPs from rural parts of the country will have heard the same from their constituents.
The delay in setting up the scheme last year meant that not enough farmers were able to apply. For some, the picking season was half over before workers were able to arrive—that was particularly true in Scotland. This year, more businesses are eligible to get workers under the scheme, as one of the few improvements is the inclusion of the horticulture industry. Like the SNP spokesperson, the hon. Member for Edinburgh North and Leith (Deidre Brock), I am a member of the Scottish Affairs Committee, and we were pleased to visit the horticulture industry in Perthshire earlier this year. However, as a result of its inclusion, 30,000 visas arguably is not enough.
We have been promised 10,000 more visas, but as yet they have not been released. I hope that the Minister will give us an update or go and speak to the Home Office and report back, because those additional visas are needed as soon as possible. When I asked my farmers in North East Fife yesterday what one thing they wanted me to impress upon the Minister in this debate, they said that they need those visas immediately. That is the thing that would make a fundamental difference to them.
When those visas are issued, we need workers to get access to them and then to be able to travel without delay. The farm in North East Fife with its soft fruit crop needs to know the date when its workers will arrive so that it can plan to train them and get its plants picked—we all know that strawberries do not stay fresh for long. What it does not need is what is happening now. Delays in visa processing mean that workers are arriving seven to 10 days later than expected. That might not sound like a lot, but when people are staring at their investment and livelihood, knowing that their chance to realise it is time-critical, seven to 10 days is a lifetime. Arriving late means crops might start to go over and workers will need to be rushed straight to harvest without time for enough training. There are safety implications from that, and we know that there are safety concerns in the industry at the best of times.
Historically, a significant number of workers coming to the UK have come from Ukraine. That is clearly not the case this year, meaning that many staff are new to the task and are not returning as they have done in previous years. They need training to work efficiently and well. Training, which takes time, is not available if they arrive late.
There is a very real side to all this. I was told yesterday of people having to choose between picking their harvest or planting their crops. I have been told of farmers who are already making decisions not to plant next year. They are making decisions to either let fruit rot or face empty fields down the line. In some respects, it is simple. Do the Government want a food shortage now or next year? If nothing is done, that is the inevitable outcome.
I have set out the immediate short-term crisis. I also want to know about the Government’s long-term plan to provide recruitment support for the agricultural sector. Every expert in farming and migration in food supply chains says that we cannot rely on domestic workers alone. We are now seeing the tightest labour market in decades, with staff shortages everywhere. Migrant workers will continue to be a feature of farming recruitment. That is the simple fact. For the arable farmers I have talked about, that means securing a future or some certainty around the seasonal agricultural worker scheme. That means announcements for years ahead being made now so that they can plan accordingly.
Our food supply may be just-in-time, but business planning is not, and just like any other business, farmers need certainty to plan. Indeed, the Environment, Food and Rural Affairs Committee recommended earlier this year that announcements be made on a five-year rolling basis. I ask the Minister if she will endorse that plan. It also means considering whether more visas need to be made available. I would argue that the data used for this year’s allocation is flawed. The Government must make a proper analysis, looking at demand on a month-to-month basis, to assess what farms actually need to function.
For livestock farmers—I am aware I have not yet mentioned them—future planning requires a proper, long-term solution in order to get the skilled workers they need. We can all remember last year when a lack of butchers led to thousands of animals being culled. The Government responded by issuing emergency short-term visas, but that was too little and too late. One of the issues with these skilled workers is the English language requirement. We can agree that having some level of English—and I have already mentioned safety—will be useful for workers to do their jobs well and to fit in with their wider communities. However, the amount of English needed to work as a nurse and as a butcher are arguably very different. I ask whether consideration is being given to having some flexibility in those rules.
Part of the picture in the long term will be the recruitment of more domestic labour. Agricultural workers and farmers are an ageing cohort, with fewer and fewer young people being attracted. Indeed, in my constituency we have the Scottish Rural University College in Cupar, and I have visited it on a couple of occasions to look at the people who are coming through. There is a big growth in dog grooming, but we are not seeing the numbers that we need coming into other parts of the industry. To reverse this trend, we must make farming an attractive profession. It must start from school, with vocational training and appropriate signposting in job centres. I hope the Minister will say what conversations she is having with the Department for Work and Pensions in that regard.
Turning to the agricultural sector more generally, what is the Minister’s plan to support businesses? In Scotland alone, the sector employs 67,000 people directly and supports a further 320,000 jobs. The rural economy is massive. At a time when the Government are saying they want to secure our domestic food supply, what is their actual plan to put food on our plates? If their goal is to have us eating British food and not to suffer shortages from global supply chains that are disrupted, they are failing. In the first three months of this year, we imported an extra £1.7 billion worth of food and live animals compared to the end of last year.
There is lots that the Government could but are not doing to secure the future of British farming. Farmers are under extreme financial pressures, like many of us. Grain prices are up. Energy and gas prices are up. Fertiliser prices are up a staggering 200%. To top it all off, the Government have increased the labour bill by imposing an additional wage requirement for workers under the seasonal agricultural worker scheme.
Many of the farmers I have spoken to entered into contracts to sell their spring produce last year, agreeing a price based on the actual legal minimum wage. I completely understand that supermarkets and other shops do not want to increase prices on the shelves because of the cost of living crisis that people are experiencing. However, the Government’s late decision to impose that higher minimum wage cannot be passed on by farmers, so it is taking money directly out of farmers’ pockets.
Profit margins in farming are tiny. There are a lot of hard-to-control variables, such as the weather, pests and plants simply not thriving. Imposing unavoidable costs on farmers is beyond unhelpful. Can the Minister say what the Government plan to do to support farming communities during this cost of living and cost of farming crisis? What conversations have taken place with the Home Office in relation to this wage requirement?
Let us look to the future and long-term investment in the rural economy. It is inevitable that more and more agricultural processes will be automated, but that requires investment and training. Are the Government consulting farmers? Where is the plan for support? The sector needs confidence to move forwards. Meanwhile, the Environment, Food and Rural Affairs Committee reports notable concerns about the mental health and wellbeing of those in agriculture. Clearly, something is not adding up.
Finally, what are the Department’s plans to monitor the impact of other Government initiatives on the agriculture sector? International trade agreements are being made with seemingly no thought to the need to protect our farmers, who have higher welfare standards, from cheaper competition. The Subsidy Control Act 2022 controversially includes farming subsidies in its scope, even though they have always been excluded from state aid regulations. The Act also risks undermining the devolved Governments’ abilities to make policies to support their own farming communities with their own specific needs.
Farmers are vital to this country, but they have been let down by this Conservative Government for too long. Recent media reporting shows that the Government know that, and so do farmers. I want farmers to not only survive, but thrive. I want food on our shelves and on our plates. I have been listening to farmers in North East Fife and their needs are clear: 10,000 seasonal worker visas now, an end to Home Office delays, a long-term plan and investment in their future. I look forward to the Minister’s response.
Jim Shannon (Strangford) (DUP)
I am always happy to support the hon. Member for North East Fife (Wendy Chamberlain) in the debates she brings forward. Obviously, when I saw the subject of this debate, I wished to participate. It will be no secret that I declare an interest as a member of the Ulster Farmers’ Union. Back home, we own land; we are farmers.
The Minister will know that I am especially pleased to see her in her place, because I know that she is someone who sets out to give us answers. I am very pleased with that. I also look forward to the contributions of the two Front-Bench spokespeople, the hon. Members for Edinburgh North and Leith (Deidre Brock) and for Cambridge (Daniel Zeichner).
I want to make three points. My first point is about a scheme that is already in place. Secondly, I will refer to the contributions from the Department of Agriculture, Environment and Rural Affairs back home in Northern Ireland and the young farmers’ clubs. Thirdly, I will refer to the visa scheme, which the hon. Member for North East Fife referred to in some detail. As the Member of Parliament for Strangford, I represent a very urban but also very rural constituency, so I am greatly exercised by this issue. I am particularly pleased to speak in this debate and congratulate the hon. Lady on bringing it forward.
Last week, I learned of a scheme—it was one I had not been aware of—because of an event held in this House. I was particularly encouraged to attend, especially when I found out exactly who was there. It was the 10-year celebration of the McDonald’s progressive young farmers programme. I know that the hon. Member for North East Fife was there. From the moment I walked into the Churchill Room, I was beset by Northern Ireland accents. It is such a pleasure to come here and hear my accent bouncing back from other people in some numbers—it is quite unusual in Westminster.
Of the four young people speaking, two were from Northern Ireland. One was young Carys Martin from Greyabbey in my constituency. When she told me who she was, I knew at once—as you do, Mr Twigg—that I knew her mother and father, as well as her grandfather, Billy Martin, who used to be the president of the Ulster Farmers’ Union in Northern Ireland. It is a family that is steeped in agriculture production. There were three other young farmers—one was from the constituency of my hon. Friend the Member for Upper Bann (Carla Lockhart). It is great to see our prominent agrifood work being recognised by McDonald’s. It is a great scheme.
Over the past 10 years, the programme has given progressive young farmers the opportunity to kick-start their careers in the food and farming industry by spending a year with McDonald’s, tracing every step of the supply chain. Throughout the programme, they receive mentorship from a host farmer, as well as some of the UK’s leading food supply companies, and gain in-depth experience in key agricultural sectors. This is a smashing scheme, one that does just what the title of the debate says: recruitment support for the agriculture industry.
The young people on the placement develop the broad range of knowledge needed to succeed in today’s world of food and farming. McDonald’s success in the United Kingdom and Ireland is underpinned by British agriculture. I am always very proud to say the United Kingdom of Great Britain and Northern Ireland—I have said it so many times. It is not meant to be offensive to anyone; it is how I feel. I feel the strength of the Union.
McDonald’s said:
“We are committed to sourcing quality ingredients and spend approximately £1 billion each year on our British supply chain.”—
that is significant, and tells us how important the scheme is. They continued:
“As part of that, we work with over 23,000 farmers across the country to source our products. All our beef is 100% British and Irish and we source all our pork from British, RSPCA Assured farms.”
What a wonderful programme this private enterprise has taken on and committed to over the last 10 years. How great to see Northern Ireland playing such a prominent role. The question we must ask is: are we supporting our young farmers and agri-workers in the same way. I believe we are, through the schools and colleges.
I move on to my second point, about the young farmers’ clubs of Ulster and those across this whole great United Kingdom of Great Britain and Northern Ireland. I used to be a member of the Ulster young farmers’ club when I was a wee boy in Ballywalter, which was not yesterday. It was a social occasion, but the activities it involved encouraged recruitment support for the agriculture sector, the very title of the debate—good things happen. We have Greenmount college as well.
I know that Minister Edwin Poots of the Department of Agriculture, Environment and Rural Affairs meets the Minister regularly—they both tell me the same—which shows a strong governmental and ministerial partnership and input, which is beneficial for everyone, which is really good. I am greatly encouraged by what happens.
I move to my third point, about an issue that the hon. Member for North East Fife referred to. I voted leave in the referendum. By the way, it was a vote for the whole of the UK to leave, and not this—with respect—piecemeal deal that has so adversely affected people throughout the country, particularly in Northern Ireland. We are looking forward to addressing that issue with the support of the Prime Minister and others.
When I voted leave, it was with the understanding that farm workers would continue to have easy access to and fishermen would have easier access to our visa programme. The Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster), has been incredibly helpful in his support for the fishing organisations. The Minister here today works with them regularly—in the corridors of Westminster last week, she told me she had occasion to meet the representatives of the two fish producers organisations, Harry Wick and Alan McCulla. I know she looks forward to that and that they do as well. It is always about how we can help, which is why the Minister is appreciated so much by the fishing organisations.
Some of the agrifood producers, such as Willowbrook Foods in my constituency, have highlighted the fact that things are still complex. I know it is not the Minister’s responsibility, but we need to smooth those issues so that we can offer greater support to ensure that no harvest is left in the field and that producers have the support they need. Willowbrook Foods was very keen, along with Mash Direct—two of the major producers in my constituency—to offer help to the Afghan refugees. They were the first people to contact me. The war started on the Saturday and on the Sunday, they were on the phone to say, “Jim, if any of those refugees need placements or jobs, we are here.” I am always greatly encouraged by those who take their hands out of their pockets, get them dirty and do the work. Those people—those two companies—are examples of just that.
I will finish by saying that we must offer greater support to ensure that no harvest is left in the field, and that producers have the support they need. McDonald’s has sown into their programme; are we sowing to meet our needs? If not then, to the best of our ability, can we do better? I genuinely look forward to the Minister’s response. I have in Strangford a constituency that I believe is second to none—no offence to any other Member of Parliament, by the way. I see people who want to help, and I think that is what the Minster is looking for.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure to serve under your chairmanship, Mr Twigg, not least because you are so lenient. I appreciate you giving me the opportunity to speak, given that I was not here at the beginning.
I pay tribute to my hon. Friend the Member for North East Fife (Wendy Chamberlain) for introducing this debate on the hugely important issue of recruitment in the agricultural sector. If we enjoy the benefits of eating food, if we enjoy the environment, if we think tackling climate change is important, and if we think water management and flood prevention or tourism and hospitality are important, then we should be very grateful to our farmers and those who work in agriculture. We should be determined to protect that industry, not do it harm.
My great concern is that the average age of a farmer in the United Kingdom is 59. The Government are transitioning from the old common agricultural policy to the new environmental land management scheme, and while there is a golden goodbye programme in that scheme, which many people will take advantage of, there is no golden hello. My concern is that we are seeing people leave the industry, but we are not seeing people coming into it, either from farming or non-farming families.
The recent closure of Newton Rigg College, an agricultural college outside Penrith for the UK’s second-largest farming county, was outrageous and unnecessary. The Department of Agriculture, Environment and Rural Affairs in Northern Ireland directly fund agricultural education there. Why could we not do that in the UK, given that we now have that freedom? Why did DEFRA not choose to invest in saving our college in Cumbria, so that we can reach farming families while also recruiting people from other communities to be the farmers of the future? That seems a terrible wasted opportunity, and I call upon the Government to put it right, even at this late stage.
Young people are not likely to be attracted to agriculture if the opportunity to make a living is badly reduced. The hon. Member for Strangford (Jim Shannon) talked about his support for leaving the European Union. Members will know that I did not agree with him on that. Nevertheless, if I was asked to find positives of us being outside the European Union, I would pick getting away from the perverse incentives of the common agricultural policy.
There is an opportunity for the UK to build a better agricultural policy than the one that we used to have and are moving away from—if we do things right. The intention of the Government to move towards the environment land management scheme, and public money for public goods, is good. I want to be clear that in principle the Liberal Democrats agree with that. My concern is that the transition is being botched, which will damage farming and recruitment into farming, thereby damaging our ability as a country to feed ourselves, care for our environment, and provide the backdrop to the hospitality and tourism industry that is vital to my community and those in the south-west, as well as rural places such as Northumberland and other rural parts of this country.
I have got about 1,000 farms in my constituency. Every single one of them has lost 20% of its basic payments this year. Of those 1,000 farms, a grand total of 13 will be getting something through the new sustainable farming incentive. What does it mean for recruiting people into farming when they realise that farm incomes are evaporating and new sources of income are not available any time soon? If we care about recruitment into agriculture, surely it makes sense to park the reduction in basic payments while we continue to develop the new environmental scheme, so that we can recruit people into agriculture.
There is a huge problem in rural communities such as mine. Cumbria is the second biggest agricultural county in England—the biggest is Devon. There has been a 70% drop in the number of private-rented properties available to local people in the past two years. Why? House prices have gone bananas because of a huge increase in demand for holiday lets and an increase in the number of Airbnbs. What has that done? It has squeezed out the working-age population. That is affecting Devon and Cornwall, Somerset, Cumbria, North Yorkshire, Northumberland and other rural communities. That is why action is needed right now.
In our community, hospitality, tourism and agriculture are absolutely intertwined. So many farms are viable only because they have diversified into the hospitality and tourism market. If I say that last year 63% of hospitality businesses in Cumbria were operating at less than capacity because they could not find enough staff, that gives a sense of the recruitment crisis facing much of rural Britain. It is caused by three basic issues.
The first is the lack of affordable housing for people to live in. If there is nowhere for the working-age population to live, there is no working-age population and no workforce. That is why, despite the huge demand for tourism businesses last year, there was no availability. People could find a house to stay in for a week, but they could not find anywhere to eat or drink, or any way of having a pleasurable experience on a lake, because no one could recruit any staff.
The lack of affordable housing for a local workforce is a crucial part of the crisis, and the Government’s failure to have sensible visa rules is another. If we want to control our borders, great. But why not control them in our interests rather than doing ourselves damage? There is a desperate need for us to use youth mobility visas, for example. We have spoken to the Home Office about them to ensure that we try to do something to arrest the agricultural and hospitality labour shortages.
Finally, we have huge distances to cover in areas such as ours, with very expensive travel and a lack of affordable and accessible bus services. That is another major reason why there is a problem. There is no doubt that in communities such as mine and in Devon, Cornwall and other rural parts of the United Kingdom, a staffing shortage—a recruitment crisis—is undermining hospitality and tourism and undermining agriculture. If we undermine agriculture, particularly at a time such as this, we run the risk of not being able to feed ourselves as a country, which will make us more dependent on imports from other countries. We will put ourselves in the morally questionable position of fishing in the same markets for grain as the poorest countries in the world, thereby inflating the prices they pay or robbing them of the grain altogether.
I would argue that the farming policy the Government are now enacting, which is almost deliberately designed to reduce the amount of food that Britain produces and the number of farmers Britain has, is not just strategically stupid but morally abhorrent.
Deidre Brock (Edinburgh North and Leith) (SNP)
It is a pleasure to serve under your chairship, Mr Twigg, and I commend the hon. Member for North East Fife (Wendy Chamberlain) for securing this important debate. Things are at a crisis point in some parts of the UK. I was shocked to discover that seasonal worker shortages of up to 75% have been reported in some parts of the UK. Many food producers, farmers and horticulturists have very real fears that there will not be enough labour to pick their crops this year.
The hon. Member for North East Fife outlined very well the various problems experienced with the seasonal agricultural workers visa scheme and spoke movingly about the conversations she is having directly with constituents who are deeply affected by these problems and shortages. The Government often talk of the low employment rate in the UK—as we all know from sitting in the Chamber, they like to mention it frequently—but the consequence is that there are not enough workers to fill the gaps in supply.
The hon. Member spoke of food security and domestic production—I shall return to that soon—as well as about the increased reliance on imported foods, and asked how farming communities will be supported. She also mentioned automation, which I have to say seems like an impossible dream for many farmers. It is simply beyond their ability to afford the sorts of mechanical pickers and diggers that could make the difference and make them less reliant on agricultural workers’ support. It kind of irritates me, to be honest, when it is spoken about as though it is an easy option for your average farmer when it just is not.
The hon. Member for Strangford (Jim Shannon) did a fine job of speaking up for McDonald’s and its farming support scheme, and he usefully outlined the more general need to attract young entrants to farming. If that is not addressed rapidly with genuine support for younger entrants, the sector will experience problems in the face of an ageing and retiring farming population.
The hon. Member for Westmorland and Lonsdale (Tim Farron) continued on the importance of doing everything possible to attract new entrants to farming and ensuring that farming continues to be an attractive option. That is such an important point. If young farmers—they might be sons and daughters of farmers—look at the work that their parents go through to make farming a viable career, and think that it will just not be worth it because they do not make enough money to survive, that will clearly affect who becomes a farmer in future. The hon. Gentleman also spent time dwelling on the effects of Brexit, to which I will return, as well as, crucially, the recruitment crisis in rural areas—not simply in farms, but in hospitality and the other organisations around farming that rural communities rely on so heavily.
The SNP has long warned that the obsession of some in this place with Brexit and ending freedom of movement would cause significant problems. The EFRA Committee confirmed in March what we have been saying for years: that although the pandemic certainly exacerbated labour shortages, their cause was ultimately and largely Brexit. We must remember that a disproportionate share of the UK’s agricultural workforce—14%—is employed in Scotland. The labour challenges that our industry faces will be keenly felt, as we have heard, and industry bodies have repeatedly cited the shortage of labour as the biggest challenge they face—and they say that, let us not forget, in the face of rocketing prices for fuel, fertiliser, seed and feed, among many other extra costs.
Scotland’s horticulture industry, for example, has grown significantly since 2013 thanks largely to freedom of movement. Here is another extraordinary statistic: until the last two years, 99% of seasonal workers in the horticultural sector came from outside the UK every season. Since Brexit, the number of full-time staff has been plummeting, which threatens the delivery of home-grown produce and the viability of so many business. That was made clear to the hon. Member for North East Fife and me when we visited, with Scottish Affairs Committee colleagues, horticulturalists and soft fruit providers in Perthshire and near Dundee. Those providers made it clear to us that without support, their businesses could, and in all likelihood would, go under.
That view is supported by the UK Trade and Business Commission, which found that workforce shortages as a result of leaving the EU have crippled businesses across the country. The commission’s annual report identified a “unique set of challenges” for small businesses in Scotland and Wales, which are made worse by
“the UK Government’s general reluctance to seriously consult with the devolved administrations, whether on trade policy or economic support schemes.”
We have made cross-party calls to tailor immigration policy to suit Scotland’s needs, for example, and I am sorry to say that they have been repeatedly ignored. In January, our Holyrood Parliament voted in favour of calls for the UK Government to reform the immigration system and commit, with the Scottish Government, to a joint taskforce on labour market shortages. The Scottish Government then had to make 19 requests before the Minister for Safe and Legal Migration attended a meeting. I hope that the Minister here today will take that up with her Home Office colleagues.
That was extremely disappointing and brought back memories of a predecessor in that role, who insisted that she would not give any extra powers to Scotland that she would not also give to Lincolnshire. That comment enraged not a few in Scotland. The difference between the second largest nation in the Union and a single English county council seems fairly obvious. Of course, that is not to say that there is not a case for differentiation between English regions as well. The Migration Advisory Committee has acknowledged the need for a more bespoke approach, especially for more remote communities. I wonder whether the Minister can tell us how the UK Government are evaluating that in detail. What proper consideration has been made of that advice? It would be really helpful if she could tell us that, because of the importance of this issue to remote areas and the people who live in them.
Of course, migration is a key lever to address depopulation. Scotland’s rural communities are suffering from a real decline in the working-age population, and the salary threshold for the UK’s immigration system and the shortage occupation list are not attracting working-age people to them. As a consequence, Scotland’s Cabinet Secretary for Rural Affairs and Islands wrote in January to inform UK Ministers that the Scottish Government intended to press ahead, along with local government and business partners, and explore three proposed models for a rural migration pilot—as the Migration Advisory Committee recommended—to help to address rural population decline and the employment problems those areas are experiencing. The proposals were: expanding the skilled worker route, a Scottish visa aimed specifically at designated areas within Scotland, and a remote and rural partnership scheme. I would be interested to hear the Minister’s thoughts on those.
That was followed up in February with a joint letter from the three devolved Administrations, which was prompted by the UK Government’s failure to work constructively on the respective migration needs of each nation. That letter called on Ministers to revisit urgently their previously proposed 12-month temporary worker route and called on the Home Office to immediately reintroduce regular quadrilateral meetings with the devolved Governments. I do not know how much say the Minister could have on that, but that would be a useful thing to reintroduce and would go a long way to mending relations with the different devolved Governments.
Unfortunately, the UK Government also failed to consult with the devolved Administration on their introduction of narrowly targeted, short-term temporary visas, which many in the industry just feel is too little, too late. The EFRA Committee’s report, which I referred to earlier, identified criticisms of that scheme relating to the number of visas, the timing of their launches, the duration of the visas and the choice of operators to run them. For example, Scottish Land and Estates wrote that the schemes for the poultry sector and HGV drivers
“would appear to be wholly inadequate and unlikely to have a material benefit”.
As we have already heard from other Members, the cap of 30,000 on the seasonal workers pilot falls far short of the 70,000 visas per year that farmers’ unions have asked for. NFU Scotland and many others have warned that if the cap is not increased, we will again see millions of pounds-worth of crops lying rotting in the fields.
The fact that Ukrainians have made up 60% of the seasonal workers scheme since the UK left the EU only adds to the uncertainty. Russia’s appalling war is causing devastation in Ukraine, as we all know, while also threatening the security of food supply chains right across the world. Our farmers have long warned about skyrocketing costs for fertiliser, fuel, energy, seed and feed, and the conflict has unfortunately escalated those concerns.
In that context—as again has been commented on, I think, by every Member who has spoken so far—promoting sustainable and resilient domestic production is even more important, but that is not possible without the workforce. Of course, domestic production is also further undermined by the pursuit of laissez-faire post-Brexit trade deals and the possibility of importing cheaper food with lower environmental and animal welfare standards.
The Scottish National party has repeatedly asked for immigration to be devolved to Scotland, so far to no avail, but at the very least we want to see immigration policy being greatly overhauled and properly targeted, with genuine collaboration between the Home Office, DEFRA and the devolved Governments, to ensure that we attract the seasonal and permanent staff that our industries desperately need. I hope that we can hear from the Minister about the discussions she is having with the Home Office on this really important matter and the progress that DEFRA is making in this area.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve with you in the Chair, Mr Twigg. I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing the debate, and introducing it in such a calm and measured way. We have heard excellent speeches, and the point raised by the hon. Member for Westmorland and Lonsdale (Tim Farron), about the failure to introduce a scheme to bring people into farming, having introduced a scheme to get them out, speaks volumes.
The hon. Member for North East Fife was calm, but frankly I think we should be angrier because what is going on is a shambles. The front page of the Farmers Guardian this week says “Exodus”, because of the people leaving. Vegetable growers are planning to switch out of vegetables to go into cereals, which is exactly the opposite of what we would like to see. The Government should hang their heads in shame, although not this Minister, as I think the problem lies mostly with the Home Office, which is a Department that seems always to be capable of making a bad situation worse.
This afternoon, we are electing a new Chair of the EFRA Committee. Before Christmas, the previous Chair was incensed by the performance of one of the Home Office Ministers, who was incoherent on the language requirements. Frankly, some of this is so bad one could not make it up. The Conservatives were once the party of business, but they are now the party driving business out of the UK.
The severity of the crisis has been clear for a long time. In August last year, a group of many major organisations—the NFU, the Food and Drink Federation and so on—commissioned a report from Grant Thornton, which pointed out that there are over half a million vacancies out of 4.1 million jobs in the food and drink sector. That situation is only getting worse. We have heard some of the figures, including a 75% shortage of seasonal workers in parts of the UK. As has been said, the situation has now been exacerbated by the tragedy in Ukraine, as last year 67% of seasonal agricultural visas went to Ukrainians and 11% to Russians and Belarusians, so the situation will get worse.
There is an irony in all this, in a sense, because it looks as if we will have to turn to other parts of the world, which will mean bringing people into the UK from further and further afield. These are not people who are returning to the UK as normal, with the requisite skills, which adds to costs and makes things even more difficult for businesses.
Let me focus on a couple of sectors. We have often talked about the pig sector, which was one of the first to feel the problem. Partly because of the lack of pork butchers, we have ended up with 200,000 pigs backed up on farms and 35,000 healthy pigs culled. That was caused by a mix of factors, but frankly it was because the Government waited too long and were too slow to act, exactly as has been said by other hon. Members.
The horticultural sector is suffering enormously, with some businesses reporting workforce shortages of between 20% and 50%, which is far worse than in the first half of the year. I visited one of our major rose growers in the east of England, which was at pains to point out just how much it depends on a few, key skilled people, whom it cannot get nearly as easily now, because of the difficulties in getting in and out of the country. What will that grower do? It will move production somewhere else—not in this country. That is quite incredible. As we come up to the pinch point for the soft fruit industry this year, I fear that the same will happen again.
We have heard many of the figures. It is extraordinary how slow the Government were to act when they were warned. Looking back at discussions before Christmas, it is extraordinary that some decisions were left right up until the verge of Christmas itself. The number of visas available was much discussed and negotiated, but it was still nowhere near the number that we need.
The Horticultural Trades Association and the EFRA Committee have called for an additional 10,000 visas. The NFU says demand could be as high as 55,000. We are told that another 10,000 visas may be available at some point, but businesses will have to wait until the end of June to learn more. Even when they are allocated, I am told by many in the industry that it takes a long time for issues to be resolved and for people to get here. Unite the Union has told me about the poor treatment experienced by many seasonal workers. Will the Minister comment on what her Department is doing to check on this long-standing problem, which is not getting any better?
We need a better plan for the agricultural labour force; we cannot go on like this. Surely we have to start by having a discussion with employers across sectors in order to know the workforce requirement. I am afraid that we are seeing a failure of workforce planning in so many areas; we see it in the health service, but also in the agricultural sector. We need to take into account the workforce that our businesses need.
Of course we want to encourage the indigenous workforce, but I am afraid that we saw the limitations of the Pick for Britain scheme a couple of years ago. It was mired in rhetorical flourishes, but when push came to shove, it did not work. We have to be realistic about these things. It is no good waxing lyrical and pretending that somehow we will magic up a workforce. The choice will be quite simple: if employers cannot find the workers, as in the hospitality sector, businesses will go elsewhere. We are seeing it with our own eyes, so we need to analyse what is needed, have a proper discussion and ensure that we have the skills the country needs. We will then have a vibrant rural economy. If not, we will be relying on imported food in the future, and that is not a good idea.
Derek Twigg (in the Chair)
I confirm that the debate should finish by 5.43 pm. Of course, the hon. Member in charge of the debate should have some time to wind up at the end.
The Minister for Farming, Fisheries and Food (Victoria Prentis)
Do not worry, Mr Twigg—I will not take that long. As ever, it is a pleasure to serve under your chairmanship.
It is true to say that much of this debate is possibly for the Immigration Minister— the Under-Secretary of State for the Home Department, my hon. Friend the Member for Torbay (Kevin Foster)—but I undertake to discuss with him the issues that are specifically for him, and to give feedback as and where necessary. I urge hon. Members either to deal with him directly or to use me as a conduit in the agricultural or fishing space, if that is more convenient.
I, too, thank the hon. Member for North East Fife (Wendy Chamberlain) for securing this debate on an important issue. As I think she knows, I have family links to Pittenweem, so was particularly pleased to hear that the Fife Show in Cupar is up and running again. I hope that she enjoyed that at the weekend, as I am sure many of her constituents did. Her debate has highlighted that there are short-term and long-term challenges to recruitment in the agricultural sector, which was a point ably made by the hon. Member for Strangford (Jim Shannon), who speaks with such authority on farming issues.
I agree with the hon. Member for Westmorland and Lonsdale (Tim Farron) that we should be grateful to our farmers, but I take issue with his fundamental misconception about our future farming schemes. I agree that we need to keep food production at current levels. Indeed, we have ambitions in DEFRA to increase food production—particularly in areas such as fruit and veg, where we traditionally have low levels—which is why today’s conversation is so important. The new entrant schemes will be set out in great detail next year; some details will come out this year, but it was always planned for that point of the agricultural transition.
The hon. Member for Westmorland and Lonsdale and I possibly need to have another meeting. This is not the place to go into great detail on the new farming schemes, but I reiterate that our sustainable farming incentive scheme is open to all farmers this year. There is a soil standard—all his farmers have soil and can apply. The countryside stewardship scheme has been taken up by 52% of farmers, so I am sure that many of his farmers will very much be a part of it too. I know the area well, as my husband comes from just next door to the hon. Gentleman’s constituency, and I hope we will be spending some time there over the next week. The upland farmers in his constituency, and those who farm on marginal land, will need special, bespoke schemes, and tomorrow afternoon I am going to a two-day upland conference to ensure that we make the right choices and put in place the right schemes for them.
The short-term challenges of the pandemic and the war in Ukraine have been considerable. Last autumn, which was obviously before the war but after the pandemic, we provided a range of emergency visa schemes and other forms of support to some food sectors. Several hon. Members have spoken about the challenges in the pig sector. As a result, we have provided a package of measures, including temporary work visas, which did not include an English language requirement, for pork butchers and, of course, the private storage aid and slaughter incentive payment schemes, which have assisted in reducing the backlogs of pigs on-farm. We are now undertaking a really serious review of the pork supply chain, the results of which I look forward to sharing with the House.
We heard from several Members that, before the war in Ukraine, about 78% of seasonal workers came from Ukraine, Russia and Belarus. We have been working closely with our seasonal worker visa route operators—I have met all of them—and they have proved resilient and innovative in sourcing labour from new sources, such as Kazakhstan and Mongolia. There is no silver bullet for meeting the diverse and seasonal labour needs of agriculture. That requires action on three fronts: migrant labour, domestic labour and automation. We cannot—and I never would—ignore the current importance of migrant labour to bring in the harvest, particularly in the horticultural sectors, which have particularly high seasonal peaks in demand.
Following a review of the seasonal worker visa route to date, the Government have decided to place the route on a more substantive footing. I remind Members that this is the only such route for visa applications, because the Government recognise that the needs of horticulture and those seasonal peaks are special and different. The seasonal worker route will now operate until the end of 2024, with a further assessment of need to be made as we reach that point. The visa route will no longer be defined as a pilot. I know that the seasonal horticultural workforce are particularly important to Scotland, which produces so many of our delicious strawberries and other fruits. Scotland uses about 13% of the seasonal worker route.
I reassure the hon. Member for North East Fife that, despite the significant challenges that the Home Office has had to deal with this year in dealing with Ukrainian people coming to this country, the process for dealing with seasonal worker visas is much further forward than it was at this point last year. We currently have about 13,000 workers on-farm, with 13,000 who have already completed the certificate of sponsorship stage of the visa application route. I will continue to monitor that extremely closely with the Home Office. I reassure hon. Members that I speak regularly to the Home Office Minister who leads on this matter, and my team do so probably on a daily basis. We are extremely aware of where in the process the applications are at any one time.
I understand the pressures that farmers are under and their concerns regarding seasonal workers’ pay, but it is important that we make it clear that these are not low-paid jobs; they are well-paid jobs and it is right that they are rewarded as such.
We have expanded the seasonal workers scheme to include ornamental as well as edible horticultural crops, and have generally worked with the Home Office and the four operators to make the scheme as accessible as possible. As the hon. Member for North East Fife said, 30,000 workers can come to harvest for up to six months, with the potential to increase that by up to 10,000 if there is clear evidence of need. We are currently at the stage, just before the main part of the picking season, of evidencing that need, but I have absolutely no doubt that when we can do so, those 10,000 extra visas will be immediately forthcoming.
I am genuinely reassured by the Home Office figures for this year that it has now dealt with the backlog essentially caused by the outbreak of war, and that it is now processing visas in much more normal time. I accept that there was a delay in the last two months, but I am assured by the Home Office that that is no longer the case and things are broadly getting back to normal.
Daniel Zeichner
The 10,000 extra visas would of course be very welcome, but surely that puts extra pressure on the 30,000—the rest. Does the Minister agree?
Victoria Prentis
I am not sure that I entirely understand the hon. Gentleman’s point. I am sure that if we are able to evidence that need, helped by the agricultural sector, the horticultural sector and hon. Members around the country, the 10,000 visas will be forthcoming. That has been agreed with the Home Office, and I have no doubt that that will be the case.
The Government intend to commission a review of the shortage occupation list by the Migration Advisory Committee later this year. My door is always open to hon. Members who want to feed in to what we have to say about it.
We keep reinvigorating the potential of the domestic workforce—I say that as somebody whose first job was picking plants. We need to improve awareness of and access to the jobs on offer, in both primary production and processing. That includes a greater recognition of the agricultural and processing skills, qualifications and the fabulous careers in our sectors. We have always been clear about the need to shift the UK towards a high-skilled, high-wage economy, and business can and must do more to attract UK workers. I appreciate the challenge, particularly for seasonal work, which by its very nature is short term. That clearly means that it is not attractive to much of our domestic workforce in an extremely tight labour market. I commend the efforts by businesses that have taken steps to recruit more UK workers, and I am glad to see steady increases year on year in this space. Real efforts have been made, and there have been improvements in the numbers.
We are working very closely with the Department for Work and Pensions to develop and deliver a long-term recruitment strategy. With key trade associations, we have developed a regional recruitment approach, which is pretty much what the hon. Member for Edinburgh North and Leith (Deidre Brock) asked for. My colleagues in the DWP and I would be delighted to discuss that with her at greater length if she would like. It uses the DWP’s Jobcentre Plus network to foster strong local links between employers and work coaches, and give jobseekers the skills and knowledge they need to enter the sector.
We need to look at the labour and time-saving potential of automation. In many cases in this sector, that will mean machines for moving pallets around. I have never pretended that automation is a complete answer to horticultural labour needs, but more can be done to complement the need for labour and remove some of the jobs that can be done by machines. DEFRA has led a review of automation in horticulture, which will be published soon. It will provide a better understanding of what is required to accelerate the development and uptake of automation technologies in the edible and ornamental sectors.
We know it will take time to have a wide-scale roll-out of automation, but we should be doing it, and indeed we are. There are a number of initiatives across Government to bring such technologies to market as fast as possible, including some of our grant schemes in DEFRA. Our farming innovation programme and farming investment fund have schemes that are genuinely practical and ground-level for farmers to apply for. Indeed, they have done. We had to more than double the money in the scheme because it received such successful, sensible applications from the farming world.
By taking action across those three fronts, we can deliver the workforce needs of agriculture productively and sustainably for the future. I accept that more still needs to be done, and we must do it.
Wendy Chamberlain
I thank all hon. Members who have spoken this evening. As I have a little time, I will make reference to what they said.
I recognise what the shadow Minister, the hon. Member for Cambridge (Daniel Zeichner), said about the work that DEFRA has done and the engagement that it has had. That has been my experience. I have had good engagement with the Scotland Office on my concerns about seasonal agricultural worker schemes, but the Home Office has been a real barrier. The SNP spokesperson, the hon. Member for Edinburgh North and Leith (Deidre Brock), and I sent a cross-party letter with the Scottish Conservatives outlining our concerns about the seasonal agricultural worker scheme after our visit to Arbuckle’s just outside Dundee. We pretty much got a flat rejection of the quite reasonable request that we made.
I will forgive the hon. Member for Westmorland and Lonsdale (Tim Farron) for not hearing my speech, because he is such a great advocate for the farming community in his constituency and elsewhere. I absolutely agree with him. Indeed, I contributed to his debate on second homes, a number of which are in the East Neuk and Pittenweem. We face a real challenge if we want to encourage domestic workers into the sector; if they cannot live near the sector, they cannot work in it.
On automation, there are clearly some parts of the industry—as I have seen, certainly in later parts of the process—where it is not an option. As consumers, we are picky about our soft fruit, and we are right to be. It is difficult to expect it to be picked by anything other than hand. If farmers do not have the certainty of an income, how can they invest? Arguably, it makes our whole industry less competitive. I am always impressed with the diversity with the farming community. Things like retail and accommodation cannot exist if the core farming business is not there.
On the point made by the hon. Member for Strangford (Jim Shannon), I too was at the McDonald’s young farmers scheme event. I met three former participants of the scheme, and it was great to hear that they are all still working in the sector. Our role as policymakers is to ensure that they can stay in the sector. I accept that the Minister and DEFRA are not wholly responsible for all the issues and challenges we have spoken about today, but I believe there is a responsibility to ensure that the Department collaborates across Government—on education, for example, and certainly with the Home Office—to ensure that the policies it brings forward are not to the detriment of our farming communities.
Question put and agreed to.
Resolved,
That this House has considered recruitment support for the agriculture sector.