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Jerome Mayhew (Broadland) (Con)
The Secretary of State for Wales (Sir Robert Buckland)
I am honoured to take my first questions as Secretary of State. I ask the House to remember that Friday will mark the 56th anniversary of the Aberfan disaster, which, even with the passage of time, remains searingly painful. We will never forget, and we will still mourn, all those who lost their lives.
My Department has worked alongside the Department for Levelling Up, Housing and Communities to ensure that the freeport offer works for Wales. Over the summer, we successfully agreed a prospectus for Wales with the Welsh Government, which was launched in early September. This takes us one step closer to investment, growth and long-term prosperity.
Jerome Mayhew
May I be the first to welcome my right hon. and learned Friend to his place and to align myself with his comments about the Aberfan disaster? I remember being taught about it in school as a child of roughly the same age: it made a deep, profound and lasting impression on me.
By making it easier and cheaper to do business, freeports drive not only local and regional growth, but national growth—growing the pie, as we have learned to call it. Will my right hon. and learned Friend give further details on how freeports in Wales can help to level up local areas and help their prosperity?
Sir Robert Buckland
We are committed to establishing at least one freeport in Wales by the summer of next year, with £26 million in seed funding. The bidding process is still open; I am sure that we will see some excellent bids. The estimates for the Teesside freeport and Freeport East initiatives are that they will both create more than 18,000 jobs and provide a £3.2 billion boost to their local economy. I anticipate a similar boost to the Welsh economy.
Geraint Davies (Swansea West) (Lab/Co-op)
I have just returned from the World Trade Organisation in Geneva as a rapporteur for the Council of Europe. There is some concern there about how freeports might undermine internationally agreed labour standards and might be a safe haven for carbon-intensive production. What meetings has the Secretary of State had with the WTO about the matter? Will he meet me about it? Can he give an assurance that there will be no reduction in labour standards and no dirty production in these freeports?
Sir Robert Buckland
I am always happy to meet the hon. Gentleman, with whom I have enjoyed lively exchanges over the years. I assure him that in the prospectus he will see a specific reference to the Senedd’s Well-being of Future Generations (Wales) Act 2015. Along with giving assurances as to our UK Government’s standards, I can assure him that the sort of concerns that have been outlined are unfounded and that he will find encouragement in the green initiatives that I am sure will thrive with the freeports project.
Jo Stevens (Cardiff Central) (Lab)
May I say on behalf of the Labour party, and particularly my hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones), that we are all thinking of the community of Aberfan this week?
I welcome the Secretary of State to his new role. He must be very pleased, following his summer U-turn, that the Prime Minister has been taking daily lessons from him. The Welsh Government’s Minister for Finance and Local Government, Rebecca Evans, is now dealing with her sixth Chief Secretary to the Treasury. Can the Secretary of State explain how it is possible to progress the Welsh freeports prospectus with such an appallingly chaotic and unstable UK Government ahead of the 31 October Budget announcement?
Sir Robert Buckland
I assure the hon. Lady that the time that I have had as Secretary of State has been time well spent. Throughout the summer, I made sure that the prospectus process for the freeports initiative was maintained. I worked with the then Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), to make that so.
I assure the hon. Lady that we have not lost a beat in my time in office. The fact that there may be changes in personnel does not change the Government’s growth strategy, which remains on course and which I think deserves the support of hon. Members on both sides of the House.
Jo Stevens
The Budget has been ripped up and the manifesto has been ripped up, but there we go. The UK Government’s original approach was to ignore devolution and impose a freeport on Wales; the Welsh Government put a stop to that and to the harm to the environment, to workers’ rights and to Wales’s finances that it would have caused. The UK Government’s latest version of freeports appears to be investment zones. Has the Secretary of State actually seen any evidence that proves his Government’s claim that they create growth, rather than just displace it?
Sir Robert Buckland
I find it concerning that the hon. Lady does not share my enthusiasm for freeports and investment zones. I think of examples from the past in Wales, when inspirational Secretaries of State such as the late Lord Crickhowell, Peter Walker and Lord Hunt of Wirral demonstrated that, through enterprise zones and, for example, the Cardiff Bay Development Corporation, the economy could be transformed and regenerated. I am confident that our approach to investment zones will ensure that Wales shares in the growing prosperity that we want to see throughout our United Kingdom. I believe it will generate more investment and grow that economic pie, which is the aspiration of this Government.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
This Government have been forced to U-turn on their fundamental ideology that slashing taxes magically leads to economic growth. That same ideology underpins freeports and investment zones. Both will shrink the UK Government’s tax revenue and, in turn, the Welsh Government's budget, which is already facing a £4 billion shortfall. With inflation now over 10%, what is the Secretary of State doing in the Cabinet to protect Wales’s budget?
Sir Robert Buckland
I yield to none in my admiration for the right hon. Lady, but she has just laid bare Plaid Cymru’s ideological approach. Her party believes that there should be an ever-shrinking share of wealth, which means that our public services would decline. We on this side of the House believe that the way in which to pay for public services is to grow our economy, and it is through initiatives such as the freeports and investment zones that we will do just that. I hope that the Welsh public will note Plaid Cymru’s ideological opposition to growth.
Liz Saville Roberts
The Secretary of State is on record as saying that he believes it is right to make cuts in public spending—and that was before last week's multiple U-turns. According to the Glasgow Centre for Population Health, the last Tory austerity experiment led to 335,000 excess deaths. How many excess deaths is the Secretary of State prepared to justify this time round?
Sir Robert Buckland
I am sorry, but hyperbole from the right hon. Lady does not help her case at all. We are not talking about so-called austerity; we are talking about ensuring that the money allocated in the public spending round that was agreed last year is spent efficiently and wisely. I said that it was right for each Department to look carefully at its priorities to ensure that frontline services—the sort of services in which I know she and I believe—are maintained for the benefit of the citizens whom we serve.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
David Linden (Glasgow East) (SNP)
Patricia Gibson (North Ayrshire and Arran) (SNP)
Martyn Day (Linlithgow and East Falkirk) (SNP)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
We have taken action to support households and businesses across Great Britain, including Wales, through schemes such as the energy bill relief scheme and the £400 energy bill rebate. The Welsh Government have been very well funded to deliver their devolved responsibilities, with the largest ever block grant of £18 billion in the 2021 spending review.
Stuart C. McDonald
The Secretary of State’s U-turn during the Tory leadership election was indeed truly eye-catching, but the U-turn about which people in Wales are most concerned at the moment is the Government’s U-turn on properly protecting benefits and pensions against skyrocketing inflation. Will the Minister be U-turning on that commitment as well, or will he fight the good fight in favour of proper uprating?
David T. C. Davies
This Government will always be committed to supporting the least well off, which is why we have come forward with schemes such as the £650 payment for those on benefits, the £300 for pensioner households and the £150 for those who are disabled. If the hon. Gentleman is really worried about the cost of living, perhaps it is time he persuaded his Government to start supporting new nuclear and the new oil and gas fields that we so desperately need for the energy that people want.
David Linden
I have just come from chairing the all-party parliamentary group on poverty, which has heard that the cost of living crisis will exacerbate the digital divides experienced by so many people in poorer communities. Will the Minister agree to meet the APPG to discuss how that affects people in Carmarthenshire, in Carmyle, and throughout these islands?
David T. C. Davies
I meet stakeholders who are dealing with poverty all the time, but if the hon. Gentleman is interested in dealing with poverty, perhaps he will be able to find out from his own Scottish National party Government why poverty levels in Scotland are rising, and why even the Labour party in Wales is making a better job of dealing with child poverty than his Government.
Patricia Gibson
The Secretary of State loves to tell a good story, does he not? The UK Government have already slashed devolved budgets by billions this financial year, and on Monday the Chancellor announced that plans for the millions of pounds that were meant to go to devolved nations for cost of living support were now to be abandoned. How does the Secretary of State think that slashing devolved budgets supports the supposed levelling-up agenda?
David T. C. Davies
The hon. Lady gave me a bit of a promotion there; I am the Minister, not the Secretary of State. I am not telling stories. The figures about child poverty in Scotland come from Audit Scotland, which is responsible to the Scottish Government. I suggest that she takes a look at the other figures, which show that far from cutting Wales’s devolved budget the UK Government have increased it every single year, and did so by £2 billion in the last financial year.
Martyn Day
Hundreds of thousands will find themselves in fuel poverty should average energy costs rise next April to the estimated £4,347 a year, as a result of the Government rowing back on their own proposals. How can the Minister claim that his party is fighting the cost of living crisis, when his Government are cutting back on the few measures that they have announced before they are even implemented?
David T. C. Davies
I am afraid that I did not hear all of the question, but I believe the hon. Gentleman mentioned fuel poverty. I remind him again that the Government are doing everything possible to ensure that people in this country can access the cheap gas, cheap electricity and cheap petrol that they need. It is members of his Government in Scotland who are doing their best to prevent that from happening.
Stephen Crabb (Preseli Pembrokeshire) (Con)
In welcoming the contributions from our friends from the Scottish National party to Wales questions, may I politely remind them that in March 2020 the Government stepped in to save thousands of businesses in every single one of our constituencies, protecting hundreds of thousands of jobs? Does that not demonstrate the value of staying part of a strong United Kingdom, and that the Government do not walk away from serious challenges but meet them head on?
David T. C. Davies
My right hon. Friend makes an excellent point. I could not put it better myself. The Government will stand up for the Union, and for the least well-off in society.
Virginia Crosbie (Ynys Môn) (Con)
Nearly 60% of my constituents on Ynys Môn rely on off-grid energy for heating. The average cost of filling an oil tank has almost doubled in the last year. On behalf of my constituents, will the Minister look at more targeted support for those on off-grid heating and liquefied petroleum gas?
David T. C. Davies
My hon. Friend makes a very important point. The Government have already come through with a £100 payment for those who are off-grid, but I believe that there are genuine issues there, and she makes a very good point. I am sure that our colleagues in the Department for Business, Energy and Industrial Strategy and the Treasury will look carefully at what she has said.
Alun Cairns (Vale of Glamorgan) (Con)
The Minister referred to the significant increases in the Welsh block grant over the past 10 years, which equate to £120 for every £100 spent in England. In spite of that very fair settlement, accepted and recognised by the Welsh Government, health waiting lists are longer, education standards are falling compared with the rest of the United Kingdom, and the economy is growing at a much slower pace. Does he agree that the Welsh Government need to focus on the right priorities: investing in public services and getting value for money?
David T. C. Davies
My right hon. Friend was responsible for ensuring that the Welsh Government got a more generous package than they had previously—£1.20 for every £1 spent in England. It is therefore very hard to understand why, under a Welsh Labour Government, health service waiting lists and ambulance response times have got longer. People have lower standards of healthcare in Wales than they do under a Conservative-run NHS in England, and Welsh Labour needs to take responsibility for that.
Sarah Green (Chesham and Amersham) (LD)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
The Secretary of State and I regularly engage with Cabinet Ministers on a range of transport measures. Over £340 million has already been provided for rail enhancements in Wales, including at Cardiff Central station and for the electrification of the Severn tunnel.
Sarah Green
Will the Minister explain why Wales is not receiving the £5 billion of consequential funding from HS2 that it is entitled to under the Barnett formula, and will he review that decision, as the Welsh Conservative party is also calling for?
David T. C. Davies
HS2 is of course a UK-wide project, which is partly being brought forward in order to enable the maximum number of people to get out of their cars and on to the trains, to use public transport, which I hope the Liberal Democrats would fully support. At the same time, the UK Government have been spending money to improve not only the rail service in Wales but rail services for travellers who go from Wales into England, such as through the Severn tunnel electrification. The UK Government have an extremely good record on supporting railways in Wales.
Mr David Jones (Clwyd West) (Con)
Avanti trains sometimes trundle along the rail infrastructure of north Wales, but these days it is an increasingly infrequent occurrence. Avanti has provided a shockingly poor service to the people of north Wales, and many of my constituents were deeply unhappy when the Department for Transport decided to extend its franchise for a further six months to give it a further chance. Will my hon. Friend please urge his counterpart in the Department for Transport to make sure this is Avanti’s last chance?
David T. C. Davies
A number of colleagues from north Wales have discussed Avanti’s performance in colourful terms, and I am sure Avanti will have listened to what my right hon. Friend has had to say, as will the Department for Transport, which I can confirm will be assessing Avanti’s performance before any further contracts are given out.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
It seems that rewarding failure is this Government’s guiding principle, and even Conservative Members agree. Avanti West Coast is the worst performing operator on the rail network, but Ministers spent an eye-watering £4 million of taxpayers’ money on bonuses to company executives for
“customer experience and acting as a good operator.”
Does the Minister agree that this is simply not good enough for the businesses and people of north Wales?
David T. C. Davies
I have already said that I accept many concerns have been raised about Avanti’s performance, but it all goes to show why it is important to modernise the rail network across the whole of Wales. That is exactly what the UK Government are doing at the moment.
Chris Elmore (Ogmore) (Lab)
The Secretary of State for Wales (Sir Robert Buckland)
I have regular discussions with Cabinet colleagues on a range of topics. Of course, interest rates are rightly a matter for the independent Bank of England. We have announced unprecedented support for households and businesses. Through our cut to stamp duty, the Welsh Government are expected to receive £70 million, enabling them to follow suit with cuts to land transaction tax in Wales.
Chris Elmore
At the weekend, I met a young couple in their early 30s who are coming off a five-year fixed mortgage rate. Their mortgage is going up by more than £300 a month, and they squarely blame the Government and the Prime Minister’s poor mismanagement of our economy. It is the Conservative Government’s U-turn that caused economic chaos, it is the Conservative Government who caused mortgage rates to go through the roof and it is the Conservative Government who are causing mortgage firms to withdraw all their support. Will the Secretary of State now apologise to my constituents and people across the land who are being crippled by huge mortgage increases every single month due to this Conservative failure?
Sir Robert Buckland
It is a Conservative Government who, through Help to Buy, have helped more than 361,000 first-time buyers on to the housing ladder. It is a Conservative Government who led to unemployment at record lows. It is a Conservative Government who have increased the national living wage to £9.50 an hour. And it is a Conservative Government who will lead to interest rates being controlled, which will help mortgage holders, too. The hon. Gentleman’s hyperbole does not serve him well.
Dame Nia Griffith (Llanelli) (Lab)
The Secretary of State for Wales (Sir Robert Buckland)
Most recent data demonstrates that households in Wales pay a price broadly on par with the average across Great Britain for variable unit costs and standing charges for gas and electricity. Our energy price guarantee will save households hundreds of pounds this winter compared with current wholesale cost projections.
Dame Nia Griffith
My constituent Mr Evans in the town of Kidwelly cannot benefit from a lower tariff for the electricity he uses in off-peak times because, as the engineers have explained to him, the smart meter he needs will not function owing to the almost non-existent mobile phone signal in the area, which is due to the UK Government’s failure to roll out mobile phone technology, while allowing smart meters that work only on mobile phone signals. Will the Secretary of State now have urgent talks with ministerial colleagues to put it right and end this discrimination?
Sir Robert Buckland
I will be interested to take up that case in more detail with the hon. Lady. However, the Government, in acting radically on energy price intervention and with our Energy Prices Bill, which seeks to break the link between electricity and gas prices, are taking the sort of action that is absolutely necessary to help households such as her constituent. Of course, I will be happy to talk further about the particular disadvantage that her constituent faces.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
I have frequent discussions with ministerial colleagues on a range of matters, including the cost of living. As I have previously said today, we are supporting households and businesses across Wales with the cost of living challenges, including on energy costs.
Jonathan Edwards
People in Carmarthenshire who are off the gas grid have seen huge increases in heating costs—for oil, LPG and solid fuels. The alternative fuel payment of £100 does not seem to be equivalent to the cap for gas. Will the Minister write to Welsh MPs outlining the methodology used by the British Government to calculate the AFP rate?
David T. C. Davies
I am sure that my Treasury colleagues will be able to help with that, but there is one thing that the hon. Gentleman could do as well if he wants to support people on the cost of living challenges in Wales: persuade his Plaid Cymru colleagues to vote against Welsh Labour’s proposals to revalue council tax bands in Wales, which are going to be catastrophic for the finances of hundreds of thousands of people across Wales.
Wayne David (Caerphilly) (Lab)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
The four Welsh police forces are adequately funded and will receive combined funding of up to £826.7 million in 2022-23, an increase of up to £45.1 million on the previous financial year. Gwent’s funding will be up to £159.1 million, an increase of £9.1 million on the previous financial year.
Wayne David
South Wales police’s area contains Cardiff, the capital city of Wales, yet it gets no extra resources for the extra responsibilities that comes with that. Will the Secretary of State make representations to his Government colleagues to address this anomaly?
David T. C. Davies
South Wales police’s funding will be up to £352.5 in 2022-23, an increase of £19 million on the previous financial year. If the hon. Gentleman wants to do something to support police forces in Wales, may I suggest that he talks to the Welsh Labour Government about their failure to hand over the apprenticeship levy, which is being held back by them and should be passed on to police forces so that—[Interruption.]
Mr Speaker
Order. When somebody is answering the question, will Members please wait until it has been completed? Mr Davies was answering Mr David’s question. I call Selaine Saxby.
Selaine Saxby (North Devon) (Con)
The Secretary of State for Wales (Sir Robert Buckland)
Floating offshore wind projects in the Celtic sea will contribute to our net zero ambitions and our energy security, and will generate economic growth and create highly skilled jobs in our coastal communities. I regularly meet the Crown Estate to discuss progress on bringing forward the ambition of 4 GW of projects by 2035.
Selaine Saxby
In order to realise the full potential of the Celtic sea, we need a timely consenting process from the Welsh Government. What discussions has my right hon. and learned Friend had with his Welsh counterparts on the consenting process for the development of floating offshore wind sites?
Sir Robert Buckland
I congratulate my hon. Friend on her consistent advocacy for projects in the Celtic sea as chair of the all-party parliamentary group on the Celtic sea. The necessity for securing timely consents is an imperative, and I will continue to work with the Welsh Government and all stakeholders to ensure that the huge opportunities that this presents are capitalised upon.
Dr James Davies (Vale of Clwyd) (Con)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
The Wales Office has been fully supporting the north Wales growth deal as it begins to deliver projects on the ground, and my officials will work closely with all partners in north Wales to ensure that the deal continues to deliver growth and investment across the region.
Dr James Davies
I thank my hon. Friend for that answer. Perhaps inevitably, not all projects initially identified for delivery through the north Wales growth deal can be progressed, and that applies to the Bodelwyddan key strategic site. Will he encourage a flexible approach to diverting the £10 million of funds that had been earmarked to Bodelwyddan to other economic development projects within Denbighshire?
David T. C. Davies
Obviously, it is for Ambition North Wales to bring forward projects for the UK Government and the Welsh Government to approve, but we have taken a very flexible view of the whole thing. I assure my hon. Friend that despite the international financial problems, which all countries are facing at the moment, this Government remain absolutely committed to support jobs, driving growth and levelling up across the whole of the United Kingdom, including in his constituency.
Bob Blackman (Harrow East) (Con)
Sir Robert Buckland
Investment zones will be created right across the UK, and our intention in Wales is to design and deliver the policy by working with the Welsh Government and local agencies to increase growth.
Bob Blackman
I thank my right hon. and learned Friend for that answer. Is it not incumbent on the Welsh Government to co-operate fully with the UK Government in order to ensure success for all the people of Wales?
Sir Robert Buckland
My hon. Friend puts it extremely well. We have a good example with freeports. I very much hope that the Welsh Government step up to the plate on investment zones.
Mr Speaker
Before we come to Prime Minister’s questions, I would like to point out that a British Sign Language interpretation of proceedings is available to watch on parliamentlive.tv.
Justin Madders (Ellesmere Port and Neston) (Lab)
The Prime Minister (Elizabeth Truss)
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Justin Madders
When the penny dropped for the Prime Minister on Monday and she realised that her Budget was responsible for crashing the economy, she should have come to this House to explain herself and to apologise to the millions of people who will now be paying hundreds of pounds extra a month on their mortgages because of her mistakes. Now that she is here, can she tell us, given the absolute chaos that her Government have created, why the previous Chancellor lost his job but she kept hers?
The Prime Minister
I have been very clear that I am sorry and that I have made mistakes, but the right thing to do in those circumstances is to make changes, which I have made, and to get on with the job and deliver for the British people. We have delivered the energy price guarantee, we have helped people this winter, and I will continue to do that.
Mr Laurence Robertson (Tewkesbury) (Con)
The Prime Minister
My hon. Friend is absolutely right; we will abolish the top-down housing targets. We want decisions about homes and infrastructure to be driven by local people, not by Whitehall, and that is why we are setting up new, locally driven investment zones.
Keir Starmer (Holborn and St Pancras) (Lab)
A book is being written about the Prime Minister’s time in office. Apparently, it is going to be out by Christmas. Is that the release date or the title?
The Prime Minister
I have been in office for just under two months, and I have delivered the energy price guarantee, making sure that people are not paying £6,000 bills this winter; I have reversed the national insurance increase; and I have also taken steps—and we will be taking steps—to crack down on the militant unions. I think that is more of a record of action than the right hon. and learned Gentleman in his two and a half years in the job.
Keir Starmer
Last week, the Prime Minister ignored every question put to her. Instead, she repeatedly criticised Labour’s plan for a six-month freeze on energy bills. This week, the Chancellor made it her policy. How can she be held to account when she is not in charge?
The Prime Minister
Our policy is to protect the most vulnerable for two years. I had to take the decision, because of the economic situation, to adjust our policies. I am somebody who is prepared to front up. I am prepared to take the tough decisions, unlike the right hon. and learned Gentleman, who has not done anything on businesses and who has done nothing to say he will protect people after one year. He has got no plan.
Keir Starmer
Last week, the Prime Minister stood there and promised absolutely no spending reductions. Conservative Members all cheered. This week, the Chancellor announced a new wave of cuts. What is the point of a Prime Minister whose promises do not even last a week?
The Prime Minister
I can assure the right hon. and learned Gentleman that spending will go up next year and it will go up the year after, but of course we need to get value for taxpayers’ money. The Labour party has pledged hundreds of billions in spending pledges, none of which it has retracted. He needs to reflect the economic reality in his policies.
Keir Starmer
Those spending cuts are on the table for one reason and one reason only: because the Conservatives crashed the economy. Working people will have to pay £500 more a month on their mortgages, and what is the Prime Minister’s response? It is to say that she is sorry. What does she think people will think and say: “That’s all right; I don’t mind financial ruin, and at least she apologised”?
The Prime Minister
I do think that there has to be some reflection of economic reality from the Labour party. The fact is that interest rates are rising across the world and the economic conditions have worsened. We are being honest and levelling with the public, unlike the right hon. and learned Gentleman, who simply will not do that. What is he doing about the fact that train workers are again going on strike? The fact is that he refuses to condemn the workers. We are bringing forward policies that will make sure our railways are protected and that people going to work are protected. He backs the strikers; we back the strivers.
Keir Starmer
The Prime Minister is asking me questions because we are a Government in waiting and they are an Opposition in waiting. There is no getting away from this. Millions of people are facing horrendous mortgage repayments and she has admitted that it is her fault. She should not have conducted an economic experiment on the British public. But it is not just her; Tory MPs put her there. They are keeping her there. Why on earth would anyone trust the Tories with the economy ever again?
The Prime Minister
I notice that the right hon. and learned Gentleman is not actually objecting to a single economic policy that the Chancellor announced on Monday. He is refusing to condemn the strikers. We are on the side of working people. We will legislate to make sure that we keep our railways open. The right hon. and learned Gentleman refuses to do anything.
Keir Starmer
The only mandate that the Prime Minister has ever had is from Government Members. It was a mandate built on fantasy economics and it ended in disaster. The country has nothing to show for it except for the destruction of the economy and the implosion of the Tory party. I have the list here: 45p tax cut—gone; corporation tax cut—gone; 20p tax cut—gone; two-year energy freeze—gone; tax-free shopping—gone; economic credibility—gone. Her supposed best friend, the former Chancellor, has gone as well. They are all gone. So why is she still here?
The Prime Minister
I am a fighter and not a quitter. I have acted in the national interest to make sure that we have economic stability—
Mr Speaker
Order. I am going to hear the Prime Minister. I suggest that all Members need to hear the answer.
The Prime Minister
I am a fighter, not a quitter. We have delivered on the energy price guarantee—[Interruption.] We have! We have delivered on national insurance. We are going to deliver to stop the militant trade unions disrupting our railways. The right hon. and learned Gentleman has no idea. He has no plan and he has no alternative.
Mr Speaker
I call James Grundy. [Hon. Members: “Hear, hear!”] Order. I must say he is obviously a most popular choice. Come on, James Grundy—you have a future.
James Grundy (Leigh) (Con)
The Prime Minister
I join my hon. Friend in congratulating Leigh Centurions on their return to the super league. I had the huge privilege of meeting the Lionesses last week—a fantastic team who won a major tournament for us—and we will host a Downing Street reception as soon as their training programme makes them available.
Mr Speaker
I look forward to a rugby league invite as well.
Let us now come to the leader of the SNP, Ian Blackford.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
After 10 U-turns in two weeks, we are left with a Prime Minister in office but not in power, and families are paying through the teeth for her mistakes. Her latest broken promise has put pensioners in the frontline of Tory cuts. Can she perhaps turn to her Chancellor right now, get permission to make another U-turn and commit to raising the state pension at the rate of inflation?
The Prime Minister
I honestly do not know what the right hon. Gentleman is talking about. We have been clear in our manifesto that we will maintain the triple lock. I am completely committed to it and so is the Chancellor.
Ian Blackford
It is not surprising that the Prime Minister’s approval ratings are collapsing with an answer like that. She has the worst polling result for any Prime Minister in history. She has just thrown 12 million pensioners under the Tory bus, and it is not just pensioners feeling the pain. In the last week alone—[Interruption.]
Ian Blackford
It is not just pensioners feeling the pain. In the last week alone, inflation has risen to a 40-year high, mortgage rates are at the highest level since the financial crash and people’s energy bills are about to rise to more than £5,000. Can the Prime Minister answer one simple question: why does she expect everyone else to pay the price for her failure?
The Prime Minister
I do not think the right hon. Gentleman can take yes for an answer. I have been clear that we are protecting the triple lock on pensions. If he is concerned about the economy, why does he continue to advocate for separatism, which would plunge the Scottish economy into chaos?
Gary Sambrook (Birmingham, Northfield) (Con)
The Prime Minister
My hon. Friend is absolutely right. When we build new houses, we need to make sure there are GP surgeries, schools and infrastructure. That is why we are introducing a new infrastructure levy to make sure that more of the money from developers goes on supporting local communities.
Ed Davey (Kingston and Surbiton) (LD)
Millions of family carers have been forced to cut back on food and heating. One told Carers UK:
“My son is incontinent… if we don’t wash him in warm water several times a day this will cause him to physically decline. So how do we pay for the gas to heat the water if we are currently at max budget?”
Vulnerable people and carers are struggling enough already in this cost of living crisis, so will the Prime Minister guarantee that support for the vulnerable, including carer’s allowance, will rise by at least today’s inflation rate of 10.1%?
The Prime Minister
People are struggling. It is difficult at the moment. That is why we put in place the energy price guarantee to make sure the typical household is not paying more than £2,500. It is why we have supplied an extra £1,200 of support to the most vulnerable. I can assure the hon. Gentleman that we will always support the most vulnerable. They will be our priority.
Fay Jones (Brecon and Radnorshire) (Con)
The Prime Minister
I join my hon. Friend in thanking everybody at Brecon barracks, which organises Exercise Cambrian Patrol each year. It is a world-class training exercise. I congratulate Brecon’s Gurkha soldiers on their fantastic achievement of a gold medal—well done!
Dr Philippa Whitford (Central Ayrshire) (SNP)
The Prime Minister
We are facing very, very difficult economic times. I took the decision I had to in the interests of economic stability. What is important is that we work together, including with the SNP, to get through this winter and grow the economy.
Mr David Jones (Clwyd West) (Con)
The Prime Minister
I am completely committed to the Northern Ireland Protocol Bill. It deals with the very specific issues we face in Northern Ireland, the free flow of trade and making sure that the people of Northern Ireland are able to benefit from being part of the United Kingdom. I can tell my right hon. Friend that any negotiations will reflect the same position that is in the protocol Bill.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Prime Minister
We do face very difficult economic times. I have been honest about the mistakes I have made, but what I do not apologise for is the fact that we have helped households through this winter with the energy price guarantee, the fact that we have reversed the national insurance rise and the fact that we are taking action to get our railways running rather than being disrupted by the militant trade unions that the hon. Lady supports.
Mr John Baron (Basildon and Billericay) (Con)
The Prime Minister
We are compassionate Conservatives. We will always work to protect the most vulnerable, and that is what we did with the energy price guarantee. We are going to make sure that the most vulnerable are protected into year two, and I am sure that the Chancellor has heard my hon. Friend’s representations on the contents of the medium-term fiscal plan.
Stewart Malcolm McDonald (Glasgow South) (SNP)
The Prime Minister
One of my first acts in office was to make sure that the military support we give to Ukraine equals the military support we gave this year. We must make sure that Ukraine wins. It can win, it will win, and it must win.
Mark Menzies (Fylde) (Con)
The Prime Minister
I agree very strongly with my hon. Friend. I know he cares deeply about this issue. I assure him that we will consult on a robust system of local consent and give clear advice on seismic limits and safety before any fracking takes place. The consultation will consider all the relevant people—the regional Mayors, the local authorities and parishes—and the concerns of those who are directly affected. My right hon. Friend the Business Secretary will say more about this later today.
Kate Osborne (Jarrow) (Lab)
The Prime Minister
What we need is an efficient postal service that delivers for people across this country. That is what I am focused on, not making ideological points.
Duncan Baker (North Norfolk) (Con)
The Prime Minister
I thank Julia and her team for the fantastic job that they are doing, and my hon. Friend as the local Member of Parliament. Apprenticeships are a fantastic way for people to learn and gain experience, and I am proud that we have created 5.1 million apprenticeships since 2010.
Nick Smith (Blaenau Gwent) (Lab)
The Prime Minister’s chief of staff is in hot water after lobbying on behalf of a Libyan warlord and big tobacco. It turns out that he has also lobbied for personal protective equipment giants Sante Global. Is it wise to have a lobbyist at the centre of Government?
The Prime Minister
All appointments in Downing Street are properly checked through the propriety and ethics process. That is the way that we do it in a completely impartial way.
Mr Andrew Mitchell (Sutton Coldfield) (Con)
The Prime Minister
I pay tribute to my right hon. Friend for the fantastic work that he did as International Development Secretary. I am proud that we have rebalanced our international development budget to focus more on humanitarian aid and more on women and girls. No doubt more details will be set out in due course.
Sarah Owen (Luton North) (Lab)
The last Tory Prime Minister was forced out after a series of dodgy dealings and failing to take responsibility for any of it, so what is this Prime Minister getting the boot for—her plan that crashed the economy or forcing fracking on communities that do not want it? Will she do the decent thing and go, and call a general election?
The Prime Minister
I have taken responsibility and I have made the right decision in the interest of the country’s economic stability.
Steve Brine (Winchester) (Con)
Every single Member of this House will have constituents waiting for treatment in the covid backlog. The Health and Social Care Secretary’s priorities are absolutely right, including her B—tackling the backlog. Can the Prime Minister reassure me that the Government are committed to the series of elective hubs that we have promised, including at the Royal Hampshire County Hospital in my Winchester constituency?
The Prime Minister
My right hon. Friend the Health and Social Care Secretary has set out her plans to deliver on dealing with the covid backlog. She will continue to work on that and make sure that we deal with what was a massive pandemic that created a backlog. We will deal with it.
Barry Gardiner (Brent North) (Lab)
Since the mini-Budget, thousands of my constituents have been in mental anguish and despair. I recognise that the Prime Minister has faced a week of mental anguish and despair herself. People have been angry with her and people have mocked her. Having had that experience, what will she now do to improve the mental healthcare for people in this country, so that the anguish that they face in the coming months is properly responded to and dealt with?
The Prime Minister
My right hon. Friend the Health and Social Care Secretary has set out a clear plan of how we are going to deal with the backlog created by covid, how we are going to make sure that people get timely GP appointments, and how we are going to improve the services in our hospitals, including mental health services.
Helen Whately (Faversham and Mid Kent) (Con)
The Government are facing tough choices, but people living with dementia face unlimited care costs, and that is not a choice. Can my right hon. Friend assure me that she is committed to social care reform to end that worry and relieve pressure on the NHS?
The Prime Minister
Yes, we are committed to social care reform. We need to deal with those issues.
Stella Creasy (Walthamstow) (Lab/Co-op)
It is always better to see a Prime Minister at her desk rather than underneath it. Now that she is here, can she tell us why, next week, this House will discuss legislation that will abolish vital protections on pension payouts, our right to watch the Olympics free of charge and airline consumer laws? How is any of the Retained EU Law (Revocation and Reform) Bill in the British interest?
The Prime Minister
I think we have yet another example of somebody who does not want to support the British public’s decision to leave the European Union in 2016. Is it not quite incredible that, six years after people voted to leave the European Union, there are people who object to taking EU law off our statute books? Now, I am a democrat. I respect what British people voted for. I suggest the hon. Lady does the same.
Richard Graham (Gloucester) (Con)
Thirty years ago, the Westminster Foundation for Democracy was created out of the war in Bosnia so that democracy could flourish, and freedom and prosperity come with it. This evening, in your rooms, Mr Speaker, we celebrate that anniversary by hearing directly from our country representative in Ukraine, the chair of the Taiwanese foreign affairs committee and the leader of the opposition in Uganda—a good example of the range of contacts that this great cross-party body, funded by Government, is working with. Does the Prime Minister agree that this is a vital contribution by our Government and our people to democracy around the world, and will she encourage Members around the House to join us this evening?
The Prime Minister
The Westminster Foundation for Democracy does a fantastic job, and I think we know from what has happened in Ukraine—the appalling war perpetrated by Vladimir Putin—just how precious democracy is and how much we need to do to work with our friends and allies to protect democracy around the world. I do encourage colleagues from all sides of the House to attend the event tonight.
Mr Speaker
That now completes Prime Minister’s questions, and I will let the House clear.
Points of Order
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
On a point of order, Mr Speaker. I am grateful for catching your eye on this, and I seek your guidance. Yesterday, the Minister for the Americas and the Overseas Territories was, in a way, dragged to the House to answer a question about what the Government would do over the brutal attacks that took place inside a consulate in Manchester, in which Chinese representatives were assaulting an individual, and also tearing things down and creating vandalism outside.
The Minister said that the officials would be called to the Foreign Office to meet a Minister of the Crown, instead of which we discover today that they met an official, who simply rapped them over the knuckles by saying they should stand by the freedoms we have in this country. Can I therefore ask whether it is feasible for us to get the Minister back to the Dispatch Box to ask why they were not told that, if they do not follow our rules, they will get expelled, and to say that all those responsible for the assault in Manchester will be expelled from this country?
Mr Speaker
Obviously, it is not a direct matter for me, but what I would say, and I think there are many avenues that could be pursued, is that an urgent question could possibly and likely be submitted. I am not saying it would be accepted, but it could be looked on favourably, because I think we were all appalled by those images and, quite rightly, action needs to be taken.
Rachael Maskell (York Central) (Lab/Co-op)
On a point of order, Mr Speaker. This morning, the Transport Committee heard from the Transport Secretary that the Government will axe their commitment to create Great British Railways in this parliamentary Session. There has been no written statement to announce the decision, and I am not aware that an application has been made to you for an oral statement by the Secretary of State. We were expecting a transport Bill in this Session to facilitate the transition of the operations of rail to Great British Railways and to create a controlling mind for the railways out of the chaos that has existed since the Conservative Government fragmented and privatised rail in 1993. As part of the process, the former Transport Secretary launched a competition with huge fanfare for a future headquarters of the railway. Some 42 locations applied, and six were shortlisted and have expended huge amounts to win this—
Mr Speaker
Order. A point of order is meant to be a point of order, not a full statement about Government policy and everything. I am sure you will come to the end quickly.
Rachael Maskell
Thank you for your guidance, Mr Speaker. Thousands of jobs could be at stake as a result of this matter, so could you please advise me on how I can take it forward, since the Secretary of State seems to have failed either to issue a written statement or to bring forward an oral statement to the House?
Mr Speaker
I am grateful to the hon. Member for giving me notice of her point of order. She has put her point on the record, and I recognise that it is a very important issue, including for other Members. If there is an important policy development on this issue, I would expect it to be announced to this House first. I am sure that those on the Government Benches will have heard this exchange, and that the hon. Member will pursue the matter through the different avenues available to her.
Mr Gregory Campbell (East Londonderry) (DUP)
On a point of order, On a point of order, Mr Speaker. On a procedural matter, yesterday morning I was successful in securing a debate in Westminster Hall on the motion
“That this House has considered British passport ownership by Northern Ireland residents.”
I have taken this matter up over many years and it remains unresolved. On every other occasion that I have taken the matter up, Home Office Ministers responded, and I had hoped that the words “British passport ownership” might have given the Home Office a clue, and ensured that a Home Office Minister replied to the debate. While I was glad to have a reply from a Northern Ireland Office Minister, can you ensure, Mr Speaker, that the appropriate ministerial Department responds to such debates in future?
Mr Speaker
I am grateful to the hon. Member for giving notice of his point of order. The decision about which Minister should respond to a debate is unfortunately a matter for the Government rather than the Chair. I am sure, however, that those on the Government Benches will have heard those comments and will bear them in mind. I know the hon. Member will also pursue the matter through different avenues.
Tim Farron (Westmorland and Lonsdale) (LD)
On a point of order, Mr Speaker. You may be aware, Sir, that today the Government Deputy Chief Whip, the hon. Member for Calder Valley (Craig Whittaker), has written to Conservative Members telling them with regard to the debate this afternoon on fracking that:
“This is not a motion on fracking. This is a confidence motion in the Government.”
Will you give guidance to all sides of the House, and to the Prime Minister in particular, about what would happen in the event that the Government were to lose that vote this afternoon? If the Government have lost the confidence of the House, surely—and I would be grateful for your guidance, Mr Speaker—that would mean that the Prime Minister must then go to the palace, see His Majesty the King, and ask for a dissolution of Parliament and a general election. Am I right? Will you give clarity on that?
Mr Speaker
First, I am not going to enter into a debate on internal communications. I have no doubt that the hon. Gentleman will have had some communications of his own. That happens within in all parties, and if it doesn’t, I would be shocked. Let us not pre-judge the decision that may take place later. You asked the question because you knew the answer.
Dr Philippa Whitford (Central Ayrshire) (SNP)
On a point of order, Mr Speaker. In response to some of the questions today, the Prime Minister claimed that no household would pay more than £2,500 a year. That £2,500 is an average, and therefore almost half of households will pay more. How do we go about getting the Prime Minister to correct that on the record? She said that no one would pay more, and that is incorrect.
Mr Speaker
I am not going to continue the debate. It is not for me to answer, but the hon. Lady has certainly put the point on the record. Let us come to—
Mr Speaker
No, we have one more important point of order. I call Angus Brendan MacNeil.
Angus Brendan MacNeil
On a point of order, Mr Speaker. Clearly, UK politics now more resembles Germany, with a Chancellor effectively in charge. So why was the right hon. Member for South West Norfolk (Elizabeth Truss) answering for the Government during Prime Minister’s questions, when in fact the right hon. Member for South West Surrey (Jeremy Hunt) is in charge?
Mr Speaker
That is not a point of order, as you well know. That was a poor effort; you are better than that normally.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. This is further to the point of order made by the former leader of the Liberal Democrats, the hon. Member for Westmorland and Lonsdale (Tim Farron). You are, of course, quite right that it is not for you to comment on internal communications among Conservative MPs. However, by tradition, when a motion is declared a motion of confidence by the Government, the Prime Minister makes that announcement at some point during the debate. Is there any means whereby the Prime Minister could do so today? That is how I understand it and, as I look across to the faces on the Conservative Benches, they all seem to think that it is a motion of confidence.
Historically, lots of different things have been made confidence motions, including the conduct of war and various Bills. Traditionally, every single time that happened and the Government lost, that led to a general election. Is that not just factually correct?
Mr Speaker
You have certainly put that on the record. I would say, once again, let us wait and see what unfolds this afternoon. We will see where we go from there.
Energy Costs (Pre-payment Meters and Social Tariffs)
Wednesday 19th October 2022
(2 years, 1 month ago)
Commons ChamberRead Full debate Energy Costs (Pre-payment Meters and Social Tariffs) Bill 2022-23 View all Energy Costs (Pre-payment Meters and Social Tariffs) Bill 2022-23 Debates Read Hansard Text Watch Debate
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Kenny MacAskill (East Lothian) (Alba)
I beg to move,
That leave be given to bring in a Bill to abolish higher standing charges for customers with pre-payment meters; to require energy companies to provide social tariffs for low income customers; and for connected purposes.
Energy costs are the social and economic issue of our time, yet the steps taken to mitigate the pain of rises are far from adequate. Fuel poverty is soaring and winter is nearing. That Scotland, which is energy rich, should find over half its people fuel poor is absurd. The pain is likewise felt south of the border, even if the climate is less severe and the natural bounty less kind. Additional action is therefore required across the country, and urgently, especially for those most desperate and most vulnerable.
The £2,500 figure is not the cap but the average cost. Past support has provided modest finance, but it has been inadequate for most to keep pace with soaring costs. As bills escalate, fear is turning to horror in the knowledge that even that support is there only until April. Beyond the Government soundbites, hardship remains, and the cost of energy will bite many severely, if not devour them. Anomalies and injustices remain, which must cease. The most appalling is the perversity of prepayment meters having higher standing charges. A social tariff for those poorest and most vulnerable, as exists in many other countries, must also be introduced. That is what lies at the heart of the Bill. It is supported by both Energy Action Scotland and National Energy Action, who know the fuel poverty faced by those whose interests they represent, as well as by Age Scotland, which advocates on behalf of older people. I am grateful for their endorsement.
Scotland, with some 500,000 prepayment meters, is disproportionally affected, but the numbers across Britain are still significant with 4 million households having higher costs imposed by PPMs. Action to address these injustices is both right and necessary as fuel and energy are not luxuries but necessities. Their implications in our modern society go far beyond heating a home. Power and energy are required for so many basic aspects of life. The inability to provide them undermines the ability to function in our society or to maintain dignity and self-respect.
Of course, a new euphemism has entered our lexicon: the phrase “self-disconnection.” It is misleading and it is insidious. It is akin to those other phrases that are meant to hide horror or injustice such as collateral damage when what is meant is the killing of innocent civilians.
What does self-disconnection mean in reality? It is not someone who simply chooses not to switch on the heating, nor does it refer to the past generational—though no doubt fast-returning—parental demands to switch off lights or turn off the shower. Instead, it is the situation in which many now find themselves where they simply cannot afford either to buy a power card or to turn on the heating or any other powered appliance. It is not voluntary. It may not be imposed through any law or enforced at the barrel of a gun, but it is forced on them through circumstances over which they have no control. That is why the Bill and the actions that it requires are necessary.
Disconnection, or more likely self-disconnection, has widespread implications that are horrific yet masked by benign euphemisms. It is not simply the horror of choosing between heating and eating this winter, although that alone is bad enough. The implications of being unable to access power go far beyond that. It is the mother who wishes to wash her children’s clothes for school, so she can keep them clean and smart. It is the youngster who needs to charge their phone to access employment opportunities they desperately seek. It is the parent who wants to power up the iPad given by the school, so that their child can improve their education and hence their life chances. It is the dialysis patient who requires to switch on the machine that they require for life itself, never mind others suffering from cancer or sick from other illnesses and who feel the cold more, yet are unable to provide, or are even denied, that modest comfort during convalescence—or even, shamefully, at end of life.
Compounding that injustice are accrued standing charges even when users have been sparing in their consumption. Many will find that their power card or savings are immediately consumed by paying debt before they get even a modicum of power. As I said, fuel and energy costs are about more than just heating or eating. They are about dignity, they are about opportunity, they are about life itself. This has not come about through some climatic disaster as has tragically afflicted Pakistan. Nor can it be blamed solely on Putin and the war in Ukraine. These are policy issues overseen by the UK Government where injustice and iniquity have been allowed to take root. Much of that can be addressed by the ending of higher standing charges for pre-payment meters, and through the implementation of a social tariff for those with the least and who are most vulnerable. After all, it is not just unjust but perverse that those with least should pay most for energy, especially when those with most are paying least in their tax burden.
I accept that some have found pre-payment meters helpful for budgeting, although the strength of that argument has been sapped, if not ended, by the arrival of smart meters. There is also the situation of private landlords who wish to ensure that they avoid costs if a tenant should depart without paying their bill. Again, smart meters offer some solution, but again the issue is not the meter itself but the tariff charged. Some 13% of smart meters are on pre-payment tariffs. Technology is meant to liberate us, not perpetuate injustice. Pre-payment meters, whether smart or otherwise, can remain. What must end are the higher standing charges and tariffs. They are simply unacceptable anytime, but most especially now.
Both Ofgem and energy suppliers testify to the technical capacity to make that change. What is required is the political will, which is why I have proposed this Bill. It has widespread support within and without Parliament. It would, of course, require a very modest tariff increase for those paying on credit, but the numbers involved, and the amount of energy consumed through PPMs, make it a very small burden upon those of us more fortunate. Likewise, a social tariff is a concept whose time has come. Ending the burden on the poorest and most vulnerable through changes to PPM tariffs must be matched by the availability of a social tariff, one where the poorest and most vulnerable can access energy and at affordable rates. It is a concept that has the support of the organisations I mentioned earlier with regard to action on pre-payment meters—Energy Action Scotland, Age Scotland and National Energy Action—and is also argued for by the Fuel Bank Foundation and Fair By Design, organisations working for those at the heart of the fuel and energy crisis who are being hit hardest.
It is not impossible, let alone unheard of—even before the current energy crisis and emergency measures being invoked, other countries provided for the poorest and most vulnerable. A federal law in Belgium
“protected residential consumers with low income or precarious situation”.
That social tariff saw almost 10% of electricity users pay 34% less and a similar number of gas users pay between 38% and 48% less. Those were the poorest and most vulnerable and certainly those facing the most acute need and difficulties. In Belgium, the social tariff covers people receiving minimum income benefits; people receiving an income replacement benefit; people with disabilities receiving integrated support; and people in receipt of an income guarantee benefit. Who would quibble with those priorities or dispute that those people have additional need for fuel and energy that requires them to be charged on a tariff that recognises that?
Belgium is not alone in operating a social tariff. Again, even before this crisis, Spain provided a social bonus scheme whereby a 25% discount was available on electricity bills for vulnerable energy customers, including disabled customers, with a 40% discount for severely disabled consumers. Other countries also take the appropriate action, even if criteria, eligibility and amount may vary. However, the urgent need remains that, in this time of crisis, the poorest and most vulnerable require the most support and should pay the lowest tariffs. That and the injustice of higher charges being imposed upon them must end.
That is why the Bill is necessary. Energy, fuel and power are fundamental—
Mr Speaker
Order. This is a ten-minute rule Bill. The hon. Member has gone beyond 10 minutes, so I hope he can sum up quickly.
Kenny MacAskill
Indeed. The fact that Scotland is energy-rich yet Scots are fuel-poor is absurd, and it is shameful that that should be replicated across the UK. Worse than that is the perversity that the poorest and most vulnerable pay the most. That must end, and this Bill will ensure that.
Question put and agreed to.
Ordered,
That Kenny MacAskill, Neale Hanvey, Richard Burgon, Angus Brendan MacNeil, Mr Alistair Carmichael, Liz Saville Roberts, Margaret Ferrier and Alison Thewliss present the Bill.
Kenny MacAskill accordingly presented the Bill
Bill read the First time; to be read a Second time on Friday 24 March 2023, and to be printed (Bill 166).
Opposition Day
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Economic Responsibility and a Plan for Growth
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:00 - The House having divided: - Ayes: 223 / Noes: 0 - Question accordingly agreed to.
Rachel Reeves (Leeds West) (Lab)
I beg to move,
That this House regrets the long-term damage to the economy as a direct result of the mini budget, where mortgage rates for households have risen and the stability of pension funds has come under threat; notes that despite substantial U-turns in policy since the mini budget, the Government’s funding position has deteriorated, the cost of borrowing is expected to be higher for many years and the UK’s fiscal credibility has been undermined, all while many energy producers continue to make record windfall profits; therefore calls on the Government to take all necessary steps to stabilise the economy and make it work for ordinary working people and business through a plan for growth that puts them at its heart; and further calls on the Government to publish the Office for Budget Responsibility forecasts immediately alongside Government estimates of windfall profits for the next two years from energy producers in the UK.
We are here because of a Tory crisis made in Downing Street but paid for by ordinary working people. The Conservative mini-Budget of 23 September will go down in history as the day that the British Government chose to sabotage their own economy. We saw the Conservatives hurl unfunded tax cuts towards the wealthiest, with excessive borrowing and yet more Government debt. The Government set our economy ablaze and, as a direct result, in the past four weeks we have experienced chaos in financial markets, repeated emergency interventions from the Bank of England, warnings from the ratings agencies and rebukes from the International Monetary Fund. Those costs are passed directly on to working people.
Justin Tomlinson (North Swindon) (Con)
I thank the hon. Member for being generous in giving way so early. Does she join me in welcoming last week’s employment statistics, with the highest rate since 1974? In my constituency alone, 920 extra people were in work compared with 12 months ago.
Rachel Reeves
The truth is that a million people are missing from the labour market and half of those have long-term health conditions. We need to do much more to get those people back to work. One reason why unemployment is low is that so many people are not even looking for work because they are waiting for NHS operations, with waiting times at an all-time high.
Today, we learn that inflation has gone above 10% again; food inflation is at more than 14%; and in the last year alone, electricity prices are up 45% and gas prices have doubled. Despite all the extraordinary and unprecedented U-turns in recent days, the damage has been done. This Conservative Government have wrecked people’s finances and snuffed out the dream of home ownership for millions. Some 1.8 million people across the UK will pay higher mortgage bills by the end of next year—on average, they will pay £580 extra every single month—because of the reckless actions of the Government. In my Yorkshire constituency, the cost will be £360 extra a month. In the constituency of the Financial Secretary to the Treasury, the hon. Member for Arundel and South Downs (Andrew Griffith)—who is about to respond to me—it will cost people £640 extra every single month in higher mortgage payments. Families cannot afford to pay those higher mortgage costs, and they certainly cannot pay them with apologies from the Prime Minister. The public will not accept that the arsonists who inflicted this damage can put out the fire. The Tories can never be trusted with our economy again.
Mr Toby Perkins (Chesterfield) (Lab)
I congratulate my hon. Friend on the motion that she has tabled. It seems utterly unarguable that the crisis being wrought upon our constituents is to be laid squarely at the feet of the Government. It would appear that the Government agree, because according to briefings on Twitter, they do not intend to vote against the motion. Does my hon. Friend agree that the fact that the Chancellor has not turned up to defend the record and that Conservative Members do not even seem to disagree with the motion means that we can all agree that this is the Government’s fault?
Rachel Reeves
I agree that it is a shame that October’s Chancellor is not in his place today. This crisis has been co-written by every single member of the Cabinet and every single member of the Government. The Minister for the Armed Forces and Veterans was crystal clear yesterday in pointing out that all Cabinet Ministers had approved and are responsible for Government decisions, including the disastrous mini-Budget. There is no credibility or stability with this Government, just a shambles. All the time, businesses are looking at the state of the Government and deciding where and whether to invest. The Tories’ recklessness and enduring incompetence will cost jobs and investment here in Britain. The Conservatives should not be put in charge of a tombola, let alone the British economy.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for what she is saying. Let me back up her comments on economic growth. We need small and medium-sized enterprises to be able to survive and to get through this period. In my constituency, a business—a Japanese restaurant—opened some two months ago. It is doing really well and it employs staff, but its bills are going up from £900 to £3,000. It is clear that unless something happens soon for businesses that are productive and create jobs, they will no longer be there. Does the hon. Lady agree that we need to have a process that helps businesses?
Rachel Reeves
I thank the hon. Gentleman for that intervention. Small businesses, such as the restaurant that he mentions in his constituency, are the backbone of all our constituencies and our economy more widely. An energy bill increase from £900 to £3,000 is not affordable for small businesses. The Government need to do more to help.
David Rutley (Macclesfield) (Con)
I know that the hon. Member takes economic issues very seriously. Protecting pensioners will obviously be a key priority. Does she join me in welcoming the Prime Minister’s confirmation that the triple lock will be protected, and can she set out Labour’s policy on that vital area?
Rachel Reeves
On Monday, the Chancellor said that he could not rule out breaking the triple lock, and on Wednesday, the Prime Minister said something else. We do not know which one speaks for the Government, but Labour is clear that we support the triple lock. It was in our manifesto and, unlike the Conservative party, in government we would stick by what we promised.
Strong and independent economic institutions are essential for making Britain a great place to invest. That is why undermining the Bank of England, sacking the respected permanent secretary at the Treasury and gagging the Office for Budget Responsibility have all added to borrowing costs for Britain—for Government and for families.
On Monday, we saw yet again the ridiculous spectacle of a Conservative Chancellor coming to the House of Commons to announce huge changes in Government economic policy without any sort of independent forecast. Failing to publish a forecast was a significant contributor to the lack of market confidence when the Government unleashed their mini-Budget three and a half weeks ago, yet no lessons have been learned.
The Government cannot build confidence in Britain by flying blind. That is why we are asking all MPs to vote today to publish immediately the current assessments and forecasts from the Office for Budget Responsibility. For the sake of our economic stability, they must not remain hidden for a further two weeks. If the Chancellor refuses, the country will rightly ask, “What have they got to hide?”
Sir Stephen Timms (East Ham) (Lab)
My hon. Friend touched on the point that one of the new Prime Minister’s very first decisions was to sack the permanent secretary to the Treasury. Can my hon. Friend shed any light on why that decision was made? Was it, as appears very likely, because he was set to warn the new Chancellor about the consequences of the policies that he wanted to announce?
Rachel Reeves
As a former Treasury Minister, my right hon. Friend knows how things are supposed to be done. We cannot ask September’s Chancellor why he sacked the respected permanent secretary, because he is no longer in his place, but a Labour Government would respect the Bank of England, respect the independent civil service and remove the gag on the Office for Budget Responsibility.
Today’s inflation numbers show the impact that higher gas and electricity bills are having on family finances. The Government’s mistake when they announced their package a month ago was putting its entire cost on Government borrowing. Under Labour’s plans, energy producers—including the oil and gas industries, which have said themselves that they have more money than they know what to do with—would have been asked to pay their fair share. Our plan did what a responsible Government should: it put forward a fully costed and fully funded package to freeze bills this autumn and winter.
The Conservatives have left tens of billions of pounds on the table and have pushed all the costs on to current and future taxpayers for years to come. Now, because of their irresponsible and reckless approach, they have gone back on their word. According to the Resolution Foundation, that could mean that a typical bill will rise to at least £4,000 from next April.
James Cartlidge (South Suffolk) (Con)
The hon. Lady is being very generous in giving way. Can she confirm that whatever her policy on windfall tax is, the overwhelming majority of her energy support package would have been paid for by borrowing?
Rachel Reeves
The point is that the Government are leaving billions of pounds of unneeded and unnecessary borrowing on the table. Why leave that money on the table when even the energy giants are saying that they have more money than they know what to do with? All that money has been put on borrowing and debt to be paid back by current taxpayers. Tens of billions of pounds have been left on the table by this Tory Government.
It has always been a question of who pays for support with bills. The Conservatives always put it on the never-never, but in the end it is working people who pay the price. In August, Bloomberg reported that the Government’s estimates of energy company windfall profits in the UK over the next two years could be £170 billion. The last Chancellor disputed that and so did the one before, but neither of them confirmed the actual figure. Why not?
Labour’s fiscal rules would protect the economy and protect families. We should not borrow a penny more than is absolutely necessary. That is why our motion
“calls on the Government to publish the Office for Budget Responsibility forecasts immediately alongside Government estimates of windfall profits for the next two years from energy producers in the UK.”
Doing so is in the public interest. Refusal to publish will only confirm that the Government are again putting the profits of energy giants ahead of the sky-high bills for families, pensioners and businesses.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Does my hon. Friend agree that the Government have still not learned a single thing? If they had learned anything from their mismanagement, the Prime Minister and the new Chancellor would have committed to using the profits of energy companies. That is what they should be doing: as my hon. Friend says, the companies want to be taxed to pay for the Government’s failures, rather than the Government cutting public services and hiking mortgage interest. Does she also agree that the Government need to get their priorities straight when it comes to getting rid of the cap on bankers’ bonuses?
Rachel Reeves
As a member of the Treasury Committee, my hon. Friend understands the issues well. The chief executive of BP says that his company is like a cash machine at the moment. We should be ensuring that companies pay their fair share. The war in Ukraine and the illegal invasion of Ukraine mean windfall profits that they could never have dreamed of, but they also mean the highest bills ever for families and pensioners, so the energy companies should pay their fair share.
Anna McMorrin (Cardiff North) (Lab)
My hon. Friend is making an excellent speech. Professor Sinha, the author of the Institute of Health Equity’s report on fuel poverty, has said that there is no doubt that children will die this winter. In July alone, 12,000 more people phoned the Samaritans. Those are the dire consequences of these political actions, yet our energy companies are taking the profits.
Rachel Reeves
My hon. Friend leads me on to the important issue of public services, which the Chancellor has been quick to put in his sights. This week, the respected Institute for Government gave its assessment of the state of public services after 12 years of Conservative Governments:
“Public services are in a fragile state…Patients are waiting half a day in A&E, weeks for GP appointments and a year or more for elective treatments. Few crimes result in charges…Pupils have lost months of learning”.
What an absolutely devastating verdict on the Government’s stewardship of our public services.
Even the Home Secretary, when she is not arguing with tofu, admits that police forces are so stretched that they cannot respond to the victims of crime. The Tories are living on another planet if they think that after a decade of imposing austerity they can come back with season 2, wildly swinging the axe over the country’s already struggling public services.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
My hon. Friend is spot on and Conservative Members should be listening to her speech. We have seen 12 years of cuts to our public services and facilities, but one small glimmer of hope for people in my city was the successful levelling-up bid for a leisure centre in the outer west of Newcastle. However, the project has now been undermined because of the disastrous economic outlook and soaring inflation costs, which are partly a result of the mini-Budget. Does my hon. Friend agree that the Government must not backtrack on their promises? They must support such projects despite the rising inflation costs that are now undermining local government’s ability to deliver them.
Rachel Reeves
Levelling up has truly been replaced by trickle down, and my hon. Friend’s constituents are paying the price.
We need strong public services focused on early intervention and prevention, reducing greater demand with better outcomes for people. We need the Government to stick to their manifesto commitments, including uprating benefits and pensions in line with inflation. It should not be working families, pensioners and the most vulnerable who pay the price for these Tory mistakes.
Rachel Reeves
I will make a bit more progress.
Labour will get value for every pound of taxpayers’ money. That is why I announced last year that a Labour Government will introduce an office for value for money, tackling the endemic waste that we have seen under the Tories. Under the Conservatives, £11.8 billion of public money was handed to fraudsters and organised criminals because of a refusal to include the most basic security checks for covid support. That is before we get to the £7 billion spent on unusable personal protective equipment, the £13 billion wasted on failed defence procurements and the millions and millions flushed down the drain by this Government’s outsourced Serco test and trace system.
This week, we have read reports that the Treasury is shutting down the taxpayer protection taskforce that it belatedly set up in March to try to retrieve the money that the Government gave to the fraudsters. The taskforce should not be shut down; it should be empowered to get taxpayers’ money back.
As for the £3.5 billion handed out to friends of and donors to the Conservative party, many of whom failed to deliver on those contracts, in business if you award a contract and it does not deliver, you claw the money back. The Government must now strain every sinew to get that money back, because taxpayers demand it, and that comes before the cuts and the austerity that this Government are about to unleash.
The Government say that working people now have to put up with eye-wateringly difficult decisions, but there are so many easy decisions that the Government could make to stop families feeling the pain. Why keep in place an outdated and unjustifiable non-dom tax status loophole which means that some of the wealthiest pay no tax on their incomes while ordinary working people face the highest tax burden in 70 years in this low-growth, high-tax economy? Labour’s principle is clear: if you make Britain your home, you should pay your taxes here. Research carried out at the London School of Economics and Warwick University has shown that the UK’s non-dom system costs us £3.2 billion a year.
Look at the tax break for private equity managers, which was cooked up in the 1980s by a Conservative Government—a tax break of nearly £200,000 each for 2,000 private equity bosses every single year! It is not right that bosses pay a lower rate of tax on their bonuses than workers do on their wages. It is indefensible, so Labour will abolish it. At present, private schools enjoy charitable status which makes them exempt from both business rates and VAT at a cost of £1.7 billion every year, but here is the truth: private schools are not charities. We will end that exemption, and put that money back into our state schools.
That is what a fair tax system looks like, and that is what Britain will get with a Labour Government: fiscal responsibility, and a fair tax system that puts working people first. Labour will stabilise the economy by being responsible with public finances through our strong fiscal rules. It is on that foundation that our green prosperity plan will invest in the jobs and industries of tomorrow as we meet our climate obligations and secure our energy supply here in Britain. There are great opportunities for the industries of the future, and opportunities for Government to partner with industry and invest in, for instance, domestic renewables such as wind, hydrogen and carbon capture, and nuclear as well. Labour will create a national wealth fund so that when we build British industry, the public will have a stake and receive a return on those investments. The next Labour Government will buy, make and sell more here in Britain, with an industrial strategy that is pro-worker and pro-business. We will breathe new life into our high streets by calling time on the outdated model of business rates. That is a real plan for the future, not lurching from crisis to crisis like the Conservatives.
Rachel Reeves
No. I have almost run out of time. I have been speaking for 20 minutes, and I have taken a great many interventions.
So much damage has been done to our economy by the Conservatives’ reckless mini-Budget, but the Government can prevent things from becoming even worse. Today they can show that they have listened, and publish the OBR forecasts and assessments that they are sitting on so we can know the true state of our public finances and our economy. They should publish the assessments that they already have of the windfall profits of the energy giants in the next two years, and then set out clear steps to introduce a proper windfall tax. It is a sign of how far off the road of competence and responsibility this Conservative Government are that they have not already done those basic things.
People can no longer afford the cost of Tory failure. We need a stronger and fairer economy from a Government committed to financial responsibility, and a serious plan for growth that puts working people first. The very least the Government can do is publish the numbers, and I urge all Members to support this motion to ensure that they do exactly that.
The Financial Secretary to the Treasury (Andrew Griffith)
Our constituents are worried about what the current global turbulence in the economy means for their jobs, their prospects and their families. They want to know that they can afford to get by, and that once the economic storm clouds have passed—which they will—they can thrive. It is these concerns, those of our constituents, that we are thinking about, rather than—I say this in all due seriousness to the hon. Member for Leeds West (Rachel Reeves), because I think she knows better—misrepresenting global trends. We are focused on protecting the most vulnerable and looking after our economy.
Mr Holden
I wonder whether my hon. Friend noted, as I did, how little was said about the real cause of the current issues in the global markets: Russia’s illegal invasion of Ukraine, driving energy prices up across the globe, driving inflation up across the globe, and driving interest rates up. There was no mention of that from the Opposition. Whose side are they on when it comes to these situations? It is clear to me that they are not paying attention to the real issues underlying the global markets, and they do not understand what is going on.
Andrew Griffith
My hon. Friend has made a very important point. I think the whole House will want to acknowledge not only the impact on our economy of covid and the measures that Members on both sides of the House supported, but Putin’s invasion of Ukraine. It does us a great disservice to try to be over-partisan about the impacts of global trends that are happening in every western economy.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Minister has a strong track record of being knowledgeable about finance in the private sector, so will he acknowledge that the mini-Budget caused huge chaos in the markets? Notwithstanding the international issues which are a backdrop to this, this Government have scored an own goal by making the position a hell of a lot worse. Surely the Minister, with his financial background, will acknowledge that.
Andrew Griffith
The Chair of the Public Accounts Committee has made some fair points. We have acknowledged that mistakes have been made—the Prime Minister herself has said that—and I am happy to say it in the spirit in which the hon. Lady acknowledges that there are wider factors at work in the economy. It ill behoves the House to make those over-partisan points when our constituents are looking to us collectively for what we are able to do.
Andrew Griffith
I will make a little progress and then come back to hon. Members, if I may.
The most important thing we can do now, in the national interest, is cement that financial and economic stability. That is what is vital for all those who are concerned about their jobs, those who have to pay their mortgages, and those who are saving for retirement. It is essential for businesses investing for the future, and for society as we get through the bout of rising prices.
Margaret Greenwood (Wirral West) (Lab)
Last month the Bank of England had to step in with a promise to buy up to £65 billion of Government debt after pension funds managing huge sums on behalf of retired people across the country came close to collapse amid an unprecedented meltdown in UK Government bond markets following the Government’s mini-Budget. Last week the Bank had to step in again. BT’s pension scheme has revealed that the value of its assets has plummeted by an estimated £11 billion in recent weeks. Will the Minister apologise for the chaos that his party has brought to the pensions sector, and what can he say to my constituents to reassure them that their pensions are actually safe?
Andrew Griffith
I think we all have constituents who are rightly worried in these times of global turbulence and increasing interest rates in every part of the world. The hon. Lady will forgive me, I hope, if I do not comment on the specific operations of the Bank of England, which I think would be inappropriate—other than thanking hard-working officials for the intervention that they have made over the last couple of weeks.
Andrew Griffith
I will give way one more time, and then, if Members will forgive me, I will make some progress.
Mr Perkins
I am grateful to the Minister.
Of course global factors meant that the situation was dangerous, but will the Minister acknowledge that it is precisely because of those global factors that the new Prime Minister and Chancellor had to tread very, very carefully? That is why what they did was so reckless and so damaging.
Andrew Griffith
I am not sure that I can fully accept what the hon. Member says, but the Government are committed to the independence of our institutions. It is very important that people understand that. Both the Bank of England and the Office for Budget Responsibility have a valuable role to play, which is why when the Chancellor presents his forecast to the House in just eight parliamentary days’ time he will ensure that it has been fully presented to, and signed off by, the Office for Budget Responsibility.
John Glen (Salisbury) (Con)
I recognise the value of stability and predictability. Given the changes to the corporation tax rate, and given that under the previous Administration my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) was going to reduce the bank corporation tax surcharge from 8% to 3%, could the Minister confirm the Government’s intentions, and the assessment made of the effect for banks on competitiveness in financial services?
Andrew Griffith
I thank my hon. Friend, and pay tribute to my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak) for all that he did to put the economy in a strong position, and to navigate the very difficult shoals of the unprecedented covid pandemic.
Andrew Griffith
I will make a little progress and then give way. As the Chancellor said, at this point all measures remain on the table. My hon. Friend the Member for Salisbury (John Glen) will indulge me if I do not announce that policy at the Dispatch Box today. His point is well understood, and others have made it to me, as Financial Secretary.
John Glen
May I simply point out that, if the rate is retained as an 8% surcharge, banks will be paying 33%? When added to the employment costs for national insurance, they may have issues in terms of competitiveness. If that is necessary, could the Minister please make it clear to banks and the markets, so that they can plan for the future?
Andrew Griffith
As I said a moment ago, we have just eight sitting days now until the statement. Part of my role is to stay in very close touch with our highly valued banking community, and to continue to drive the competitiveness of the United Kingdom as a place for the financial services sector to make the prodigious contribution to the economy that Conservative Members particularly value. As the Chancellor said, we will continue to prioritise fiscal stability, and the United Kingdom will always pay its way. We will fund our promises, and we remain committed to fiscal discipline. That means that we will do whatever is necessary to ensure that debt as a share of the economy comes down in the medium term.
Rushanara Ali
I know that the Minister is relatively new to the job; I hope that he lasts longer than some of his predecessors. The Bank of England has made it clear that the mini-Budget has caused a material risk to the UK’s financial stability. As has been said, our constituents’ mortgages have gone up, and will be going up by £500, and by up to £900 in London and the south-east. Will he tell us what his Government will do to bring down those mortgages rates, many of which will be a direct consequence of the mini-Budget’s failures and fiasco?
Andrew Griffith
I was in the process of telling the hon. Lady exactly what the Government will do. No one should trivialise the impact of rising global interest rates on mortgages. The last time mortgages were at this level was under her Government, and not after the backdrop of a global pandemic and a war on European soil.
Andrew Griffith
No, I think I have been relatively generous in taking interventions from the Opposition. I will make some progress, because I am sure that many people would like to speak. As the House knows, we will publish the medium-term fiscal plan, which will be fully reported on by the OBR and will set out our approach to fiscal responsibility: the variable that we can control in Government to help to reduce rates of interest going forward. We remain committed to pursuing growth as the driver of prosperity for all.
Anna Firth (Southend West) (Con)
Does my hon. Friend agree that the Government’s policy of creating investment zones will boost business and create jobs—for hard-working people in Southend West, I hope, and across the country? It is the essence of financial responsibility, and will put us on the path to long-term growth and long-term financial health.
Andrew Griffith
My hon. Friend the new Member for Southend West makes a very important point. We are absolutely committed to investment zones. I wish her success in her campaign to attract one to Southend-on-Sea. As the Secretary of State for Levelling Up, Housing and Communities has noted, this will be a transformational programme for the whole United Kingdom, and I hope that many Opposition Members get behind it and seek to attract such zones to their own constituencies.
We are continuing to deliver support for families by cutting national insurance, and we will save an average of £330 for 28 million hard-working people. We will deliver reforms to boost housing supply and accelerate infrastructure projects across the country, enabling growth where it is needed the most.
James Cartlidge
Last week, we considered the Health and Social Care Levy (Repeal) Bill. I spoke in the debate, and said that I hoped that the repeal would not lead to the cap on social care being watered down. As I understand it, the cap may now be delayed or even not come into force at all. We should all be very concerned about that. One of the greatest achievements of the previous Prime Minister was finally introducing a tangible policy on social care. Does the Minister accept that when we repealed the levy it would have been better had we known then that it would have a material impact on social care policy?
Andrew Griffith
My hon. Friend makes his point typically strongly. He, like me, will look forward to hearing the medium-term fiscal strategy shortly. The hon. Member for Bethnal Green and Bow (Rushanara Ali) asked what we will do to protect households with their interest rates and mortgages.
Andrew Griffith
I will not give way at the moment. The difficult decisions that were taken by the Chancellor earlier this week will ensure that we continue to grow the economy. Those decisions will raise around £32 billion every year. Perhaps the Opposition will use the opportunity of the debate to enlighten the House, but to date they have said very little about how they would find the money to do that.
Andrew Griffith
Not at the moment.
That brings me to our energy price guarantee, which is a landmark policy that will help millions of people to get through this most difficult winter. Independent and external forecasts expect it to reduce inflation by around five percentage points. It is one of the most generous schemes in the world, and was the biggest single expense in the growth plan, with an estimated cost of around £60 billion between now and the end of March.
Edward Timpson (Eddisbury) (Con)
I think the whole House and many of our constituents can support the energy price guarantee and support scheme, but in constituencies such as mine many households are off-grid. Although there is a separate scheme, there is an issue of dual use on a single site. To ensure that there is parity and equity in rolling through that scheme, will the Minister undertake to ensure that there is an ongoing review, to ensure that none of my constituents misses out on the forthcoming generous support from the Government?
Andrew Griffith
Just like the constituents of Arundel and South Downs, I do not want the constituents of Eddisbury to face any prejudice. My hon. Friend makes his point well, and I am sure that the Energy Minister will be listening.
Alan Brown (Kilmarnock and Loudoun) (SNP)
If the so-called energy price guarantee will reduce inflation by 4% or 5%, what will inflation go to in April 2023 when the Government remove it?
Andrew Griffith
I was citing external forecasts, rather than making forecasts of where energy prices in an unprecedented moment of global volatility will be six months hence. Maybe the hon. Member has a greater insight into that.
Andrew Griffith
No. Treasury officials will lead a review regarding the appropriate measures to support households and businesses with their energy needs beyond April, but without the taxpayer picking up an inappropriate share of the burden.
Dr Luke Evans (Bosworth) (Con)
The energy plan means that the most vulnerable get up to £1,200 in support. When it comes to the review in April, will the Minister ensure that the most vulnerable people are again at the forefront of getting that support?
Andrew Griffith
No, I am going to make some progress.
I have talked about the measures that we are taking to support growth, and about the tough decisions that the Chancellor spoke about in the House on Monday. I reiterate that, as we must not sugar coat it. In common with every other major economy, we face economic challenges at this time for three reasons.
First, there is the cost of covid. Through the first two years of the pandemic, the Government borrowed more than £300 billion more than had been forecast in March 2020—about £260 billion more in 2020-21 and £70 billion more in 2021-22—to fund emergency covid support, which had support on both sides of the House.
Secondly, interest rates are rising around the world on the back of increased costs and Putin’s war in Ukraine.
Jerome Mayhew (Broadland) (Con)
We recently heard that inflation in this country has risen to 10.1%, but is the Minister aware that the European Union reported its inflation figures this morning, and inflation in the eurozone has risen to 10.9%?
Andrew Griffith
My hon. Friend is absolutely right. I was aware of that, and inflation is 11% in Germany and 17% in the Netherlands. I hope that the hon. Member for Leeds West is listening, because we are seeing this phenomenon in all major developed economies. She has a background in economics, and I hope she can devote some of her energy to sharing her wisdom and insight with colleagues.
When it comes to interest rates, the Federal Reserve has implemented three consecutive increases of three quarters of a basis point, and the European Central Bank has increased rates at its last two meetings, including its largest ever single rate hike in September. As we hear contributions from Opposition Members, I hope that we will hear a little more about the broader context and a little less about attributing the situation to this Government.
Mike Amesbury (Weaver Vale) (Lab)
I thank the Minister for being generous with his time. If it is all the fault of the global economy, why was the 38-day Chancellor sacked?
Andrew Griffith
The hon. Gentleman is generous with his comments. In fairness, it is not the Government’s position that it is all the fault of the global economy, which is why the Prime Minister apologised and changed her Chancellor, and why different, difficult decisions have been made. In the spirit of having a proper debate on these matters, I hope the hon. Gentleman will accept that I was not saying what he suggests. I was introducing, and will continue to introduce, the very important broader context of these economic issues.
Several hon. Members rose—
Andrew Griffith
I am going to finish as quickly as I can.
I have already said that difficult decisions will have to be made. Those decisions will never be made at the expense of the most vulnerable, and I welcome the fact that my right hon. Friend the Prime Minister today reconfirmed at the Dispatch Box our commitment to protecting the triple lock, which was noticeably not forthcoming from the Opposition Front Bench.
The fact is that since the 2008 financial crisis we have all been held back by weak economic growth. For 14 years, people’s living standards—especially the living standards of the most vulnerable, whom the Opposition claim to talk about—have not been rising as quickly as they should have been. The bottom line is that by accepting the status quo, without taking any action at all, we would condemn ourselves and future generations in Britain to decline.
We face challenges, but we should address them from a place of optimism. I remind Members that the fundamentals of the UK economy remain resilient, with unemployment at its lowest level in nearly 50 years and with the UK forecast to have the fastest growth in the G7 in 2022. We have incredible strengths.
I met investors this morning, and they talked about the capital they want to put to work in the United Kingdom, in science, research and technology. We have some of the world’s best universities, and those who would underestimate and talk down our prospects should not forget that we have one wonderful thing: the British people. With credibility and conviction, we are going to deliver the roads, railways and broadband we need. We will recruit the best doctors, empower the best teachers and back the bravest soldiers. And when conditions allow, when it is consistent with sound public finances, we will continue to cut taxes to further unleash economic growth.
A few weeks ago, the Government took a bold approach to resetting our ambition for the growth rate of the economy, protecting our public services and delivering sustainably low taxes. That remains the most important challenge of our time. The question earlier this week was whether we would take action to protect the economy or whether we would not. Our response should leave nobody in any doubt that we are a Government who choose action in the national interest.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Colleagues will be aware that there is a great deal of interest in this debate, so I warn the next speakers that, after the SNP spokesperson, I will introduce a six-minute time limit. I call the SNP spokesperson, Drew Hendry.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
A report out today shows that 60% of people across the nations of the UK are worried about their household financial prospects. The same report shows that nine in 10 people have delayed putting on the heating due to concern about the cost.
Members across the House will have received emails and calls from people who have never before been moved to contact their MP and who are now feeling those concerns for themselves. When those who have felt relatively comfortable start feeling the pinch, imagine what it means for those on the rungs of the ladder below. Then imagine what it means for those who were not getting by at all, who were already suffering from poverty and who had £20 a week cut from their universal credit. It is crushing them. It is destroying families. It is clearing out food banks. It is moving third-sector and support service staff to tears with the feeling of futility. And it is destroying the health of children.
The actions of this Westminster Government have left vulnerable households abandoned, betrayed and cast aside. This Government laid bare their ideology during the chaotic period of the so-called mini-Budget. Make no mistake, while they were doing that damage, they simply pulled back the curtain on their core ideology. Their error was being so obvious, so blunt, that political spin could not cover it. Their focus has always been on making the rich richer. When their key policies result in poverty but mean £40,000 extra each year for those earning £1 million a year it is a bit of a giveaway, is it not? Only those earning more than £155,000 a year were net beneficiaries of the mini-Budget.
Of course, this month’s Chancellor has had to scrap this unfunded giveaway to the most well-off, not through genuine contrition but because he was forced to do so. Limp and clearly insincere apologies do not fool anyone. The parachute Chancellor has dropped in to try to close the curtain and return to the drip, drip of chronic austerity that is the usual modus operandi. People now see through it.
With inflation above 10%, the poor are facing the hardest choices. Food inflation is higher than 10%, which means they have really tough choices. The Chancellor has taken away the two-year energy price cap. Although the cap is welcome, it still means a doubling of prices from last year. Ominously, there will be a review in six months. There is no certainty for increasingly desperate people, while rich bankers will still see their wages rocket, as the cap on their bonuses has been removed.
James Cartlidge
On the subject of banking, can the hon. Gentleman confirm that current SNP policy is that Scotland, were it to become independent, would have a currency with no lender of last resort?
Drew Hendry
Let me deal with two issues. First, no amount of deflection by Conservative Members will take away from the fact that they are punishing the poor and they have trashed the economy in recent weeks. Secondly, on the prospectus for independence, people in Scotland should have a choice: to have those questions put before them and to vote on them. It is the hon. Gentleman’s Government who are denying democracy in that case.
Drew Hendry
No, I am going to make some progress.
The Chancellor has ominously set that cap up for a review in six months, providing no certainty for increasingly desperate people, while rich bankers will still be able to see their wages rocket, as I said, with the cap on their bonuses removed. The energy crisis is even more galling for my constituents, and many more across Scotland, as they see their energy being produced from their backyards, yet folk in the colder climate of the highlands pay more per unit for electricity than people anywhere else in the UK—renewable energy suppliers are charged more to connect to the grid than those anywhere else in the UK, and the picture is particularly bleak for those who are off the gas grid.
Brendan O'Hara (Argyll and Bute) (SNP)
My hon. Friend will be aware that even on the Government’s own estimates heating oil has gone up by 147% since January, and in constituencies such as ours it is costing more than £1,200 to fill a tank, and sometimes this is with a minimum delivery of 500 litres. Does he share my concern that in these colder, rural and more economically fragile areas of the UK not everyone has £500 to replenish their oil tank? This will not be a choice of turning their heating on or not; they simply will not have the choice, because they will not have the oil or the means to replenish the tank when they need it. This is a crisis.
Drew Hendry
My hon. Friend is completely right and he represents a constituency with many off gas grid constituents, as I do. He makes a telling point about the cost of that. What support are the UK Government giving to these people who face twice the bills that other people will? They are giving a measly £100.
Imran Hussain
Even today, the Minister refuses to give us figures on the expected windfall revenue. Does the hon. Gentleman agree that the simple fact remains that this Government always side with the energy giants as opposed to ordinary British people?
Drew Hendry
The hon. Gentleman makes a fair point. As I said in my opening remarks, the Government’s ideology is that the rich will get richer while the poor will suffer. That has been underlined over the past few weeks like at no other time in this place. The scales have fallen away—
Hywel Williams (Arfon) (PC)
I tried to intervene on the Minister on this broad point. Both he and his friends refer continually to growth, but I do not think I have heard any indication from him this afternoon, or elsewhere, as to how that growth will be spread beyond London and the south-east. Is that not a gaping gap in the Government’s policy? It will certainly affect the constituents of the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), as it will my constituents and those in Wales, the north of England and Scotland.
Drew Hendry
Again, the hon. Gentleman makes a fantastic point. The growth we are seeing from this Government is the growth in poverty and in inequality. That continues to rise and the Government are very good at driving it forward.
As I was saying, those off gas grid consumers are being given £100. Scotland is energy rich and a net exporter of energy. Renewable energy is six to nine times cheaper than the gas-fired power our prices are linked to. In Scotland we have the energy, but until we have the power our people will continue to be ignored over their basic needs and their potential.
After the Chancellor’s statement, the Scottish National party, through my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), tried to introduce some certainty for households terrified by the rising energy prices by tabling an amendment to the Energy Prices Bill that would have required Ministers to outline within 28 days how support after April would be provided to households. Labour failed to support that amendment. The Chancellor says that more difficult decisions will have to be made, which means cutting the funding for things that ordinary families and the most vulnerable rely on. We should note that the threat for those struggling by, many of them working people relying on universal credit, has not been lifted; there may be further reductions, on top of the fact that inflation has been three times higher than their last increase. Common decency demands that benefits must be fully uprated. Are the Government capable of that?
We should also remember that this Government still have not reversed the pernicious £20 a week cut to UC, yet the Chancellor had the cheek to say—this has been repeated today—that the Government’s priority will always be the most vulnerable. Does that include pensioners? This week, he was briefing journalists, including Robert Peston, who said this today, that the Government were abandoning the triple lock. With inflation rampant—today’s figure is 10.1%—this means further hardship for Scotland’s older people. Yet today, the Prime Minister says no. Is this another U-turn? Or is it like when she says that the energy cap will mean no family would pay more than £2,500 per year? Is it just—let me find some parliamentary language—questionable?
If the Government really mean that they care, they would reinstate the £20 a week to UC, scrap the bedroom tax, get rid of the odious rape clause and uprate benefits in line with inflation. They could choose to follow the progressive lead of the Scottish Government, who have brought in, among a wide package—[Interruption.] The Minister is laughing. The Scottish Government have brought in the Scottish child payment, which has risen now to £25 a week. That is helping to mitigate the callous cut made by his Government. They could choose to follow that progressive lead and to follow what the Scottish Government have done in doubling the December bridging payment from £130 to £260, at a time when families will need it most, in the depth of winter and at Christmas. The Government could pay for much of this by taxing the excess profits of companies that are clearly making them.
Alan Brown
My hon. Friend was talking about the Tories not keeping their pledge to protect the most vulnerable, and he has highlighted some awful policies that are making people more vulnerable. In addition, under this Government fuel poverty has increased by more than 50% and now affects 6.7 million households. So to say that the Government are protecting the vulnerable is, unfortunately, a sick joke.
Drew Hendry
My hon. Friend has said it all there—it is clear. To hear laughter this afternoon from Government Front Benchers about measures to mitigate poverty is shameful.
The Government could have taxed some of the excess profits, and companies are daring them to do so. Sometimes, as with the boss of Shell, they are asking the Government to do this. The Government could do this but they will not, because protecting the vulnerable is not what Tories do. It gets worse, because now the Bank of England will react with further interest rate rises, pushing mortgages to unaffordable heights for some homeowners and prospective buyers. As we have heard again today, the Government want to lay all the blame on the illegal war in Ukraine and on global conditions, but everybody knows that much of this is Tory-inflicted. A big part of that is Brexit. It has hamstrung businesses by starving them of vital staff; it has pushed inflation higher through import prices; the UK’s shocking balance of trade has been exposed; and it has ushered in a raft of new tax costs for businesses across the nations of the UK. As the former Bank of England Governor Mark Carney pointed out:
“In 2016 the British economy was 90% the size of Germany’s. Now it is…70%.”
That was before the clusterbùrach of the mini-Budget. Labour, with all the backbone of a squid, joined at the tentacles with this Tory ideology, is trying to pretend that somehow it will make Brexit work. Most Labour Members do not believe that, and it flies in the face of all the logic and informed opinion.
All this chaos is a timely reminder for the people of Scotland about why they should choose a different path. I say to people back home: look at what the Government are doing to you, to your communities, to your businesses, to your families and to your children’s futures. Let us make comparisons with the UK. Other countries similar to Scotland are wealthier and more equal, and have higher productivity, lower poverty, lower child poverty and lower pensioner poverty. Democracy can and will triumph. Scotland has the right to choose a very different path from this one, to build a better future as an independent nation and as an equal partner in the European Union—one that seeks to lift people up, not keep them down, and to live by the values of a welcoming, diverse and compassionate nation.
Mr William Wragg (Hazel Grove) (Con)
Thank you very much for calling me so early in the debate, Madam Deputy Speaker. If I may strike a conciliatory tone at the outset of my remarks, I thank everybody in this House who sent me remarkable support in the course of the summer recess. There is nothing unique about my having had issues with my mental health, but what is perhaps more unique than most in the country is that I have the platform and opportunity to highlight that and to speak empathetically, and I am very grateful indeed. In making this speech, there are a number of things in my life that I am struggling with at the moment, but, bizarrely, it seems that making a speech in the House of Commons is not one of them. I am not entirely sure whether that is attuned to my state of mind, and no doubt my hon. Friends on the Front Bench will tell me afterwards.
I want to speak on this important matter because I have not said a word to my constituents about the events of the last month or so. I watched on from home when the Chancellor gave his so-called mini-Budget, which should have been delivered as a full Budget, with the proper procedures of the House duly followed. As the time passed, I grew increasingly concerned by its nature. I am quite an old-fashioned person and, in respect of this House, I like to look at the wording of the motion. I also believe in speaking one’s mind, and I can only say that today is the exact centenary of a meeting in 1922, during which Conservative Back Benchers met to decide that they would stand on their own ticket in the 1992 general election, thereby depriving David Lloyd George of the opportunity to continue as Prime Minister. As vice-chair of the 1922 Committee—the foundation of which followed the events of that afternoon and evening—I think it is quite important to speak my mind. I realise there are some in my party who lament that state of affairs, but I hope they will indulge me, as I have indulged them over time.
Many things that have been said by those on the Front Bench are very true. There is an international situation, an illegal invasion of Ukraine and a spike in the international cost of energy. The Government have many things to be proud of—not least the employment record—but there is no escaping the fact that the measures contained within the financial statement directly caused the situation to be made worse. I am quite sure that was not intentional, but I cannot easily forgive the lack of foresight by senior members of the Government. My forgiveness is not what that the Government should seek at all; it should be that of our constituents, who are in a difficult enough situation as it is. To see this as a question of international turbulence inexplicably increasing the mortgage rates and inexplicably necessitating further cuts to public expenditure—I cannot easily forgive that.
In the course of the summer, I found the trashing of the reputations of independent organisations in this country, such as the Bank of England and the Office for Budget Responsibility, to be near to malice in its nature. Treasury orthodoxy came under attack. I am a Conservative, and I suppose that orthodoxy goes hand in hand with that. That is Conservative orthodoxy. Conservative orthodoxy is sound financial management and a balanced budget—not sticking pamphlets into a test tube, shaking it up and seeing what happens. That is not the way the Conservative party should ever govern.
Apparently I can be a little difficult to handle, and my hon. Friend the Member for Workington (Mark Jenkinson) must have wondered what he had done in a previous life to find me in his flock as my Whip. I always commiserate with my Whip when they are appointed; indeed, I have been round the block with a number of them, and I end up getting round to them all over again. But there is a serious point to all this: I am personally ashamed of what occurred with the financial statement, because I cannot go and face my constituents, look them in the eye and say that they should support our great party. The polls would seem to bear that out.
The next debate is apparently a confidence issue. Well, I am not going to fall into that trap. I oppose fracking and thought that we had come to a considered position on it, but there we go. I will vote with the Government Whip.
Feryal Clark (Enfield North) (Lab)
Will the hon. Gentleman be lending the Prime Minister his confidence vote in the next debate?
Mr Wragg
The hon. Lady is very charitable in giving me a further minute for my peroration, although it seems a shame to extend it too long. The fracking debate that follows has been made a confidence vote. If I voted as I would wish, I would lose the Whip. I would no longer be a vice-chair of the 1922 Committee. I would no longer maintain my position as a Chair of one of the Select Committees of the House. Indeed, because of that, my letter lodged with my hon. Friend the Member for Altrincham and Sale West (Sir Graham Brady) would fall, and I wish to maintain that letter with him.
Geraint Davies
On a point of order, Madam Deputy Speaker. Is it in order for a Member to say that he is against fracking but will vote in the opposite direction?
Madam Deputy Speaker (Dame Rosie Winterton)
That is not a point of order. Each Member is accountable for their own decisions on voting, and I am sure the hon. Gentleman would not want me to interfere with that.
Sir Stephen Timms (East Ham) (Lab)
I am very pleased to follow the hon. Member for Hazel Grove (Mr Wragg), and I pay tribute to him for the frankness of the personal remarks with which he opened his speech. I must say that the whole speech contained a great deal of good sense, which I hope his hon. Friends on his Front Bench will have heard and paid attention to.
Christians on the Left organises a church service each year on the Sunday morning when the Labour party conference begins, and the preacher this year was the Archbishop of York. In the very fine address that he gave on that occasion, he said:
“Increasingly, the safety net in our nation is a foodbank, where more and more people have to go to get what our economy itself fails to provide.”
He is absolutely right: something fundamental has gone wrong in our economy. For many people, including those in employment, the economy does not work. More and more are turning to food banks to survive. Some 61,000 food parcels were distributed by the Trussell Trust’s food banks in 2010-11, whereas the number was 2.5 million in 2020-21—a fortyfold increase in a decade.
In the leadership election campaign in the summer, the Prime Minister acknowledged her party’s failure on economic growth, and she was absolutely right to do so. The new Chancellor told us on Monday that the record on growth had been very good. That is one of many things that he and the Prime Minister seem to disagree about, but on this one, I am definitely with the Prime Minister. As my hon. Friend the Member for Leeds West (Rachel Reeves) often points out, we are a high-tax economy because we have been a low-growth economy.
Last April social security benefits were raised by 3.1%, even though inflation was nearly 10%. That was justified on the basis that the regular formula for uprating benefits uses the figure for inflation from the previous September. That formula has, on several occasions, been disapplied since 2010, but never in the interests of the poorest families in the country—only ever to their disadvantage. This year, the formula was applied, piling on yet another real-terms cut in benefits, reducing them to the lowest real-terms level for more than 30 years. The then Chancellor and the then Prime Minister implicitly recognised that unfairness and promised to use the same formula next April, delivering, we have learned today, a 10.1% rise.
The current Chancellor must now decide whether to keep that promise to the poorest families in the country during a cost of living crisis. The Minister, in his opening remarks, referred to protecting the vulnerable. I really hope that he meant that, because those families have so often had a kicking from this Government over the past 12 years. If that happens again, dependence on food banks will get yet another large boost as thousands more people have to turn to them to survive—on top of the 700,000 households who did so in 2019-20. The food banks themselves are struggling now because donors cannot afford to give as much. Mass food bank dependence is a potent symptom of the economic failure of the past 12 years.
Yesterday, representatives from Muscular Dystrophy UK came to Parliament to spell out the hardship from rising prices facing the people they support, because, for example, those people depend on machinery—ventilators—that have to be permanently switched on and powered. On Monday, the Chancellor spoke of compassionate conservatism. If that is not just a vacuous slogan, those people’s needs must be recognised in the benefit uprating decision that could be announced on Monday week.
The benefit cap was introduced 10 years ago and was supposed to reflect median earnings. It was changed once in 2016, when it was cut, and it has never been increased. This time, surely, it must be. If it is not, at a time when inflation is over 10%, thousands more people will crash into the cap next April and be forced to depend on food banks, heaping yet another economic failure on the catastrophic blunders, as the hon. Member for Hazel Grove rightly pointed out, of the past few weeks.
Steve Double (St Austell and Newquay) (Con)
I think we all knew that whoever was Prime Minister or Chancellor and in government at this particular time were going to face some really tough decisions. The fall-out from the pandemic, the invasion of Ukraine and a number of other domestic and global factors were going to mean that some really difficult decisions would have to be made around our economy and our fiscal policy. None the less, the one thing that we should all be able to depend on is that, no matter how difficult times are, the Government will not make those decisions even harder. Sadly, that is what has happened as a result of the rushed mini-Budget. The fall-out has been a loss of confidence—a loss of confidence in the markets and, talking to many local businesses in my constituency in the two weeks immediately after the mini-Budget, a great loss of confidence in the business community.
Growth is a hard-won thing. We do not achieve growth simply by saying as loudly and passionately as possible that we are going to get growth. Growth needs to be nurtured with the right policies that instil confidence in the business community. It is therefore incredibly welcome, and I am incredibly thankful, that the new Chancellor has stepped up and taken a grip on the situation. I am also delighted to see my very good friend in the position of Chief Secretary to the Treasury. Between the two of them, I have great confidence that they will bring the grip and the leadership to the Treasury that is necessary to create the stability we now need to address this difficult situation. As a result, many elements of the original mini-Budget have now been dropped, and we await further details in the near future of exactly how the Government will now balance the books and lay out their policy going forward.
However, we really need to know what the Prime Minister’s policies are. She made a number of very bold statements in her leadership campaign to become Prime Minister, most of which have now been dropped. It is very important that we have confidence that No.10 and No.11 are in lockstep at this challenging time and that they have the same policies, so we need the Prime Minister to confirm exactly what her policies are.
We are aware that some very difficult decisions lie ahead but, in making those decisions, it is vital that we protect the most vulnerable in our society from the damage that has been caused. Those who are least able to shoulder the burden should not be required to pay the price for it. Therefore, it was incredibly welcome that the Prime Minister gave a clear statement at the Dispatch Box that the triple lock will remain in place for pensions. Pensioners in my constituency and across the country will welcome the reassurance that that triple lock will be in place and that they will get a rise in their pension in line with prices.
It is vital to do a similar thing with benefits. The Government have done a lot of work over many years in reforming benefits. Universal credit pays people to be in work, and I have heard at first hand how popular it is, but it is right that those benefits keep pace with the increase in prices and that those on benefits are not the ones who pay the price of balancing the books.
One measure that has survived the cull from the mini-Budget is the cut in stamp duty. Naturally, I am someone who welcomes a cut in stamp duty. However, Cornwall is currently in the middle of a major housing crisis. Experience from the previous cut in stamp duty during the pandemic showed that it fuelled demand for second homes and investment properties. That inflated house prices in Cornwall way higher than the national increase, meaning that even more local people are unable to afford to buy a house. If the Government are to press ahead with the stamp duty cut, will they ensure that it applies only to primary residences and that those who seek to buy second homes and investment properties for holiday lets are not able to attract the proposed cut? If the cut goes ahead, all we will do is fuel second home and investment property purchases in tourist areas such as Cornwall, making our housing crisis even worse. We need the Government to help us address that so that local people can get the housing they need. I ask the Ministers on the Front Bench to take that particular point away and look at it. Yes, a stamp duty cut is welcome to help people buying a home, particularly their first home, but it should not go to those who are buying second and subsequent homes.
All in all, after a very difficult time, I am in a much better place and am confident that the new team in the Treasury has a grip on the situation and will provide the stability and leadership that we need. I look forward to hearing more details in due course of exactly what policies will be put in place.
Paula Barker (Liverpool, Wavertree) (Lab)
Government Members should not think for one second that the Opposition will relent from holding them to account for this dog’s dinner, which is entirely of their own making. Like a broken record, the lame duck Prime Minister cites global economic headwinds, refusing to take any responsibility for the decisions that brought the British economy to the edge of disaster.
We have a Prime Minister in office but not in power, humiliated and bereft of ideas. Her manifesto drawn up by the libertarian right and the Institute of Economic Affairs has been cut to ribbons. The dogma espoused in “Britannia Unchained” must never again be allowed to reign supreme in Whitehall. In fact, the ideas must be consigned to the dustbin of history.
Now the Prime Minister has brought back an old foe, who underfunded our NHS for years, to implement austerity 2.0, and once again it will be communities like mine in Liverpool, Wavertree who suffer. This is a Tory crisis, and the damage has been done: an estimated 14,344 people in Liverpool will be paying higher mortgage bills next year as a result of this Government’s irresponsible actions. The Prime Minister and the Chancellor now admit that the mini-Budget caused mortgage rates to go up and borrowing costs to surge—a Tory cost we will be living with for years.
Working people have gone through enough. Now they are told that, to re-establish market stability, the responsibility is being shifted from the Government on to households, communities and working people. It all feels very 2011. Some are even saying that a previous Chancellor, the former Member for Tatton, is pulling the strings. The new Chancellor embodies a very different type of dogma from the Prime Minister’s, but it is dogma nevertheless—a school of economics that saw us enter the coronavirus pandemic with public services under-resourced and under-prepared.
Feryal Clark
Does my hon. Friend agree that it is not just public services, but local councils such as mine in Enfield, which faces a £100 million budget gap due to spiralling inflation, that are paying the price for this Government’s mismanagement of the economy?
Paula Barker
My hon. Friend makes a pivotal point. Local authorities have been cut to the bone. They provide valuable resources and frontline services out in our communities, but they are being decimated yet again by this Government. Our public sector workforce is demoralised after a decade of pay restraint and cuts to frontline services.
If this Government think for one moment that our people will now put up with more of the same while bankers’ bonuses remain uncapped and millionaire bosses continue to rake in profits and dividends, they are sadly mistaken. The British people have woken up to the con. No longer does the promise ring true that each succeeding generation will have it better than the last. That promise, forged in the fire of the post-war consensus, is now in ruins after decades of short-termism and the dominance of capital over labour. We are not all in this together. Not once since 2010 have we all been in this together. Despite the empty rhetoric of a strong economy and levelling up, the Conservative party has always sought to look after its own class interests at the expense of the rest of us.
Young people in my Liverpool, Wavertree constituency now face their lives being put on hold because of this Government’s incompetence. They have done the right thing: they have gone out, worked hard and saved, only to be cheated and denied the opportunity of home ownership. Working people are up against real-terms cuts to their pay and our elderly are anxious about heating their homes in the run-up to winter. There is even more uncertainty for small businesses and charities, such as the amazing Love Wavertree in my constituency, which does incredible work. It announced today that the increase in its energy bills means it must consider whether it can continue to run its community shop, a lifeline for many people in my constituency.
History will not be kind to this Government, nor to anyone who has participated over the past 12 years. The Conservative party is lost. Thankfully, change is coming. As the Leader of the Opposition said so eloquently at Prime Minister’s questions today, we are the Government in waiting; the Conservative party are the Opposition in waiting. Frankly, that cannot come quickly enough.
Jerome Mayhew (Broadland) (Con)
If we have learned one thing from the experience of the past few weeks, it is that there really is no magic money tree, and the Government really do have to pay their way. Some of us, including myself, had started to doubt that essential economic truth because of the Government’s heroic response to the covid crisis.
I had intended to say that we had supported the families and businesses of this country to the tune of £400 billion. However, I listened to the Minister at the Dispatch Box, and when we add up all the unplanned borrowing very substantially as a result of covid, the total is actually £630 billion. It is because of that enormous intervention to support families and businesses by this Government that we did not have thousands of bankruptcies and millions of people cast out of work, as was the expectation. Right hon. and hon. Members will recall a forecast that we would have 12% unemployment, but because of the economic management by this Government the impact was cushioned and the economy protected from that enormous external shock.
The Government were quite right to do that, but why were they able to? It was because of the decade of prudent economic management that repaired the enormous economic damage left by Labour in 2010—prudent decisions that Labour fought against tooth and nail. The Labour motion before us calls for a plan to make the economy work for working people, but Labour does not stand up for working people. Every Labour Government in history, without exception, have left office with more people out of work than before. Their policies, again and again, are not the policies for working people, but the policies of unemployment.
Compare that record with that of this Government. Despite suffering the biggest economic shock to the world economy in a century or perhaps longer, unemployment has not gone up, as it always does under Labour. It has gone down, most recently to 3.5%, the lowest level since I was a tiny boy in 1974. In my Broadland constituency, the rate is even lower. That economic management is forcing employers to offer higher wages for staff—exactly the kind of economic conditions that help workers, particularly the lowest paid. It also serves to increase productivity, as local employers invest to limit the number of staff needed to produce. That is what will pay for the wage increases of the future, not Labour meddling.
I recognise, as does the Prime Minister, that the mini Budget went too fast and too far, and she has rightly apologised for it, but this Government have the right economic policies for growth. As one of the few entrepreneurs in this place, having helped to create hundreds of worthwhile, well-rewarded jobs and careers, I know the truth of the business saying that time kills deals. Speeding up the ability of businesses to get projects up and running will have a huge impact on the future growth and prosperity of this country.
The Government are right to launch investment zones. These zones do not just corral investment into a particular area; by speeding up the process of business, they will also grow the size of the pie. I hope that the results will be so striking that over time they will become a beacon for wider economic policy, showing the way for the rest of the economy.
The Government are also right to accelerate productivity-enhancing infrastructure projects across Britain to help with levelling up, including the building of the western link road in my constituency, which will shorten ambulance times by 20 minutes, open up a swathe of Norfolk businesses to improved market access and relieve the residents of Weston Longville and others from terrible rat-running—all opposed by Labour, I might add. As for the local Lib Dems, literally half of them have said they want it and the other half have said they do not. That says it all about the approach of the Liberal Democrats: to say whatever they think will sound good to local constituents, with no consistency at all.
Finally, the Government are right to speed up the review of EU-inspired regulations to make them bespoke for the United Kingdom economy. That will help British businesses and British workers. This Government have an economic record to be proud of, and I would back them to the hilt over Labour any day.
Mike Amesbury (Weaver Vale) (Lab)
This economic crisis has been manufactured in Downing Street and, as we approach Hallowe’en, the little shop of horrors on the Government Benches adds 10.1% inflation. That horrendous inflation figure brings more anxiety to my constituents in Weaver Vale and across Britain, as Members across the Chamber have documented today. This nightmare made in Downing Street is being experienced every day by ordinary people who are just trying to make ends meet during this economic crisis.
Mortgages are up, energy bills are up, the weekly shop bill is up and rents are up, while wages, benefits and pensions are down. My God—the Bank of England had to intervene with £65 billion to save our pension funds. People on the Government Benches should be ashamed of themselves for supporting this, voting for it and inflicting on us the horror show that we saw in the summer. This has all been driven by Captain Chaos herself, the Prime Minister unchained as a free marketeer ultra.
Who knew that unsuccessful trickle-down economics, unfunded tax cuts for the wealthiest and borrowing on the never, never would fail? The shadow Chancellor knew, the Bank of England knew, the Institute for Fiscal Studies knew, the Office for Budget Responsibility knew, the Financial Times knew and the hon. Member for Hazel Grove (Mr Wragg) knew, as he has eloquently set out in the Chamber today. In fact, a huge coalition of the economically sensible forewarned that the free marketeer ultras would ultimately fail and crash the economy off a cliff.
The lady who is for U-turning by the hour is now trying to deflect the blame for the chaos to the former 38-day Chancellor, while appointing the former architect—let us not forget this—of NHS austerity mark one. She is a Tory Prime Minister in name only, chained to the passenger seat while Chancellor Hunt tries to swerve away from another cliff of chaos, but the damage is done. Who knows how much longer this Prime Minister in title only will have to attempt to deal with this utter mess of her own making? Almost certainly not as long as our constituents, who will be paying for years to come for this economic chaos. We will ensure that that is not forgotten.
Some 4,800 households in Halton and 13,900 in Cheshire West and Chester will now be paying higher mortgage rates, thanks to the experimental mini-Budget that the Prime Minister and former Chancellor now admit caused interest rates to increase—a Budget that the Cabinet signed up to, although they are now in denial about that. That extra £500 a month on average will inevitably mean that homes are repossessed. The situation will be turbocharged by the new Chancellor of doom who has just decided to gift households with energy bills of up to £5,000 next April—complete and utter madness—while the oil and gas companies rake in £170 billion of excess profits. The answer is staring people in the face. It is those companies we need to tackle, and in fact the likes of Shell are expecting it and have built it into their business plans. It is crazy.
On the long road to recovery that we face, a Conservative Government cannot remain in the driving seat, even if the Prime Minister is not at the wheel. We now have the fourth Chancellor in four months, and that is not going to provide confidence and stability. In fact, we have had 12 years of this Government and 12 years of austerity. The new Chancellor of doom has no strategy for growth, and he is set to outline austerity mark two in the Hallowe’en Budget. It is time to wake up from this nightmare. Step aside, and let us have a Labour Government.
James Cartlidge (South Suffolk) (Con)
It is a pleasure to follow the hon. Member for Weaver Vale (Mike Amesbury) and his little shop of horrors, and it is a pleasure to be called to speak on this Labour motion. There is one thing missing from it, because the Labour party normally wants an impact assessment. One thing I have concluded about politics is that we always miss out one impact assessment: the impact of our measures on those who have least of all. When I say least of all, I mean those who have literally nothing—no money, no assets and above all no voice—because they have not been born yet. I am talking about the impact of the decisions we take in government today on those who are to come. In other words, I am talking about the national debt. For me, as a Conservative, it goes to the core of everything I believe in that, as with the environment, we should leave the public finances in a better condition for our grandchildren.
It is fair to say that I warned in the summer that the unfunded measures that were proposed constituted a high-risk strategy. I was dismayed when they were announced and not surprised at their impact. I was, however, delighted by the new appointment to the Treasury of the Chancellor of the Exchequer, my right hon. Friend the Member for South West Surrey (Jeremy Hunt)—I had the privilege of being his Parliamentary Private Secretary when he was Health Secretary and Foreign Secretary—and of the Chief Secretary to the Treasury, my right hon. Friend the Member for Charnwood (Edward Argar), who is an excellent appointment.
I want to reflect on the wider idea of unfunded tax cuts or spending. There are those in the Opposition who have called it libertarianism. It is certainly not conservatism, in my view. Neither is it libertarianism, because the unfunded measures were not matched by spending reductions—in other words, a smaller state—but the money was simply to be borrowed. There is an argument for saying that it is socialism, and it is certainly what we would have expected from the right hon. Member for Islington North (Jeremy Corbyn). But really, when people promise stuff without saying how they would pay for it or making any difficult decisions, it is populism. This is not new. Where we are with the economy has implications for all of us, from all parts of the House. Whatever steps we now take and whatever measures we announce, we will have to say how they will be paid for. We will have to level with the British people.
I had the great privilege of being PPS to the right hon. Member for Richmond (Yorks) (Rishi Sunak) when he was Chancellor. Throughout the pandemic, I never got a single email from a single colleague, no matter how left-wing or right-wing they were, calling for less support. There were only calls for more spending, more tax cuts, more generous support, more debt.
Many, including some Conservative Members, argue that we can borrow because it creates growth. The beauty of that position is that they do not have to say who loses out. That is the hard thing in politics, and we now have to face up to the reality of our position. It will have massive implications for parties on both sides of the House. Even the SNP, in relation to the Women Against State Pension Inequality Campaign, announced a policy to be paid for from the surplus in the national insurance fund, which, though an accounting reality, does not exist as surplus money in the Government accounts that can be committed for years to come. We have all heard such commitments.
Hannah Bardell (Livingston) (SNP)
The hon. Gentleman is talking about accounting and balancing the books. Perhaps he and his colleagues would like to come up to Scotland and take lessons from our Government, who are having to fill the black holes that his Government have created, because we actually have to balance the books in Scotland. Forget trickle-down economics; it is trickle-down tragedy that I am seeing in my constituents in Livingston being pushed under by the absolute chaos at the heart of this Tory Government.
James Cartlidge
The hon. Lady was not here when I intervened on the SNP Front-Bench spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). I asked if it was true that were Scotland to be independent, its policy would be to have a currency with no lender of last resort, and he did not deny it. It is the most extraordinary proposition, exceeded in its stupidity only by the old idea of a no-fly zone over Ukraine, to be enforced at the same time as unilateral nuclear disarmament—in other words, making nuclear conflict more likely while denuding ourselves of the ability to deter it.
I turn to social care, which I care about passionately. The social care workforce do one of the toughest jobs in the country, and I never take them for granted. They care for the most vulnerable, particularly those with dementia. We all know that they are facing a difficult period, and the Chancellor of the Exchequer certainly knows that.
Last week, I was one of only two speakers on the Conservative Benches who spoke in the debate on the Bill to repeal the health and social care levy. I say to my right hon. Friend the Member for Charnwood (Edward Argar) that his predecessor as Chief Secretary to the Treasury, our right hon. Friend the Member for Croydon South (Chris Philp), said several times that, despite the repeal, there would be not a penny less for health and social care. We now know that the social care cap may be delayed, or may even not happen—I sincerely hope that that is not the case. Had I known that last week, would I have changed the way I would have voted had a Division been called? My right hon. Friend the Member for Charnwood has been a Health Minister and knows the importance of social care. He needs to reflect on the commitment given last week. I can tell him right now that I would have been sorely tempted to vote against the Bill had I known then what I know now.
The whole point of the levy was to deliver a solution to social care and to help to fund the NHS through these difficult times. It was one of the great achievements of the previous Prime Minister that, after all these years of social care Green Papers and White Papers, not taking decisions, and yes, commitments to spend with no explanation of where the money will come from—perhaps a wealth tax, although that would not get the revenue—we got a policy, and one that was credibly funded. The method of funding it was arguably not perfect, but it would have delivered a cap for those who otherwise face no limit on the costs they can incur if, for example, a loved one in their senior years has dementia. I think that our policy priority must be ensuring the dignity of our most senior citizens at the toughest time of their and their dependants’ lives.
It gives me no satisfaction to make these points about the importance of sound fiscal policy, balancing the books and having regard to future generations. That has been the core of every Conservative Government I have served in, and I know it is back at the core with our new Chancellor, who I am sure will deliver market confidence. But we all need to understand that the era of making unfunded pledges is over. That will have implications for all parties, as we will all face greater accountability, but for my grandchildren—if I ever get them—it is a good thing.
Mr Toby Perkins (Chesterfield) (Lab)
I rise to speak in support of the motion. I am glad to hear that it seems to be enjoying a lot of support, and I hope to see the Office for Budget Responsibility’s forecast published immediately after the motion is carried.
I have always opposed Tory Governments. I have long been of the view that a bad Labour Government is better than a good Tory one. I know what the Tories are about and I never expected them to do anything other than make life more difficult for the most vulnerable. In fact, if that were not the way the Tory party operated, we would never have needed to invent the Labour party in the first place. But having opposed many Conservative Governments, never before have I seen one so inept, yet so arrogant as the current Government; so damaging, yet so casual about their impact on people’s lives.
When the revisionism comes, as it undoubtedly will in the weeks and months to come, we must remember that this situation did not fall out of a clear blue sky. There was a clear mandate, because during that leadership contest the Prime Minister was clear about what she intended to do. It was Tory MPs who put her into the final two. Now we hear them say, “We must never again let the members choose the leader”, but they chose to put the right hon. Member for South West Norfolk (Elizabeth Truss) in the final two knowing full well what policies she would support. Huge revisionism is going on so that the next generation of Tory MPs will be able to say, “Oh, that was just a rogue Chancellor and a long-ago deposed Prime Minister. Forget about them—we changed after that,” but the right hon. Lady won a mandate from her party to pursue those policies.
At the time of the mini-Budget statement, some voices were expressing disquiet, but I recall the support we heard from many Tory Members. It was when I heard how happy the mini-Budget had made the right hon. Member for Wokingham (John Redwood) that I knew how bad it would be for the British people. I remember the hon. Member for Don Valley (Nick Fletcher), who was in his place a few minutes ago, claiming that the whole of Doncaster would support the mini-Budget. I have not heard him say that today. As the hawks of the right-wing press circle over the Prime Minister, let us not forget that they were the loudest cheerleaders for this mini-Budget. The day after the statement, the Daily Mail proclaimed, “At last! A true Tory Budget”. The Express was equally triumphant—“Big tax cuts to herald new era”.
Janet Daby (Lewisham East) (Lab)
Does my hon. Friend agree that the then Chancellor was carrying out what the Prime Minister had said she would do? She made sure that he lost his job, but she should be the one taking responsibility and, indeed, resigning.
Mr Perkins
I could not agree more. The right hon. Member for Spelthorne (Kwasi Kwarteng) is the first politician in history to have had to resign for doing what he said he was going to do, which was precisely what the Prime Minister said she was going to do. The mini-Budget was born of the recklessness of the previous Prime Minister having pursued so much, so confidently, with so little evidence.
Make no mistake: I will spend every day between now and a general election making sure that the people of Chesterfield know that the higher interest rates, the tax rises, the cuts to our threadbare services and even, shamefully, the prospect of disabled people on benefits and impoverished pensioners suffering further cuts to their real-terms income, are all the result of this arrogant recklessness. This did not need to happen. Yes, there are global issues, but the central banks in America and Germany did not have to bail out the pension funds. Of course we welcome the fact that the Government have undone some of the measures, although it was bizarre to hear the Chancellor say on Monday how pleased he was that Labour were supporting his plans. They were our plans a few weeks ago! Now, the Tory Government see it as a success that they are trying to put out the fire that they lit in the first place, but the damage has already been done.
The logical call for a windfall tax made by my hon. Friend the Member for Leeds West (Rachel Reeves) continues to be rejected. What objection do the Government have to asking the energy generators to contribute some of their vast excess profits to help to fund the cost of ensuring that people can stay warm this winter and enabling businesses to keep their doors open?
Paula Barker
Does my hon. Friend agree that when even the CEO of Shell is advocating a windfall tax—we truly have gone through the looking glass—it is time the Tories did the right thing?
Mr Perkins
It absolutely is. I suspect that, ultimately, they will. I am a great student of history and I can remember all the way back to January this year, when the Labour party called for a windfall tax. I remember the then Prime Minister standing at the Dispatch Box mocking us and saying that Labour always wants to raise taxes, and the then Chancellor saying the same thing. A few months later, reluctantly they had to announce precisely that. The right hon. Member for Uxbridge and South Ruislip (Boris Johnson) used to stand at the Dispatch Box criticising the policy—our policy—that he later adopted. That is how bizarre this Government’s behaviour has been. Now we have to go through the same damaging charade again. It is clear that ultimately the Government will adopt Labour’s policy of a windfall tax, but in the meantime their resistance will cost our country and our people dear.
Just a week ago, the Prime Minister was boasting that she was guaranteeing people’s energy bills for the next two years, so why were Labour only going to guarantee them for six months? Then on Monday the Chancellor comes here and says, “All right—six months.” That is how this Government are running our economy. You would not run a whelk stall like that.
Government policies change at a bewildering rate, but they do not seem to understand that it is not just that the policies are wrong; it is the clear demonstration that they do not have a clue what they are doing that is unsettling the markets. In Chesterfield, 3,352 households face a hike in their mortgage payments next year. It is quite unforgiveable. My hon. Friend the Member for Liverpool, Wavertree (Paula Barker) said that this is 2011 all over again, but that is not so. In 2011 we were coming off the back of 13 years of Labour investment in our public services, so there was a chance that our health services, our schools and our Sure Starts could withstand the cuts. Not now. Our public services cannot tolerate the sort of cuts that the Chancellor has warned might be coming our way.
The idea that this Government can restore confidence in our nation’s finances by having two more years to demonstrate the ineptitude that in the past 12 years has brought us to our present state would be laughable if it were not so serious. There is no mandate for the approach that they are now pursuing. If the Tories think that they can quietly euthanise the career of the latest Prime Minister and have another go, they are further removed from reality than even I believe they are.
We need a Government who are truly committed to growth, to a green recovery and to rebuilding our public services. We need a Government whose policies last beyond the ink drying on the growth document they have just printed. We need a Government whose plans are robust and whose leader is strong. We need a Government who are willing to lead in the national interest, and not just in the narrow interest of their party. That means we need a Labour Government led by my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer). We need that general election now.
James Wild (North West Norfolk) (Con)
Today’s inflation figures underline, once again, the very real pressures that my constituents and people across the country are facing with higher bills and the cost of living, so I welcome the action that my right hon. Friend the Chancellor has taken to change major elements of the growth plan and to settle the markets. It is only with economic stability and fiscal responsibility that we can create a platform for growth and help to protect our constituents from higher inflation and higher interest rates. The Prime Minister and the Chancellor have been candid in accepting the mistakes that were made and they have rightly apologised for them. Now we need to focus on setting out a plan that sees debt falling over the medium term while delivering growth and higher living standards.
Listening to the debate, I did not recognise much of the criticism of the previous Government’s record on growth, investment or jobs. Of course, as we have said, we want the trend growth rate to be higher, but we have also had the third highest growth rate of the G7 since 2010 and the UK continues to attract high levels of foreign direct investment, as it has throughout that period.
The Opposition’s motion makes no mention of the Government’s record on jobs—I wonder why. Perhaps it is because the latest figures show that unemployment is at its lowest level for nearly 50 years. In my North West Norfolk constituency, more than 500 people have moved from unemployment benefits into work in the past year. When I talk to employers in my constituency, I hear that the biggest challenge that they are facing is a labour shortage. Given the high number of vacancies, and the people looking for work, I endorse the great work of my local Jobcentre Plus team, who help to match people with those jobs so that they can move into the security of having a job and their own wage. Another reason that the Opposition did not refer to jobs may be that no Labour Government have left office with unemployment lower than when they came into power—my hon. Friend the Member for Broadland (Jerome Mayhew) mentioned that, but it bears repeating as often as possible.
The motion does refer to the profits of energy companies. Due to Putin’s illegal war, companies have been making exceptional profits and it is right that they should help to fund the energy price guarantee for my constituents and businesses, and other support for people, given the real cost of living pressures. Contrary to many of the contributions, however, including from the hon. Member for Chesterfield (Mr Perkins), they are doing so: over the next four years, the energy profits levy is expected to generate £26 billion of revenue—£26 billion in a windfall tax. I welcome the comments from my right hon. Friend the Chancellor earlier this week that nothing is off the table with regard to further potential steps on those excess profits, while being mindful of the need to continue to encourage investment in clean and other technologies.
As the Chancellor prepares his medium-term fiscal plan, I return to the issue that I have raised most frequently in this House since I was elected, which is familiar to my right hon. Friend the Chief Secretary to the Treasury—the need for investment in a new Queen Elizabeth Hospital in King’s Lynn. It is the most propped-up hospital in the country, with 2,500 timber and steel supports holding up the concrete cancer roof.
My right hon. Friend the Prime Minister and I, along with other hon. Friends, including my hon. Friend the Member for Broadland, have campaigned for that capital investment. Indeed, I raised it when I met the Prime Minister yesterday morning and I have pressed the case with the new Minister of State, Department of Health and Social Care, my right hon. Friend the Member for Newark (Robert Jenrick), who understands the real safety issues involved. I look forward to the new Health and Social Care Secretary visiting soon to talk to patients and staff about the impact that is having on care. Given the pressing need and the value for money of the case, I urge the Government to confirm that QEH will be one of the new hospital schemes and part of the planned capital investment programme for the new hospital programme.
Over the past decade, Conservative Governments have demonstrated their commitment to delivering economic stability, growing our economy, boosting employment and attracting investment. As we move forward, we must maintain that focus to drive growth while protecting the most vulnerable in our society.
Bambos Charalambous (Enfield, Southgate) (Lab)
It is less than a month since the former Chancellor delivered his “Let’s call it a fiscal event” Budget. The so-called mini-Budget turned out to be a full-on, unmitigated, colossal disaster. To say that that horror show of incompetence spooked investors in the financial markets would be an understatement.
The Government’s unexpected and impulsive tax cut for the richest, withheld from even senior Ministers, plus promises of more reductions to come, were breathtaking in their unfairness and recklessness. Most importantly, none of those crazy plans was costed by the Office for Budget Responsibility, which was also kept in the dark, along with most of us. The Government left a huge un-costed hole in the nation’s finances—no wonder they tipped the City into total panic.
It beggars belief that the Government did not stop to consider for just one minute the consequences of their actions on the global markets and beyond. Despite the Prime Minister’s hero worship of Margaret Thatcher, she clearly paid no heed to her aphorism, “You can’t buck the markets.” It has added insult to injury that the Prime Minister and her Government have repeatedly tried to insist that the chaos they caused has been due to global factors.
In fact, clear data provided by the Bank of England’s Deputy Governor, Sir Jon Cunliffe, shows the direct relationship between the crisis and the then Chancellor’s Commons statement on 23 September. The data shows that the cost of Government borrowing spiked in the immediate aftermath of the mini-Budget and started to come down again only after the Bank made £65 billion available to bail out the UK pensions industry. By contrast, the cost of Government borrowing in America and the EU markets remained relatively flat while Britain’s financial markets went into meltdown.
Let us be completely clear: this is a Tory crisis made in Downing Street. They created it. They own it. But it will be paid for by working people, paying higher mortgages and borrowing costs for years to come. That is the worst aspect of this mess—the very real harm it will do to real people and real lives. People’s life choices have been shredded in the blink of an eye by a kami-Kwasi Budget. An ideological fixation with failed trickle-down economics has caused the Prime Minister to wreck people’s hopes and aspirations. I have heard from young couples who are no longer able to buy their first homes, pensioners who are worried about putting the heating on, and parents who are panicking about how to make ends meet. Rents are soaring and landlords are hastily selling, which creates an even greater shortage of rented accommodation.
In my constituency of Enfield, Southgate, pollsters Survation found that in the aftermath of the mini-Budget, 60% of people are cutting back on their essential groceries and 57% are worried about not being able to pay energy bills. Approximately 11,000 people will also seek to refinance their mortgages in Enfield in 2023. They will face hundreds of pounds in increased costs thanks to the irresponsible ideology of the Prime Minister and her Government. Even now, with the new Chancellor, we are still flying blind with no OBR forecasts and being left in the dark about much of what the latest Chancellor is proposing and its impact.
Exactly a week ago at Prime Minister’s questions, the Prime Minister said that there would be “absolutely” no public spending reductions. Yet that seems to be another broken promise, with signs that every single public service is again at risk. Public services and local government are already on their knees. My constituents frequently tell me how they cannot get GP appointments for less than four weeks away and how their hospital appointments are regularly cancelled.
Not only have the ex-Chancellor and the Prime Minister trashed the economy, but they have managed to trash the UK’s international reputation. With no less than the President of the United States, Joe Biden, declaring that the mini-Budget was a “mistake” and its implosion was “predictable”, we know the damage has been done. The Government’s economic credibility has been ruined and lasting damage has been done to the economy and to our international reputation. The same set of people simply U-turning will not fix it.
The Prime Minister made much of the anti-growth coalition in her speech to her chaotic party conference. If the Government want to understand who the anti-growth coalition truly are, they need only look in the mirror. The effects of the rashness and cult-like following of failed economic dogma over the last seven weeks will be felt for many years to come by ordinary people across the country. Opposition Members will make sure that the public do not forget who caused this chaos and that the blame is placed squarely on the Prime Minister and the Government.
Paul Bristow (Peterborough) (Con)
I want to bring us back to the macro side of what we are talking about here—the big picture—because I think very few hon. Members would disagree that economic growth in itself is a good thing. Economic growth is what any Government should be looking to pursue. Economic growth creates jobs, increases livelihoods and makes us a wealthier country, so having a growth plan is in itself a good thing. However, I want to highlight three challenges that I think we will face in future.
The first challenge is low pay. This country unfortunately has too many low-productive, low-paid, low-skilled jobs and too few highly skilled, highly productive, highly paid jobs. Peterborough is really symbolic of that, and I think the Government have been trying very much to address that with the levelling-up agenda, which was the focus of the previous Prime Minister. For places such as Peterborough, levelling up will involve significant investment in R&D and in retraining. That is what this Government were trying to do that.
In Peterborough we have just built ourselves a brand-new university, and it is not just any old university; it focuses on manufacturing and engineering, really creating the environment for all those highly paid jobs of the future. Thanks to the £25 million that Peterborough has received from the levelling-up fund, we are going to build ourselves a living lab next to that university, to act as a magnet for future investment and future companies, leading to those highly paid jobs of the future. It is decisions like that that will increase the health, wealth and happiness of my city.
The second challenge we face, both as a country and as an economy, is tax. Quite frankly, I do not think tax is going to come down. Hopefully, bringing tax down is an ambition, and I confidently predict that we will be able to do so in the medium term. However, we will continue to have big spending commitments in future. We have an ageing population, and they are going to rely more on public services. I think we will also find ourselves exposed to challenges such as the cost of fuel. It is absolutely right that this Government have invested, have brought out the package and are going to reduce significantly the fuel bills that my constituents face. Fuel bills that could have been £6,500, for a typical household, will now be only £2,500. That was absolutely the right thing to do.
Paula Barker
Does the hon. Member agree with me that the £2,500 that his constituents will now be paying is not a cap? That is a sort of misnomer.
Paul Bristow
What I agree with is the fact that, were it not for this Government’s intervention, we would have seen prices of up to £6,000 for a typical household. Surely the hon. Lady welcomes the fact that in her constituency, as in mine, because of the actions of this Government, families will save themselves a great deal of money.
This Government have a strong track record on taking people out of tax. Remember that the personal allowance was of such a level in 2010, and it is now over £12,000. That is hundreds of thousands of people taken out of tax altogether, and millions of families supported. That is a good thing. The universal credit taper, reduced from 63% to 55%, has been a lifeline for constituents and families in my constituency. It makes work pay, which should be the focus when it comes to jobs and work. We want to reward those who take on extra hours, work hard and put in the effort.
The solution to tax that is higher than we would like is economic growth, because we can only make those spending commitments in the long term if we grow the economy. It is absolutely right that we have a growth strategy and that we follow it in the way that we are.
The third challenge is about positivity. Sometimes, especially when we are away from this place or when we are in our offices, we get this temptation to glance at our phones or at Twitter, and it is all doom and gloom. There is a real worry that sometimes people can scare themselves into economic difficulties. I think we need to be more positive as a country, and more positive about the long-term prospects for the UK economy.
Only last week I took the Peterborough heroes—I call them my heroes—to a reception I organised in Westminster. Many of those who came were charity workers, or people who have worked for particular businesses, charities or causes for a number of years. However, I very deliberately did not take only those people who had volunteered for their communities, as welcome and heroic as their efforts are. I also took entrepreneurs, because entrepreneurs create jobs, pay people and grow our economy, and I think it is just as worth while saying thank you and well done to them as it is to anybody else.
As has been repeated by Opposition Members, business is not the enemy. In fact, entrepreneurs and businesses are our friends in creating economic growth. I meet so many people in Peterborough, by virtue of being its Member of Parliament, who are truly heroic for taking a risk, truly heroic for having an idea, and truly heroic for employing people and doing the right thing. They are my heroes just as much as any charity worker in my constituency.
Those are the three challenges that I put to Ministers. First, we need to solve the problem of having a low-skill, low-paid economy and turn that into a high-skill, high-paid economy. Secondly, on tax, I do not think public spending is going to decrease in the near future, and we have a challenge there, but the Government have a strong track record. Thirdly, we need to be more positive and to recognise the efforts made by businessmen and women—by entrepreneurs. The foundations of the British economy are strong and we have hard-working, talented people in this country. That should all feature in a growth plan, and that is why I support this Government.
Sarah Olney (Richmond Park) (LD)
Less than four weeks ago, we were sitting here listening to the Conservatives proudly announcing their plan for growth, which amounted to nothing more than a package of unfunded tax cuts for the wealthy. We have since witnessed the pound crash to a record low against the dollar, a run on pension funds and a crisis in the mortgage market. Now we are back here, but this time we are significantly poorer and with no plan for growth. The only growth that millions of struggling families and pensioners will experience as a result of the mini-Budget is in the increased price they will pay at the checkouts and in their monthly mortgage bills.
Now, the Conservatives are proposing cuts that will break our public services and deliver further pain to millions of people across the country. It was good to hear the Prime Minister commit to increasing pensions in line with inflation at Prime Minister’s questions earlier today, but I note that this does contradict what the other Prime Minister—the Chancellor of the Exchequer—said on Monday. I note that the hon. Member for Broadland (Jerome Mayhew), who is sadly no longer in this place, said how outrageous it is that a few Liberal Democrats in Norfolk cannot decide on a road, but I think that is pretty ironic under the circumstances.
What we need to hear now is that benefits are going to be increased in line with inflation. The news that these could also be undercut is the latest Conservative betrayal of the most vulnerable in society. These cuts were not inevitable, as the Chancellor may like us to believe; they are the result of choices made by this Conservative Government—choices that have trashed the UK’s financial credibility and added billions to the cost of Government borrowing. Meanwhile, the Government refuse to tax the eye-watering excess profits of oil and gas companies, which could bring in up to £60 billion more to the public finances.
It is not just households and international markets that have lost faith in the Conservative Government; business confidence across the UK is also falling at an alarming rate after already tough market conditions were made worse by the botched mini-Budget. Small businesses are the engine of our economy, and business owners need a Government they can trust to deliver for them and support their recovery from the pandemic. But now businesses are facing higher borrowing and refinancing costs due to market volatility, at a time when SME debt has reached a staggering £204 billion. This leaves thousands of businesses at risk of going bust.
A real plan for growth is needed to secure future prosperity. The IMF recently downgraded the UK’s growth forecast for 2023 to 0.3%, and the outlook from the OECD is even bleaker, predicting complete stagnation. A Liberal Democrat plan would focus on tackling chronic labour and skills shortages, by investing in our young people and delivering higher wages. We would also drive green investment and focus on rebuilding trade after Brexit, which is a major barrier to economic growth. According to the OBR, the UK has become a less trade-intensive economy, and trade as a share of our GDP has fallen by around 12% since 2019, which is two and a half times more than any other country in the G7.
Global economic conditions are tough, but domestic conditions have been exacerbated by Conservative chaos. This economic crisis is a self-inflicted national humiliation that has put markets in the driving seat of UK fiscal policy. The UK is the only country in the G7 that has had to reverse policy that was enacted just three and a half weeks ago, and the only country where the central bank has had to step in to stabilise the economy and secure people’s pensions.
After weeks of denial, the Prime Minister has finally accepted responsibility for the economic pain of the mini-Budget, but after years of Conservative chaos, culminating in four different Chancellors in the past four months, the Conservatives have lost all financial credibility and their time is up. The new Chancellor may like us to believe that he can wipe the slate clean by tearing up the plans of his colleagues, but the damage has already been done by the Conservatives, and millions of families and pensioners will suffer from the increased cost of living and reduced public services as a result.
Nobody has voted for this new economic strategy, and this Government no longer have the legitimacy or mandate to push it through. The public must be given the opportunity to decide what they are willing to accept. It is time for people to have their say in a general election.
Tahir Ali (Birmingham, Hall Green) (Lab)
Let me go back 12 years, to the start of 12 consecutive years of reckless Tory Government. Twelve years—consider that. It is an incredible, or rather a depressing, amount of time. What have they done with their time in charge? They have cut our public services, slashed our essential infrastructure and decimated our communities. They originally asked us to do that in the name of austerity, and said that we must all tighten our belts and pinch our pennies so that their rich mates could be bailed out. We paid for the mistakes of their friends in the financial sector at great cost, and now we see it all happening again. The Government’s economic plan has backfired on us all, sending the economy into freefall, and once again, they are asking people to pick up the tab.
Inflation is sky high at 10.1%, and set to rise. Energy prices are through the roof. Rents are rising across the country, and property prices are unsustainable. Wages have been kept low, and benefits have been cut. People are struggling, and they are scared. Are they right to be worried? I am worried too. There is simply no way that people can thrive in these circumstances. In my constituency of Birmingham, Hall Green, we see the worst of Tory failures. Child poverty is at a staggering high of 52.9%, and for every 100,000 children in Birmingham, 4,500 require assistance from food banks to ensure that they are fed. Almost 10% of families in Birmingham, Hall Green receive support from universal credit, while Birmingham suffers from an unemployment rate of 11.4%. Average annual take-home salaries sit at just under £21,000. Those figures fall far short of national averages, and it is clear that enough is enough.
The cause of these problems is clear: the cost of living is too high. This is a Tory-made crisis, made in Downing Street, but paid for by ordinary working people. Wages are low, and too much of our meagre pay cheques goes to pay the dividends and bonuses of big energy barons and the exorbitant rents of private landlords. Too much of our national infrastructure, such as the post and rail services, has been put into the hands of careless private owners who under-invest and push wages down—I know that all too well as a proud member of the Communication Workers Union who once worked for Royal Mail. Meanwhile, Royal Mail Group’s profits have risen to £758 million. Do they take us for fools? Do they think we will not notice that blatant rip-off of hard-working people? How is that just, how is it fair? Yet that is what workers face across the country. It is clear that this is not just an economic crisis; this is a moral crisis and a crisis of greed. The resources that we built together—the homes, the infrastructure, the profits—are being sold off for the benefit of the rich. The fruits of our collective labour are going to the select few, which the Tories are only too happy to accommodate.
Dear, oh dear—where have we heard that before? Not so long ago it was mentioned when the Prime Minister went to see His Majesty the King. The economic mismanagement that we have seen play out in front of our eyes over the past few weeks has been nothing short of astounding. The disastrous mini-Budget pushed by the Prime Minister brought the country to the brink of collapse and left her leadership in tatters. Even with the U-turns, we are left with a Government who are clueless, out of touch, and intent on running our country into the ground. However, with all the U-turns and cock-ups there is a risk that we lose sight of the fundamental problems facing millions of people across the country—problems for which this Government still have no solutions.
The new Chancellor may have bought back an ounce of credibility for this failing Government, but he does so at the expense of working people across the country. His agenda is clear: bankers get to keep their huge bonuses, while the support for people facing unprecedented energy bills is to be scaled back. No tax cuts, but the promise of yet another round of austerity that will hit the poorest the hardest. No announcement on whether universal credit will rise in line with inflation; no solution to low growth and low wages. The mini-Budget may have gone, but we are all left with the same old Tories and the dismal future they offer.
Janet Daby (Lewisham East) (Lab)
We have had more than 12 years of a failing Conservative Government, and I will outline some of those failures. There has been a drastic rise in food bank dependency, and the Government appear to think that is acceptable and should continue to exist in our society. I say no, that should not happen, and I know Labour Members agree with that. Child poverty is very prevalent. Children in my constituency are going hungry, some both in the mornings and at lunchtime because their parents do not have enough money to feed them breakfast and give them lunch. Universal credit does not go far enough, and the very least the Government could do is ensure that it increases in line with inflation. The Government have carried out cut after cut to our public services. Those cuts affect the quality of people’s lives every day, because services are no longer in existence, and charities do not have the support they need to carry out those vital services.
While the roll-out of the vaccine is to be commended—let me say again how great the NHS was in rolling out that vaccine, as it continues to do, and acknowledge our key workers—even under the previous Prime Minister the economy was mismanaged. Many self-employed people were left to fend for themselves during the pandemic, and millions, even billions of pounds were written off by the Government. The UK has recovered more slowly than any other G7 country.
For the recent Prime Minister and her Government it is even harder to know where to begin. In light of what is happening globally, the mini-Budget was supposed to help, but instead it was an act of economic self-sabotage. How on earth did the Prime Minister and her then Chancellor fail to see that large unfunded tax cuts would not work? What we saw was high inflation, the devaluing of the pound, pension funds plummeting and mortgage rates being hiked.
The consequences of the crisis were made entirely in Downing Street. In years to come, the cost will be paid by millions of working people. The Prime Minister and the Chancellor have now admitted that the mini Budget caused mortgage rates to go up and borrowing costs to surge. Nearly 10,000 households in the borough of Lewisham will face higher mortgage rates in 2023, and the situation for renters is no better.
Earlier this week, I raised the case of my constituent who was forced to leave an abusive marriage. She works and has children, and she could barely afford her private rent. She was already on universal credit. To make matters worse, her rent recently increased by £300. She simply cannot afford that. Other constituents are experiencing similar things. One shares a house and has since seen their rent rise by £600. They, too, cannot afford that. Are the Government saying that it is okay for people to fall into debt and that the everyday person has to accept the situation? It is not right.
Many parents across the country are struggling to feed their children. In fact, 26% of households with children have experienced food insecurity in the past month. Instead of the Government focusing their efforts on helping struggling families, they have lifted the cap on bankers’ bonuses. How can the Conservatives say that theirs is a party of fiscal responsibility when they hold the management of the economy in scant regard?
The Government have seen four Chancellors in the last 107 days. They need to stand aside. Labour will restore financial responsibility for the country with a serious plan for growth that puts people first. The next Labour Government will establish a great British energy company, because we are committed to lowering bills, protecting the environment and creating jobs. Labour will also introduce a new deal to boost job security, promote fairer pay and tackle the gender and ethnic minority pay gaps. The price of the Tory Government is already far too high to pay.
The Prime Minister says that she is a democrat. If she is, it is vital that we have a general election now.
Geraint Davies (Swansea West) (Lab/Co-op)
The mini Budget has obviously been a complete disaster and catastrophe, and that is what the motion is about. There was the unfunded tax cuts for the rich—whether the 45p rate, bankers’ bonuses or corporation tax—and letting the fossil fuel companies with their excess profits off the hook. It was unfair and unforecasted, and it led to sterling going down, mortgages going up and debt costs going up—a complete disaster. When the Chancellor stands at the Dispatch Box and says, “Okay, it was all a mistake. We will reverse it. Don’t worry, we’ll grow the economy,” that is completely ludicrous.
It is possible to grow the economy. Labour grew the economy by 40% in the 10 years to 2008 and used that to double investment in the health service and education and to lift a million children out of poverty and a million pensioners out of poverty. What have we seen in the last 12 years, since 2010? To start with, we had George Osborne’s austerity, where he said that he would sack half a million public servants. The response of the market was that consumer demand went down. We have also not seen any growth or any increases in pay, so the country and the economy had no resilience for the pandemic, wars or outside shocks.
The truth is, as the Institute for Fiscal Studies said, had the trend rate of growth under Labour continued up to the pandemic, average wages in Britain would have been £10,000 higher, so people would have been stronger to take on the shocks that we have all suffered. That is because of the Tories. It was not all right before the mini Budget—it was already a disaster—and now this is a complete crisis caused by the Tories.
Under Labour, in 2010, 26,000 people were using food banks. By 2021, the figure was 2.6 million—100 times the level—and now it is far worse. One in four children, and one in five households, are now in food poverty. What are the Government doing about it? Very little.
In Wales, where there is a Labour Government, we have free breakfasts in schools and free lunches for which anyone can sign up, because we recognise, as Winston Churchill did, that the health of the nation is its most important asset and keeping people fed is critical. On Monday, the Financial Times said that for every £1 invested in the NHS, we get £4 back in growth. When I put that to the Chancellor, he completely misunderstood the point and started talking about tech businesses or something. This is about having a healthy nation that can work and proper jobs in the NHS.
In 2014, in a massive study of many countries, the OECD found a direct relationship between inequality and growth: namely, where there is less inequality, there is higher growth. So if the country wants higher growth, why did we have a mini-Budget that was all about giving the super-rich more money and clobbering the poor? Why index benefits to wages instead of prices, which are rocketing? It is completely inept, completely unfair and completely immoral, and it is going on and on.
The Government talk about productivity. We know from the Office for National Statistics that we would increase productivity if we had more people working online—in particular, older people with caring responsibilities who want a more flexible work-life balance—but we have a Secretary of State at the Department for Business, Energy and Industrial Strategy who, as I understand it, does not even have a computer and pooh-poohs the idea. He thinks, “You can’t be working if you’re at home.” It is completely inept.
We should have equal wi-fi offered to everyone by providing wi-fi clouds in towns and on all our trains. When I commute back to Swansea, we are just wasting hours because there is no proper wi-fi. That is because it is not a public service and the private provider cannot be bothered to put it in. It is completely ridiculous.
We know that austerity, which it has been promised that we will go back to, produced 300,000 excess deaths. We know that trade is down, largely because of a cocked-up Brexit. We know that Conservative MPs voted for the current Prime Minister, who endorsed the mini-Budget that has created an even worse catastrophe. We know that Tory MPs did not support the Chancellor, who is now getting us back to square one. The only reason why we have a certain stability in market confidence is because of knowledge from the polls that there is some prospect of a Labour Government in two years who will put us back on track. What we should do morally, economically and politically is give the people a choice—give them a general election now—so that we can sort out the economy and give power to a party that can and has delivered growth and which will deliver a better, stronger, fairer, greener Britain, and kick this lot out.
Matt Rodda (Reading East) (Lab)
It is a pleasure to follow my hon. Friend the Member for Swansea West (Geraint Davies). I speak in support of the points made by the shadow Chancellor and a number of hon. Members from across the House. I will cover three brief points in the time available: reflect on the seriousness of the crisis of the past few weeks, which is unprecedented; consider the serious effects on families and pensioners across the country; and consider the pressing and serious problems facing businesses, whether large or small.
To put the last few weeks into some sort of context, this truly is a crisis made in Downing Street and one that is absolutely dreadful for the country on so many levels. I am utterly staggered that a Prime Minister and Chancellor could have taken those steps, and I cannot understand why they made such serious mistakes.
The unfunded, reckless tax cuts, leading to significant increases in mortgage costs and other business costs, are absolutely dreadful for the whole country. My feelings after these weeks, and at certain points during the journey that we have been on—the zig-zag of U-turns and mismanagement—is one of disbelief. I am sick and tired of waking up to the “Today” programme telling me of some dramatic change in Government policy leading to awful effects on the country. I am also fed up with the evening news reporting on the latest rumours and difficulties facing the Government. I would like to see a period of stability, as I think we all would. Certainly, our businesses would, and families and pensioners would.
Moreover, this deeply saddens me, because the Government’s inept mismanagement has deeply damaged the country’s long-held reputation. It is dreadful that the then Chancellor was at the IMF in Washington at the very time when senior figures in the organisation were criticising British policy. We had the completely unprecedented experience of the US President commenting on UK economic policy and mismanagement by the Government, and the former Governor of the Bank of England criticising Government policy.
I wish to move on from all that but, in the time I have, I will draw Members’ attention to the very real effects on working people who will now be paying the cost of this very serious crisis for months and years to come. I want to explain some of the work I have been doing in my constituency, which covers Reading and Woodley, and the visits I have made to local centres to see the effects for myself and to see quite how awful it has been.
I am lucky to represent a relatively prosperous area in south-east England, but we have serious poverty which is being made dramatically worse. We have a large number of families and pensioners who are struggling and who are very concerned about mortgage and rental costs. I visited the Weller Centre in the last few days, which is a wonderful community centre in Caversham in my constituency. Amazing work is being done there to support people on so many different levels by a charity. It was worrying to see how many people are now having to rely on food banks. That has been a constant for some time, but it is getting much, much worse. In addition, to make things worse still, fewer supplies are now being donated because of the pressures on the retailers and households who have generously donated. As a result, the community fridge at the centre is not as full as it was. The boxes of fruit, vegetables, other produce and dry goods are not as full as they were and there are real impacts on people in desperate need. The centre is trying to provide cheap, hot food to pensioners—often things like baked potatoes and basic food—to help them to make ends meet. It also offers a warm bank.
All that is to be commended, but that scale of support would not be needed were it not for the Government’s mismanagement. In Reading and Woodley town centres, and in other local centres across the constituency, we can see very clearly the effects of the Government’s mismanagement. Other colleagues have mentioned them, too. There are empty shops and business units because of the effects of that mismanagement. My area is a regional hub for business and shopping in the central belt of southern England, so it is disturbing to see that level of empty property.
I strongly suspect that many small businesses—I have had businesses contact me—are having real worries about their energy bills. They are also concerned about the rising price of borrowing and other business costs. They are putting off vital investment and other vital decisions because of the Government’s mismanagement, and that has a real effect on employment and business growth across the country. It shows the scale of the Government’s mistakes.
I found some solace—it is a salutary warning to Ministers—in the fact that business leaders are increasingly looking to the Labour party for leadership and to what I hope will be an incoming Labour Government in the not-too-distant future. I thought it particularly interesting that the CEO of Tesco praised Labour’s economic plan. In fact, I think he said that only Labour had an economic plan to take us out of current difficulties.
To conclude, we have seen today that the Government have made serious mistakes that working people will be paying for, for months and years to come. There needs to be a completely new approach. We need, ultimately, a new Government to take things forward for this country.
Sam Tarry (Ilford South) (Lab)
It is a pleasure to follow my hon. Friend the Member for Reading East (Matt Rodda).
Last month, the Government engaged in one of the worst acts of economic self-destruction in living memory. Overnight they plunged the pound to historic lows, mortgage interest rates skyrocketed out of control and six major pension funds faced total collapse. In just five weeks, they have imploded the economy, destroyed our global reputation further and thrown countless more families into debt and destitution. One former US Treasury Secretary even described it as one of the worst macroeconomic decisions ever taken, suggesting that
“The U.K. is behaving a bit like an emerging market turning itself into a submerging market.”
Research by the New Economics Foundation found that the trickle-down Budget pushed the income of the poorest 10% a further £900 under the cost of basic living supplies, while boosting the incomes of the richest by £5,000 above cost; a move totally divorced from reality. Now, with the damage already done, they have announced an embarrassing set of U-turns. They are already signalling a return to the savage and failed policies of austerity, which will decimate our infrastructure and public services, and make working people poorer the length and breadth of Britain.
Despite all that, the Prime Minister and the former Chancellor were right about one thing: the economic policies of the past decade have utterly failed to address the biggest challenges faced in our society. Indeed, successive Tory Governments have overseen the worst growth in GDP per head since records began. According to figures by the ONS, the UK is the only G7 economy yet to recover to above its pre-pandemic levels. That is 12 years of stagnant wages that have resulted in what the TUC referred to as the worst pay crisis “since Napoleonic times,” with real incomes still well below 2010 levels at the time of the outgoing Labour Government.
UK inflation is on course to rise to its highest peak in half a century and 45 million people are about to be plunged into full poverty. Many will struggle to put food on the table and keep the lights on this winter. Low-income households will see the gap between income and the cost of living increase by 40% next April, with three in four households unable to cover rising costs. People in Ilford have borne the brunt of this economic crisis. My inbox this week was full of desperate cries for help from constituents who have no idea how they are going to make it through another grim winter, with so many forced into debt and further below the poverty line.
The Chancellor’s attempt to mend the damage done by his predecessor is nothing more than a return to the age of austerity that damaged our economy so deeply, instead of the strategic long-term investment that is so badly needed in the UK. Yet again, a Tory Chancellor has warned that “more difficult decisions” are yet to come to cope with the economic crisis that his own party has inflicted on the country. His new advisory panel is entirely made up of members of the financial sector, including former Chancellor George Osborne’s chief of staff, now a member of Blackrock, the designers of the LDI—liability driven investment—schemes that very nearly imploded the economy two weeks ago, as well as a representative from J.P. Morgan. That is hardly reflective of the needs and wants of the wider public. Where are the representatives of the rest of the economy, the TUC or the low-paid workers set to be hit the hardest?
The Chancellor has unsurprisingly already told us that cuts to vital services are seemingly inevitable. Again, it looks like working people up and down the country are going to be asked to tighten their belts even further. Why do these “tough decisions” always seem to fall on working class people, when so many at the top have never had things so good? Indeed, energy giants are set to make up to £170 billion in excess profits during this crisis, while ordinary households struggle to pay the bills, and we may well be heading towards rolling blackouts. CEOs are now collecting an average of 109 times the pay of ordinary workers, with chief execs of the UK’s 100 biggest companies seeing their pay increase by a staggering 39%, well above pre-pandemic levels. Isn’t it about time that the very richest and their oligarch allies, who got us in this mess in the first place, shoulder some of the burden?
Getting more cash in the hands of everyday people would lead to exactly the kind of high growth that the Government claim to want, with far better health and education outcomes as a result. Wages must rise, at the very least, in line with inflation across the board, and those bearing the brunt of the cost of living crisis need a pandemic-style bail-out for their energy bills. The IMF has suggested that it would cost about £30 billion to compensate the poorest 40% of households for price rises this year—still a fraction of furlough costs and £10 billion less then Shell and BP made in profit last year alone.
The energy giants will continue to raise their mark-ups as long as they are allowed to do so, and they cannot be trusted to keep bills at affordable levels. It is high time that they are replaced by a single publicly owned energy company, run by workers and held to account by consumers. We need a genuinely transformative green new deal, working hand in hand with a coherent, progressive industrial strategy to rebalance the economy away from the City of London and create millions of high-skilled, well-paid, unionised jobs—forging a greener, more just society and putting Britain at the heart of the fight internationally against climate change.
Beth Winter (Cynon Valley) (Lab)
I rise to speak in favour of the motion tabled by my hon. Friend the Member for Leeds West (Rachel Reeves). As others have outlined, interest rates are rising while inflation is now in excess of 10%. Mortgages and rents are increasing as real incomes fall. Twelve years of austerity and the cost of living crisis are making life a misery for people in my communities.
On top of that, the mini-Budget of the Chancellor’s predecessor has created long-term damage to the economy. Despite substantial U-turns in policy, energy producers and other monopolies continue to make huge windfall profits. There remains economic chaos, which the Government are struggling to control, but that chaos is because the Conservatives defend their and their allies’ incomes and their class interests. The mini-Budget that caused such chaos was a huge ideological experiment in tax handouts to the wealthy. That is why I support the motion and, in particular, believe that the economy must work for every single person in every part of the United Kingdom.
The people of my Cynon Valley constituency and the people in Wales are going through a cost of living emergency. When I surveyed people in Cynon Valley, I found that nearly 90% of them felt worse off than they did 12 months previously; more than two thirds said that they will significantly cut down on heating; almost half said that they would not put the heating on at all; and the vast majority said that the situation was having a detrimental impact on their mental health.
Behind those statistics are real people. Let me quote a couple of my constituents. One said:
“Life genuinely doesn’t feel worth living any more. I feel guilty for bringing my children into this awful mess of a world.”
Another, a disabled person, said:
“I have no idea what I’m going to do—
this—
winter, something has to give.”
Those are harrowing comments by constituents. That is the real-life impact of the cost of living emergency.
The Chancellor is not interested in working on behalf of my constituents and 99% of the people living in this country. He has been clear that he is going to pursue yet another ideological austerity agenda. Cutting public spending is an attack on the living standards of working-class people.
The people of Wales deserve better. We deserve fair funding and a needs-based funding formula. I commend the First Minister of Wales, Mark Drakeford, who yesterday passionately and rightly condemned Conservative cuts to the NHS in Wales. He has also made clear his backing and support for an inflation-proofed pay rise for public sector workers. Westminster—the Treasury—needs to ensure fair funding for Wales and not force my constituents further into poverty.
The cost of living crisis is undoubtedly a political choice made by successive Conservative Governments here in Westminster. It is clear that the public cannot afford for this Conservative Government to remain in office, and as others said, we are ready for an election at any time. Right now, however, we also need urgent action to better distribute the enormous wealth in this country; we are the fifth richest nation in the world. To do that, we must also change the balance of power from the few to the many. We need to see an inflation-proofed rise in income. I still think that the Tory party’s position on pensions is at best unclear or confusing. Social security is now under threat from the Chancellor, who has refused to back a rise at today’s inflation rate, and we need to see inflation-proofed increases in pay. We also need to see a shift in the burden of taxation to those who can afford it: the wealthy, the banks, the monopolies making millions and billions in profit.
The TUC congress is meeting this week. Yesterday, it agreed that it must
“organise coordinated action over pay and terms and conditions…with all TUC unions”.
I support that resolution, and yesterday I tabled an early-day motion about it.
The people in Cynon Valley, in Wales and throughout the United Kingdom cannot and will not tolerate a further period of austerity based on unacceptable economic theories. We are mobilising to defeat the Tory agenda. Trade unions, local authorities, communities and constituents up and down the country are coming together in unity to campaign and care for one another. There is a better way. In this economic chaos, the Conservatives will continue to defend their own incomes and interests. Now we will defend ours. Diolch yn fawr.
Mr Pat McFadden (Wolverhampton South East) (Lab)
I am pleased to conclude the debate on behalf of the Opposition. I welcome the new Chief Secretary to the Treasury to his position. His colleague the Exchequer Secretary is an old-timer: she has been in post for six weeks. No doubt she is sitting at the Treasury talking about the old times back in September.
I thank all right hon. and hon. Members who have contributed to the debate. We have heard many powerful speeches about the impact of inflation and rising energy costs, the pressures on business, the UK’s international reputation and the impact of rising mortgage rates. If you will forgive me, however, Mr Deputy Speaker, I want to single out the speech of the hon. Member for Hazel Grove (Mr Wragg), who not only spoke about his own health issues, but added his voice to those of Conservative Members calling for the Prime Minister to go.
This country has been through very significant economic damage in recent weeks: a run on the pound, a spike in gilt yields that has increased the cost of Government borrowing, emergency interventions from the Bank of England to prop up the country’s pension system, and a spike in mortgage rates that will add to the household costs of millions of people to years to come. All of it has been self-inflicted—not an act of God, not the result of global conditions, but the result of using the country for an ideological experiment. To deal with the argument that the Financial Secretary made at the beginning of the debate—essentially, that this is all global—I will quote from a letter from the Bank of England to the Treasury Committee. If any Conservative Member wants to intervene to say that any of it is wrong, they can be my guest.
Immediately after the mini-Budget, there were two days with the biggest daily rises in gilt yields in 20 years. Over four days, the rise was twice as large as the biggest rise since 2000. The Bank of England says that
“the scale and speed of repricing…far exceeded historical moves”.
Following the mini-Budget, gilts moved more in one day than in 23 of the past 27 years. No such moves happened in gilts in dollars, euros or other major currencies. There were global factors before the mini-Budget, but as my hon. Friend the Member for Chesterfield (Mr Perkins) said, the global context was a reason not to act in such a rash manner, not a reason to behave with all the restraint of a couple of trigger-happy pyromaniacs.
This crisis was not born of global conditions, but made in Downing Street. It has destroyed the Conservative party’s claims to be the party of economic competence and of sound money. The real-life impact of what the Government have done has been to place a Tory risk premium on the country’s borrowing costs and a Tory premium on people’s mortgage rates.
James Cartlidge
I asked the shadow Chancellor earlier whether it was correct that Labour’s intervention in energy support would be almost primarily funded by borrowing despite its pledges on the windfall tax. Is that correct?
Mr McFadden
We have never argued that there was no need for borrowing. The point we made was that much more of this could be funded by a windfall tax. If the hon. Gentleman thinks that that is some sort of revelation, I can only ask him where he has been living for the last few months.
The Prime Minister and the Chancellor of September behaved like student pamphleteers. When the Prime Minister stood up at her conference and attacked
“vested interests dressed up as think tanks”,
it was an announcement worthy of the gold medal for lack of self-awareness, for never has there been a Government more symbolic of the failure of think-tanks on influential thinking than the one that she leads.
The Prime Minister and her ideological soulmate got the keys to the Treasury Ferrari, took it for a joyride and then crashed it into a ditch. Now, belatedly, by commissioning the OBR report and singing the praises of an independent Bank of England after spending all the summer undermining it, they have signed themselves up for the speed awareness course; but it is too late, because people will continue to pay the price of what they have done.
We have now had two fiscal events with no report from the OBR. This was not just about what was done, but about how it was done. The whole country is paying a price for the Conservative party’s contempt for the institutions that safeguard our economic credibility. And where does it all leave the Prime Minister? The mini-Budget was not a surprise to her; it was not imposed on her; she was 100% its co-author. It embodied her beliefs, her world view, the central core of the campaign on which she fought and won the leadership contest. Now everything she believes in has had to be burned in front of her to try to keep this zombie Government carrying on. This is not a case of “too far, too fast”, as she has claimed, or of a minor policy U-turn. It is a repudiation of everything that she stands for. It is a total and utter reversal.
The one surviving policy that the Prime Minister keeps praying in aid, the energy price guarantee, is the one policy that she campaigned against throughout her leadership campaign, saying that she was opposed to handouts. The question now is, what is her premiership for? Is it for the policies that she really believes in—those in the mini-Budget, now rejected and lying in ashes—or is it for the revenge of the orthodoxy that she so disdains? Each dose of the medicine she takes entails embracing that which she has so publicly rejected. Her argument, in effect, is “Please keep me here so that I can be what I am not.”
Mr Perkins
Is not the truth that what the Prime Minister’s leadership is for is for the moment? She is here for a very short period, until the Tories can find an excuse to get rid of her.
Mr McFadden
My hon. Friend is right. In fact, the only discussion on the Conservative Benches is about how to do precisely that.
We cannot believe anything the Prime Minister says. Only seven days ago, she stood at that Dispatch Box and promised there would be “absolutely” no spending cuts.
Five days later, the new Chancellor—October’s Chancellor—told us that the cuts had to be eye-watering. Conservative Members know that this is an impossible basis for leadership, and that it leaves the Prime Minister in an untenable position. They are remembering the words of the song that was played at their party conference as she came on to the stage:
“You've done me wrong, your time is up…there's no way back…you’re movin' on out”.
Three cheers for M People: not just a great band, but one with the political foresight of Nostradamus.
Now the new Chancellor has been sent down from the mountain, come among us, as he says, to restore confidence and stability—but who destroyed confidence in the UK? Who created the instability? Who fashioned the Tory risk premium? I am too polite to call it what they are calling it in the City, which is “the moron premium”. It was the new Chancellor’s own Government.
Let us be clear: no one was talking about spending cuts before the mini-Budget of 23 September, so the cuts are a result of what the Government have done. There has been no emergency central bank intervention to rescue pensions in the United States, Germany or France. The global circumstances that the Government refer to were the reason not to take such reckless risks with the public finances.
I have noticed one thing about the new Chancellor, though: he is not pretending that it is year zero. He is owning the record—all 12 years of it—and he now wants to implement a version of what was done after 2010. We have gone from an economic policy of having to borrow from communities such as mine in Wolverhampton South East to fund a tax cut for people earning over £150,000 to a policy of those communities having to pay for the chaos caused by the first policy.
We can see what the plan is. Having crashed the economy and brought a new dimension of pity, bemusement and risk to the term “global Britain”, the Government now want the acid test to be support for their public expenditure cuts. They have already made people pay once for their mismanagement through higher mortgage rates. Now they want to make people pay twice through cuts to public services. It is the ultimate in governmental arrogance. They get to mess up the country through a giant ideological experiment and then ask everyone else to pay the price. That is not a political virility test; it is a candid admission of failure.
The roots of that failure lie not just in one or two policy errors but in something deeper. They lie in the triumph of ideology over evidence. They lie in the view that all that is needed is blind faith—the test that someone is a true believer—and the view that anyone who questions or points out inconvenient truths is a doom-monger, part of the blob, and not a proper patriot. That destructive ideology has done great harm to our politics. It has reduced the Conservative party to its current abject state, and has served as the rationale for attacking one institution after another.
Politics begins with wanting to change the world, but what have this Conservative Government been reduced to? Attacking tofu. What other forms of food will now be lined up in the culture war that is all that is left for them? The disaster of the past few months should result not just in a few policy U-turns, but in turning away from the politics that drove those decisions and has done such harm to the country. This country has great strengths: world-leading services, great high-value manufacturing, creative industries with global reach, some of the best universities in the world, and a fantastic workforce. It deserves much better than this Conservative Government.
The Chief Secretary to the Treasury (Edward Argar)
I think I last stood at this Dispatch Box about three months ago, so it is a privilege to close this debate on behalf of the Government. I welcome the kind words from the shadow Chief Secretary, the right hon. Member for Wolverhampton South East (Mr McFadden). I suspect, knowing him as I do, that he will be tough in his challenges, with, as we have seen, a suitably dry delivery and sense of humour, but I have huge respect for him, as he knows. I have yet to be treated to his singing voice—sadly, we were not just then—but on a future occasion he might be tempted.
I thank all hon. and right hon. Members for their contributions. The debate has understandably invited the expression of strong views on the part of all Members who have spoken. That is because economic stability is not just about abstract numbers and graphs. As the shadow Chief Secretary knows, I am nothing if not a pragmatist. This is about our constituents, our families, our friends and our neighbours, and it matters. As the Chancellor set out to the House on Monday:
“Behind the decisions we take and the issues on which we vote are jobs that families depend on, mortgages that have to be paid, savings for pensioners, and businesses investing for the future.”—[Official Report, 17 October 2022; Vol. 720, c. 395.]
Sometimes those decisions are difficult or, indeed, very difficult, as the Chancellor acknowledged. We know we need to do more to give certainty to the markets about our fiscal plans, and we have. I am clear, as is my right hon. Friend the Chancellor and, indeed, the Prime Minister, that we need to prioritise the needs of the most vulnerable, and we will.
We also know that the long-term economic wellbeing of this country relies on our achieving sustainable growth. In the coming weeks and months, responsibly and sustainably, we will continue that urgent mission. Indeed, the reason the United Kingdom has always succeeded is that, at big and difficult moments, we have taken tough decisions in the long-term interest of the country. When conditions allow, when it is consistent with sound public finances, we will seek to cut taxes to support further economic growth.
I remind the House that, since 2010, the United Kingdom has seen the third highest real GDP growth rate in the G7, increasing by more than Germany, France, Japan and Italy. The UK is forecast to be the fastest growing economy in the G7 in 2022. We have a strong labour market with the lowest unemployment rate in almost 50 years, which gives genuine grounds for optimism about our long-term prospects for growth.
Simon Hoare (North Dorset) (Con)
I warmly welcome my right hon. Friend to his place. He has used the word “pragmatism.” The shadow Chief Secretary to the Treasury was on the money with regard to the folly of applying ideology when the circumstances do not allow it. Will my right hon. Friend, from the Dispatch Box, give both the country and the House confidence that good, old-fashioned Tory pragmatism and common sense—people can call it Treasury orthodoxy if they wish—are back at the helm?
Edward Argar
I have just set out where we are and what the Prime Minister and the Chancellor have said about the approach we are adopting. It is my firm belief, and the Chancellor’s firm belief, that we wish to be a tax-cutting Government, but that must be done from a basis of sustainability. When taxes are cut sustainably, we see behaviours change that help to generate investment and growth, which is what the Prime Minister and the Chancellor seek.
Edward Argar
I will make some progress on the contributions made by hon. and right hon. Members. I will address the right hon. Gentleman’s contribution, and he may then want to come back to me.
The concerns expressed by the SNP spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), about economic turmoil are a little rich, given that his party seeks to impose the chaos, turmoil and economic cost of another referendum on Scotland, being unable to accept the democratic decision of the Scottish people in the last referendum.
On the most vulnerable, I highlight to the hon. Gentleman and, indeed, other hon. and right hon. Members the £37 billion of support that has been made available across the United Kingdom to support people with the cost of living. The SNP’s prospectus, set out a few days ago, on what independence would mean is a recipe for chaos and turmoil for the people of Scotland.
I am extremely pleased to see my hon. Friend the Member for Hazel Grove (Mr Wragg) in his place. I pay tribute to his courage in speaking out so openly about his own challenges and, in so doing, doing a huge service to many people up and down this country. He is a man of great integrity and great courage, and I pay tribute to him. Although I do not always agree with him, this Chamber is always wise to listen to him. He represents his constituents passionately and well in this place. He touched on a number of things, but he specifically mentioned institutions—as did the shadow Chief Secretary to the Treasury—including the Bank of England and the OBR. My hon. Friend knows me well and he knows that I have huge respect for both those bodies. Before I knew I would be occupying this place and that the right hon. Member for Wolverhampton South East would be my shadow, he and I were on television and I paid tribute to him for his role in a previous Labour Government for setting up the independence of the Bank of England, which I believe is important and needs to be respected.
The right hon. Member for East Ham (Sir Stephen Timms) is a distinguished former Chief Secretary to the Treasury and he highlighted a number of things, particularly the benefits question and the uprating of benefits, as did the hon. Member for Richmond Park (Sarah Olney). They will know that there is an annual process by which that is done. That process requires the statistics that were made available for the first time today—the September statistics. It is extremely important that that process is followed and I do not intend from the Dispatch Box to pre-empt a process that should be followed properly.
I listened carefully, as I always do, to the comments made by my hon. Friend the Member for St Austell and Newquay (Steve Double). He raised a particular point about stamp duty land tax thresholds and second homes. The increase in the SDLT threshold implemented on 23 September will remain, supporting first-time buyers and making home ownership more accessible. No one purchasing a second home or buy-to-let property will be taken out of paying SDLT entirely following the Government’s changes. The higher rate for additional dwellings introduced by the Government in April 2016 will continue to apply at 3% above the standard rate. I know that the Chancellor will have listened carefully to the points my hon. Friend made.
The hon. Member for Liverpool, Wavertree (Paula Barker) raised a number of points, including one about the NHS and my right hon. Friend the Chancellor’s role in it. This Government have invested record amounts in our NHS; I was the Minister who took through, in early 2020, the legislation that increased by £33.9 billion the funding for the NHS. My party has a strong track record of funding our NHS.
My hon. Friend the Member for Broadland (Jerome Mayhew) was right to highlight, as others have, the broader context in the global economy with which we are faced: the legacy of covid; and the challenges in Ukraine. During covid we did the right thing, supported by those on both sides of this House, to protect lives and livelihoods, but we should not pretend that that did not come at a significant cost.
Edward Argar
I am very conscious that I have only about two minutes left and I would like to address the points made by a few other colleagues, including some on the right hon. Gentleman’s side of the House.
The hon. Member for Weaver Vale (Mike Amesbury) knows that I am fond of him—I do not know whether that will harm my career or his—but I just highlight to him the challenges that have driven the headline inflation rates we are seeing, which are higher in the eurozone than here at the moment. These are not Government-driven; they are energy costs and supply-chain challenges. If he looks at the analysis by the Office for National Statistics of the figures, he will see that those rates are particularly driven by food costs and food supply chains. We also have to look more broadly at the geopolitical context.
My hon. Friend the Member for South Suffolk (James Cartlidge) genuinely understands business and knows what it takes, and he highlighted the need to support the most vulnerable. That is something that my right hon. Friend the Chancellor has made clear will be at the forefront of his announcements. My hon. Friend also touched on the social care levy and the social care cap, and I know that he has views on it. I know that my right hon. Friend the Chancellor will have heard that, but I am afraid that my hon. Friend will have to wait until 31 October for announcements from the Chancellor, which I will not pre-empt.
Significant contributions have been made by Members from both sides of this House. These are challenging times and the Government will take the difficult decisions necessary to ensure there is trust in our national finances. We will also remain completely committed to our mission to go for growth rooted in economic stability and confidence, but let us not forget that our economic foundations remain strong.
We are a Government with a record of action: we acted to support families and businesses on energy costs, we have acted to bring stability, and we will act to grow the economy. As the Chancellor said to the House on Monday, despite all the adversity and challenges we face, there is enormous potential in this country. Our job, now and always, is to fulfil that potential.
Question put.
The House proceeded to a Division.
Mr Deputy Speaker (Mr Nigel Evans)
I understand there has been a problem with the card readers in the Aye Lobby. They should be working now.
Mr Pat McFadden (Wolverhampton South East) (Lab)
On a point of order, Mr Deputy Speaker, the motion that the House has just passed, with no opposition from the Government,
“calls on the Government to publish the Office for Budget Responsibility forecasts immediately alongside Government estimates of windfall profits for the next two years from energy producers in the UK.”
Both those pieces of information are very important. The House has just called on the Government to publish them immediately. I seek your help in making sure that that happens.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the right hon. Member for his point of order. Those on the Treasury Bench will have heard what he has to say. He is absolutely right that the Government must respond within a certain period of time to say how they will act now that that motion has been passed.
Ban on Fracking for Shale Gas Bill
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
18:59 - The House having divided: - Ayes: 230 / Noes: 326 - Question accordingly negatived.
Mr Deputy Speaker (Mr Nigel Evans)
I inform the House that I have selected the amendment in the name of the Prime Minister.
Edward Miliband (Doncaster North) (Lab)
I beg to move,
That this House calls on the Government to introduce a ban on hydraulic fracking for shale gas; and makes provision as set out in this Order:
(1) On Tuesday 29 November 2022:
(a) Standing Order No. 14(1) (which provides that government business shall have precedence at every sitting save as provided in that Order) shall not apply;
(b) any proceedings governed by this Order may be proceeded with until any hour, though opposed, and shall not be interrupted;
(c) the Speaker may not propose the question on the previous question, and may not put any question under Standing Order No. 36 (Closure of debate) or Standing Order No. 163 (Motion to sit in private);
(d) at 3.00 pm, the Speaker shall interrupt any business prior to the business governed by this Order and call the Leader of the Opposition or another Member on his behalf to present a Bill concerning a ban on hydraulic fracking for shale gas of which notice of presentation has been given and immediately thereafter (notwithstanding the practice of the House) call a Member to move the motion that the Ban on Fracking for Shale Gas Bill be now read a second time as if it were an order of the House;
(e) in respect of that Bill, notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.
(f) any proceedings interrupted or superseded by this Order may be resumed or (as the case may be) entered upon and proceeded with after the moment of interruption.
(2) The provisions of paragraphs (3) to (18) of this Order shall apply to and in connection with the proceedings on the Ban on Fracking for Shale Gas Bill in the present Session of Parliament.
Timetable for the Bill on Tuesday 29 November 2022
(3)(a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings up to and including Third Reading shall be taken at the sitting on Tuesday 29 November 2022 in accordance with this Order.
(b) Proceedings on Second Reading shall be brought to a conclusion (so far as not previously concluded) at 5.00 pm.
(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings up to and including Third Reading shall be brought to a conclusion (so far as not previously concluded) at 7.00 pm. Timing of proceedings and Questions to be put on Tuesday 29 November 2022
(4) When the Bill has been read a second time: (a) it shall, notwithstanding Standing Order No. 63 (Committal of bills not subject to a programme Order), stand committed to a Committee of the whole House without any Question being put; (b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
(5)(a) On the conclusion of proceedings in Committee of the whole House, the Chairman shall report the Bill to the House without putting any Question.
(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
(6) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (3), the Chairman or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply—
(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment, new clause or new schedule selected by The Chairman or Speaker for separate decision;
(d) the Question on any amendment moved or Motion made by a designated Member;
(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other Questions, other than the Question on any motion described in paragraph (15) of this Order.
(7) On a Motion made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
Consideration of Lords Amendments and Messages on a subsequent day
(8) If on any future sitting day any message on the Bill (other than a message that the House of Lords agrees with the Bill without amendment or agrees with any message from this House) is expected from the House of Lords, this House shall not adjourn until that message has been received and any proceedings under paragraph (9) have been concluded.
(9) On any day on which such a message is received, if a designated Member indicates to the Speaker an intention to proceed to consider that message—
(a) notwithstanding Standing Order No. 14(1) any Lords Amendments to the Bill or any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly;
(b) proceedings on consideration of Lords Amendments or on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under subparagraph (a) shall thereupon be resumed;
(c) the Speaker may not propose the question on the previous question, and may not put any question under Standing Order No. 36 (Closure of debate) or Standing Order No. 163 (Motion to sit in private) in the course of those proceedings.
(10) Paragraphs (2) to (7) of Standing Order No. 83F (Programme Orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings on consideration of Lords Amendments to a conclusion as if:
(a) any reference to a Minister of the Crown were a reference to a designated Member;
(b) after paragraph (4)(a) there is inserted—
“(aa) the question on any amendment or motion selected by the Speaker for separate decision;”.
(11) Paragraphs (2) to (5) of Standing Order No. 83G (Programme Orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings on consideration of a Lords Message to a conclusion as if any reference to a Minister of the Crown were a reference to a designated Member.
Reasons Committee
(12) Paragraphs (2) to (6) of Standing Order No. 83H (Programme Orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order as if any reference to a Minister of the Crown were a reference to a designated Member.
Miscellaneous
(13) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings on the Bill to which this Order applies.
(14)(a) No Motion shall be made, except by a designated Member, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.
(b) No notice shall be required of such a Motion.
(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.
(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.
(15)(a) No dilatory Motion shall be made in relation to proceedings on the Bill to which this Order applies except by a designated Member.
(b) The Question on any such Motion shall be put forthwith.
(16) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
(17) No private business may be considered at any sitting to which the provisions of this Order apply.
(18)(a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which proceedings to which this Order applies are to take place shall be postponed until the conclusion of any proceedings to which this Order applies. (b) Standing Order 15(1) (Exempted business) shall apply in respect of any such debate.
(19) In this Order, “a designated Member” means—
(a) the Leader of the Opposition; and
(b) any other Member acting on behalf of the Leader of the Opposition.
(20) This Order shall be a Standing Order of the House.
We have called this debate to provide the House with the right, which it should have, to make the decision on whether fracking should be allowed to restart across our country. The Business Secretary made it clear last week that he will not give the House a binding vote on the principle of the fracking ban, despite the Conservatives overturning their manifesto promise to keep the ban in place, despite the concern in all parts of this House and despite the concerns of the public.
If our motion is passed, it will mean that on 29 November, in six weeks’ time, the House will debate a fracking Bill. We have done this because we know what would have happened if we had had a simple Opposition Day motion on fracking. The Government would simply have abstained and ignored the vote, as they have done in votes on the windfall tax, fire and rehire, and the cut to universal credit, and as they will no doubt try to do with the motion that has just been passed. This is about faith in politics. The Government are seeking to break their manifesto promise without even getting the consent of this House. Today, we give all Members a chance to make this crucial decision on fracking.
Now let me go through the substantive arguments against fracking. There are four key questions for the House and the country. Will fracking make a difference to the price of energy? The answer is no. Is there categorical evidence that it is safe? The answer is no. Is it consistent with any remotely serious response to the climate crisis? The answer is no. Crucially, do people want it? The answer is no.
Sammy Wilson (East Antrim) (DUP)
Does the right hon. Gentleman accept that there is another vital question to be asked? Since we will require gas until at least 2050—£1 trillion-worth of gas is to be imported—where are we going to get that gas from?
Edward Miliband
We can have a debate about North sea oil and gas, but fracking is a wholly different category. It is dangerous, it is expensive and it is not supported by the public.
Tim Loughton (East Worthing and Shoreham) (Con)
The right hon. Gentleman knows that I, like many of my colleagues, am not in favour of fracking and would like us to maintain our manifesto commitment. But he also knows that because he is playing party political games this afternoon, there is no way that we could vote for his motion. Is he more interested in genuinely opposing fracking or in playing party political games and trying to score points on this issue of great importance to our constituents?
Edward Miliband
I am glad we have a Conservative Member who wants to uphold their manifesto commitments. It is a refreshing change, I have to say. But here’s the thing: he should be directing his point to the Secretary of State. The Secretary of State was explicitly asked on the radio last week whether he would give the House a binding vote on this issue—I think the case for that is massively strengthened by the fact that the Conservative party is breaking its manifesto promise—and he said no. We are forcing this debate because it is the only way we can give the House a binding vote on this issue.
I want to talk about price. I know he is not exactly flavour of the month, but the recently departed Chancellor of the Exchequer said in February that
“even if we lifted the fracking moratorium tomorrow…no amount of shale gas from hundreds of wells dotted across rural England would be enough to lower the European price…private companies are not going to sell the shale gas they produce to UK consumers below the market price. They are not charities, after all.”
The Climate Change Committee says the same. Even the founder of Cuadrilla, Chris Cornelius, says:
“Even if the UK were to generate significant gas, we are not likely to see lower gas prices—any more than living next to a farm would mean paying less for milk.”
The reason is that prices are set in the European market, and the best evidence from the British geological survey is that fracking can meet less than 1% of European gas demand, and even that in a number of years’ time. Hence it will make no difference to price, and no amount of hand waving from the Secretary of State will change that fact.
Maria Caulfield (Lewes) (Con)
Is it not true that the right hon. Gentleman said at the Labour party conference on 24 September 2013:
“Of course, there could be a role”
for fracking
“if it can meet safety concerns”?
Edward Miliband
I am very glad the hon. Lady has done her research about what I said on 24 September 2013, because so have I. [Interruption.] I think she should listen. This is what I said:
“I believe when George Osborne says fracking is a panacea he is totally misguided”,
and that the “notion” it could “solve Britain’s energy problems” was “just nonsense.”
I went to say that it needed to
“meet safety concerns and the needs of local residents”.
Since then—
Edward Miliband
No. Since then, it has been shown that fracking cannot meet safety concerns or the needs of local residents.
The second question I want to explore is whether fracking is safe, which has long been the subject of debate—a debate we led in 2013. The Conservative manifesto said:
“We will not support fracking unless the science shows categorically that it can be done safely.”
It is important to go back to what happened in 2019 and the reasons why the Government introduced the moratorium. The then Business Secretary, the right hon. Member for South Northamptonshire (Dame Andrea Leadsom)—hardly a tofu-eating, woke lefty—said that
“it is clear that we cannot rule out future unacceptable impacts on the local community.”
It is not surprising that the right hon. Lady concluded that. Has the current Business Secretary read the official report from the time? I have, because I am a nerd. It said it could not rule out an event of 4.5 on the Richter scale, having already seen a 2.9 Richter scale event at Preston New Road. Let me tell the House what the impact of such an event would be by reading from the report. It would
“be widely felt…there could be widespread building damage in the study area, with cracked plasterwork affecting approximately 10 percent of buildings, more serious structural damage (of varying degrees) affecting 5.4 percent of buildings”—
including chimney failure. It continued:
“Some damage would be caused to buildings outside of the study area.”
That is why the Government banned fracking and said that they would not restart it unless the British Geological Survey said it was safe.
In the words of the then Business Secretary in April this year:
“Unless the latest scientific evidence demonstrates that shale gas extraction is safe, sustainable and of minimal disturbance to those living and working nearby, the pause in England will remain in place.”
No ifs, no buts. In its report published last month, the British Geological Survey said that it could not provide that assurance. Instead, it said that hydraulic fracturing
“can trigger earthquakes large enough to cause structural damage. These events were not predicted in advance of operations.”
Here is the key point for the whole House: there certainly is not the compelling evidence about safety that the Government promised would be the basis of any lifting of the ban. This is as clear an example of a broken manifesto promise as we are ever likely to see.
Simon Hoare (North Dorset) (Con)
The right hon. Gentleman is making a compelling case against fracking with which I fully agree. Does he agree with me that, for all the potential downsides he has referenced, there is absolutely no guarantee that any shale gas extracted would be sold in the national domestic market? It would go to the highest bidder. There could be real downsides for our communities with no obvious uplift in supply.
Edward Miliband
The hon. Gentleman puts it incredibly well. That is why what the Government are coming up with is such a nonsense idea.
The Government are breaking not just a manifesto promise—no doubt they will say that the manifesto was drawn up before the Russian invasion of Ukraine—but a promise made by Ministers in April this year. The Business Secretary’s response is not to abide by the promise but to try to shift the goalposts. In his immortal words, which I hope MPs will take back to their constituents,
“tolerating a higher degree of risk and disturbance appears to us to be in the national interest”—[Official Report, 22 September 2022; Vol. 719, c. 40WS.]
I think that could be a description of the Government. This is a matter of trust. How can communities across this country trust a Government who say one thing categorically in their manifesto, repeat it in April, and then go back on their word with no mandate from the British people?
Mr Clive Betts (Sheffield South East) (Lab)
My right hon. Friend talked about the Government imposing the ban because of the risk of disturbance to local communities. There was a proposal to frack in Marsh Lane, which happens to be in a neighbouring constituency—that of the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for North East Derbyshire (Lee Rowley), who I think has responsibility for planning and will perhaps deal with fracking. There would be dozens, if not hundreds of lorry movements a day down rural lanes—that is what “disturbance” means—and lots of wells drilled that would despoil the local environment. That is the reality of fracking, which every Conservative Member should think about if they are prepared to accept fracking in their local areas.
Caroline Lucas (Brighton, Pavilion) (Green)
I am grateful to the right hon. Gentleman for giving way. In terms of trust, he will know that the Government have set up a new consultation to determine what public consent is. Does he agree that it is a monstrous waste of time and money to try to determine something that does not exist? There is no local consent for this; plenty of Government Members do not actually want it. If the Government really want to know what consent is, why do they not have a general election?
Edward Miliband
The hon. Lady makes her point well and anticipates the issues that I will come on to. Fracking will not make a difference to bills, we cannot be assured of its safety, and it is a disastrous response to the climate crisis.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
Will the right hon. Gentleman give way?
Edward Miliband
No, I will not give way for the moment.
The decision on fracking is potentially environmentally damaging, with emissions from fracking up to 50% higher than those from conventional gas. If every country follows the lead that the Business Secretary suggests by extracting every last drop of their fossil fuel reserves, global temperatures will rise by more than 3° C, which will spell catastrophe for our children and grandchildren. That should be patently obvious to anyone, not least the person in charge of fighting the climate crisis.
Edward Miliband
No, I will not. I want to make some progress, because many hon. Members want to speak.
On the crucial issue of what the public think, I suggest that the Business Secretary looks at the surveys conducted by his own Department. Some 78% of the public support onshore wind, 83% support tidal and offshore wind, and 87% support solar, but just 17% support fracking. Suddenly, in a sign of desperation about how grossly unpopular and unwanted the policy is, the Government say that they want to design a system of local consent.
Edward Miliband
I will not give way for the moment.
I do not know why the Business Secretary wants further evidence about what communities think. We already have the answer from the public: fracking is deeply unpopular and communities do not want it. Indeed, Fylde Council, which is controlled by his party and at the centre of the main UK experiment in fracking, just passed a unanimous motion saying that the ban should remain and that he should honour the manifesto commitment.
Andrew Gwynne (Denton and Reddish) (Lab)
My right hon. Friend knows how the planning system works as well as I do. Councils can refuse planning permission and support their local communities, but fracking companies have the ability to appeal that decision to the Planning Inspectorate, for which, as he knows, public opinion is not a material planning consideration. Is this not just smoke and mirrors to get these unpopular proposals past those on the Tory Benches, when everybody knows that public opinion counts for nothing?
Edward Miliband
My hon. Friend is absolutely right, and there are more weasel words in relation to local consent. I give way to the hon. Member for Bolsover (Mark Fletcher), who has been desperate to get in.
Mark Fletcher
I find myself in strange agreement with many of the arguments being made from the Opposition Dispatch Box, but will the right hon. Gentleman be clear that the vote that we are having tonight is on not banning fracking, but a procedural matter for the House of Commons? Will he be truthful to the public about what we are voting on tonight?
Edward Miliband
We are voting on our proposal to bring in a Bill to ban fracking. I say to the hon. Gentleman, for whom I have a large amount of respect, that we are not going to get a vote on the principle of fracking, because the Business Secretary has said that. I know that the hon. Gentleman is against fracking, so this is his chance to stand up for his constituents and say no to fracking.
I will say more about the issue of consent and the Government’s amendment, and I will say something to the House as a whole and to Conservative Back Benchers, which goes to the hon. Gentleman’s point. They should not fall for the Government’s weasel words in this debate. The way to stop fracking is to vote for our motion. If they do not, their constituents will know that they had the chance to stop fracking and refused to do so.
We now discover, however, that that is not all they will be voting for tonight, because the genius minds of the Government Whips Office are now seeking to turn a vote on this important issue into a vote of confidence in the current Prime Minister. Let us picture the scene: the Government Whips are confronted with a vote on fracking, one of the least popular causes in the country, with the Government falling apart around them. They could decide to retreat, but that would be yet another U-turn. They could concede a vote of this House on the fracking ban, but they would lose and fracking would be dead.
Then, at the 11th hour, one galaxy brain says that the way to force the vote through is to make it a vote on not just one of the most unpopular causes in the country—fracking—but the most unpopular cause in the country: the current Prime Minister. We might call it the “frack me or sack me” strategy.
In normal times, such an idiotic idea would have been dismissed out of hand, but these are not normal times. The Government see this as their leaky life raft, but I say to the House and to Conservative Members that they all know the Prime Minister will be gone in a matter of weeks, if not days, if not hours, and they know fracking will go with her, so why defend the indefensible? Why not be on the right side of history and their constituents?
Just like this Government, fracking is a dangerous, extreme idea that the British people do not support, and I appeal to all Members of the House, particularly Conservative Members, to have the courage of their convictions. Today is a day when they can put their constituents before their party and vote to give this House the decision on a fracking ban. It is time to consign fracking to the dustbin of history.
The Secretary of State for Business, Energy and Industrial Strategy (Mr Jacob Rees-Mogg)
I beg to move an amendment, to leave out from “Government” to end and insert
“to consult to ensure there is a robust system of local consent, and clear advice on seismic limits and safety, before any hydraulic fracturing for shale gas may take place; and believes that such consultation must consider how the views of regional mayors, local authorities and parishes should be reflected as well as the immediate concerns of those most directly affected.”
I thank the right hon. Member for Doncaster North (Edward Miliband) for raising this important topic. I recognise that many Members and their constituents have concerns about shale gas, and that is why we will consult on the system of local consent and provide clear advice on seismicity and safety before any hydraulic fracturing for shale gas takes place.
Nick Gibb (Bognor Regis and Littlehampton) (Con)
I am sorry to intervene so soon on my right hon. Friend’s speech, and I am grateful to him for giving way. He will be aware of deep concerns in Sussex about fracking, and they are concerns that I share, not least because our 2019 manifesto said:
“We will not support fracking unless the science shows categorically that it”
is safe, which I do not think it does. Can my right hon. Friend assure me that, in the Government’s consultation paper he has just referred to on local consent, they will include an option for local referenda arranged by local authorities and overseen by the Electoral Commission?
Mr Rees-Mogg
My right hon. Friend has pre-empted a couple of paragraphs of my speech, because I was going to say that the consultation should consider the use of local referendums. I think that is one of the ways in which local consent could be indicated.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Will the Secretary of State give way?
Mr Rees-Mogg
Not at the moment.
We want to ensure that the consultation considers the views of regional Mayors and local authorities, as well as the immediate concerns of those most directly affected. I also want it to consider the views of MPs, as well as the use of local referendums, as I said to my right hon. Friend the Member for Bognor Regis and Littlehampton (Nick Gibb). We will consult on the mechanism, but I can assure the House that any process of evidencing local support must be independent rather than directly by the companies themselves, and if evidence of appropriate local support for any development is insufficient, that development should not proceed. Local communities will have a veto, so I can assure my hon. Friend the Member for Rother Valley (Alexander Stafford) that if the people in his constituency do not want fracking, they will not have it.
Simon Hoare
Could my right hon. Friend confirm, for clarity’s sake, that the moratorium will remain in place while the process of consultation is agreed and that it will remain in place until it is approved by a positive vote in this place following a debate on the Floor of the House? Can he also confirm that the Government will indeed press their amendment today to a Division, if time allows and such circumstances are created?
Mr Rees-Mogg
I am grateful to my hon. Friend, and I would like to make it absolutely clear that we need local consent before anything happens.
Mr Rees-Mogg
No.
Let me be clear to my hon. Friend the Member for North Dorset (Simon Hoare) that once the consultation on the mechanism for ascertaining a community’s view has been completed, the results will be brought to the House for approval, which I think he was also asking. If the House does not approve, fracking could not go ahead. Even if the House were to approve a mechanism, local communities would still have to consent in accordance with the mechanism. I reiterate: local communities will have a veto.
Andrew Selous (South West Bedfordshire) (Con)
I want to take the Secretary of State back to the word “unless” in our manifesto, where we said that we would not support fracking
“unless the science shows categorically that it can be done safely.”
Will he confirm that the sense of that word is that we would need, at very least, a new rapid evidence review about safety? Will he commit to that and to the manifesto on which he and I were elected?
Mr Rees-Mogg
I am grateful to my hon. Friend. I think his suggestion to have a rapid review of the evidence is eminently sensible.
Rebecca Pow
I thank my right hon. Friend for graciously giving way. He might want to clarify that this debate is a bit of a game, and is not exactly about fracking. If we are talking about fracking, scientific evidence and data is so critical—it is everything we base our policies on. Does he agree that the data should not just be about seismic activity, and that the effect on water will be critical? I do not just mean water that is put down the drilling space; I mean the effect on hydrology in future years. It is critical that the Government are seen to be serious about the scientific evidence on this.
Mr Rees-Mogg
I am grateful to my hon. Friend on both counts. She is right to say that trying to take control of the Order Paper is parliamentary interweaving rather than the substance of the debate. To take control of the Order Paper, people need to have won a majority in the election. That is how our system works The experience that we had in 2017 to 2019 proved how bad it is for Parliament when the Order Paper is messed around with, so I think that part of it is bad.
On the point regarding water, my hon. Friend is absolutely spot on. That is one of the keys to how things could be done safely, and we must be certain that the water used on site, and water that may be near sites, is safe.
Several hon. Members rose—
Mr Rees-Mogg
I think my hon. Friend the Member for Winchester (Steve Brine) wanted to intervene, and I will happily give way to him.
Steve Brine
That is very kind of the Secretary of State. I am not concerned about the threat that local consent will go the wrong way in my constituency, because I do not believe for a minute that my constituents would give consent to fracking in our area. The shadow Secretary of State took an intervention about the Planning Inspectorate, and the Secretary of State said that local people will have a veto over that issue. Will he be clear that the Planning Inspectorate will not have a veto over local people?
Mr Rees-Mogg
Let me be absolutely clear: local communities will have a veto. If fracking does not get local consent—what form that local consent must take will be consulted on, and it could be, as my right hon. Friend the Member for Bognor Regis and Littlehampton asked, by local referendum. That is what the consultation will be about. If local consent is withheld, that is a veto and it will not be overruled by national Government.
Simon Hoare
In fairness, the Secretary of State is trying to address the serious concern that he knows exists on these Benches, and many of us are grateful to him for that. I think he said this in response to my earlier intervention, but I would like him to clarify this point. When he brings back the local consent process, the tick-box programme, if the House votes against it, the moratorium on fracking by its very definition will remain in place. Will he confirm that point for absolute clarity, and say that today is not the end of the matter?
Mr Rees-Mogg
My hon. Friend is right to say that today is not the end of the matter. If the House were not to accept the local consent mechanism, there would be no ability for local communities to give consent, and that would mean a veto were in place.
Sir Greg Knight (East Yorkshire) (Con)
My right hon. Friend is being very generous in giving way. Is the neatest way of assessing local consent to take away the right of appeal to a planning inspector in these matters, so that the decision of the local planning authority is deemed the expression of local consent and is the final decision?
Mr Rees-Mogg
I am grateful to my right hon. Friend. That is absolutely the purpose of the consultation—to see what form local consent ought to take
Richard Graham (Gloucester) (Con)
It is absolutely true that the motion tabled by the Opposition does not reflect what was in our manifesto. It calls on the Government to introduce a ban on hydraulic fracking—followed by the three and a half pages of procedural stuff, which is what the motion is really about—whereas our manifesto said that we would introduce “a moratorium”.
In the Secretary of State’s letter to us, he says:
“With time, we will gain more understanding of how we can best develop this potentially very substantial UK asset.”
May I put it to him that, with time, we will gain more understanding of whether we should develop this potential asset? Would he accept that?
Mr Rees-Mogg
I am grateful to my hon. Friend. We are not pre-empting local consent in the letter that I sent out, so he is right.
I think that the time has come for me to return to my text—at least, for a moment or two. I do understand, as we have discussed, the concerns that people have about the safety of hydraulic fracturing. The excellent report by the Royal Society and the Royal Academy of Engineering from 2012 suggests that shale gas extraction can be managed safely and effectively in the United Kingdom owing to our high regulatory standards and many decades’ experience of extracting oil and gas both on and offshore. I return to the quotation from the right hon. Member for Doncaster North. As was reported in Wales Online on 25 September 2013, he said:
“Of course, there could be a role for it if it can meet safety concerns and the needs of local residents”.
So he should vote against his own motion, because he accepted that there should be a role for it.
The Government are absolutely determined to build our energy security. At a time when energy costs are a worry for many, I can say that we are starting from a tolerably good place. The United Kingdom is blessed with a healthy mix of different sources of energy, including a strong wind resource, one of the few significant oil and gas reserves in Europe, several gas import terminals and a well-managed electricity network. We have also made strong progress in building new renewable electricity generation such as offshore wind and plan to accelerate that further while also developing new nuclear capacity.
However, we cannot escape the fact that we are a nation with a structural reliance on gas. Even though we will be reducing our reliance on gas on the way to net zero—indeed, we may be using just a quarter of the gas that we use now by 2050—gas will remain the essential transition fuel.
Gas may have been out of sight and out of mind for some years. Perhaps we were not sufficiently prepared. However, we must not take our local gas supplies for granted. This year, the energy world changed. Putin’s war against Ukraine and the weaponising of gas supply to Europe has cut off a major source of supply to the European markets that we are connected to and ignited a global rush for gas resources. So while there is no immediate threat to UK supply, we cannot let our domestic production fade away and end up ever-more reliant on imports. No responsible Government would gamble with the gas supply. That is why, in the near term, our priority is keeping our domestic production online. The North Sea Transition Authority has launched the 33rd oil and gas licensing round, which is expected to deliver more than 100 new licences and put more UK gas on the grid. That is why we are discussing making the most of our shale gas resources.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I always try to be helpful. The way out of the dilemma, if you like, is green hydrogen. I repeat what I said some days ago in this place: there are advanced plans in my constituency and the north of Scotland to generate 50 MW of energy, and that will shortly go up to 300 MW. Again, I invite His Majesty’s Government to come and see our plans. It would be helpful to all concerned.
Mr Rees-Mogg
The hon. Gentleman’s intervention is indeed helpful. Green hydrogen is one of the most exciting technologies, and I am very enthusiastic about the opportunities there.
Sammy Wilson
Does the Secretary of State share my bemusement at some of the arguments? We know that we will need gas and that we will spend billions of pounds importing it from regimes that we cannot depend upon, and we know that we have gas in the north of England that could generate thousands of jobs and give us the security of our own supply. What is not to like about that?
Mr Rees-Mogg
I am grateful to the right hon. Gentleman, who puts his thoughts with classic cogency.
Mr Rees-Mogg
Not at the moment.
The Government remain committed to net zero by 2050. It is how we reach that without putting our energy security at risk.
Geraint Davies (Swansea West) (Lab/Co-op)
Will the Secretary of State give way on that point?
Mr Rees-Mogg
The hon. Gentleman always wants to intervene on every point. He always says, “On this point” so it is hard to believe it really is on this point.
It makes no sense to become more reliant on shale gas produced overseas. Indeed, the Committee on Climate Change’s analysis notes that while current evidence on the emissions footprint of UK shale gas and liquefied gas imports is not yet definitive, available estimates indicate that emissions from those imports could be higher than those that would arise from commercial UK shale gas production by between 2 and 63 grams of carbon dioxide per kWh of gas consumed. Using our own resources is therefore more environmentally friendly and will help us to get to net zero.
Sir Robert Goodwill
My right hon. Friend is making some very valid points. It is about not just domestic gas supplies and electricity production, but the chemical industry, and most importantly, the fertiliser industry. One of our plants has already shut down and the others are switching from natural gas from UK sources to ammonia from the United States, whose cheap shale gas enables that industry to keep going. If we cannot produce our own fertiliser, food production in this country is under great threat.
Mr Rees-Mogg
I am grateful to my right hon. Friend, who puts it very clearly. Using our own resources is environmentally friendly, but we have to make sure there is popular consent for it. I feel that the British public would not welcome the disruption and shortages that would be caused by Labour’s policy of taking gas out of the network by 2030.
Mike Amesbury (Weaver Vale) (Lab)
I thank the Secretary of State for giving way. He is being so generous in giving way to people, particularly those on his own side. In my constituency, and in the constituencies of Ellesmere Port and Neston, and Chester, we had a public inquiry only recently, costing hundreds of thousands of pounds, and our communities rejected shale extraction. That is local consent. Why do we again have to jump through hoops and go through the same process?
Mr Rees-Mogg
The hon. Gentleman should be supporting what I am saying. He shows the value of local consent. The reality is that it will not always be given, and I am very well aware of that.
Let me move on to seismic limits. We have been clear that any future exploration or development of shale gas will need to meet rigorous safety and environmental standards. Drawing on lessons from around the world, we will make sure hydraulic fracturing for shale gas is done safely. Last month, the British Geological Survey published its report. This is a really important way of looking at what the seismic experience has been and comparing it with other forms of production, both of energy and other forms of manufacturing industry. The report makes it clear that forecasting the occurrence of felt seismic events remains a scientific challenge for the geoscience community. However, it also makes clear that to improve our understanding, we need more exploratory sites to gather the necessary data. We think this is a sensible thing to look at and that it would be unwise not to look at it, but it must have community support.
Several hon. Members rose—
Mr Rees-Mogg
I am almost coming to an end and lots of people want to speak. I have taken a vast number of interventions, including three from the Opposition, but I will give way to the hon. Member for Bolton South East (Yasmin Qureshi).
Yasmin Qureshi (Bolton South East) (Lab)
I thank the right hon. Gentleman for giving way. Will he seriously consider two aspects of fracking? First, it is unsafe in a country like the United Kingdom, which has a very small landmass and a large population. It might be safe somewhere with thousands and thousands of miles of barren land, but not in a country like ours. Secondly, does he really want to see applications for disgusting hydraulic fracturing across our beautiful country?
Mr Rees-Mogg
I am grateful to the hon. Lady, who is always a great contributor to this House. She is right to raise the issue of safety, which will be fundamental to any proposal for the extraction of shale gas.
The world has changed and our energy policy needs to recognise this. This Government will make the difficult but necessary decisions to secure the nation’s energy supply. Exploring our potentially substantial shale gas reserves is potentially an important part of that. But this must not be looked at in isolation, which is why we are exploring all avenues available to us, including solar, wind and nuclear, but we cannot ignore the importance of local gas production. However, let me reiterate the commitment—I reiterate this particularly to my hon. and right hon. Friends—that there is an absolute local consent lock. Any process to determine local consent must be run independently, and this House will vote on any scheme that we bring forward.
Alan Brown (Kilmarnock and Loudoun) (SNP)
As the licensing of fracking and the planning process are devolved, I was not initially planning to participate in the debate, but given that the Government have effectively made it a motion of confidence in them, it is only right that we do so and outline the thoughts of the Scottish National party. No matter what the official Government line is, the Chair of the Public Administration and Constitutional Affairs Committee, the hon. Member for Hazel Grove (Mr Wragg), made it clear that the Tory Government are making this a vote of confidence in them. I oppose fracking, and the SNP Government have ruled out fracking in Scotland, producing an effective ban on it, so I agree fully with the motion in that respect. It is not for us to impose our views on what happens in England, but we will vote for the motion to show that we have no confidence in this utter, utter shambles of a Tory Government.
We have heard interventions on the shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband), from Tory MPs who say that they are opposed to fracking and want to represent the views of their constituents who oppose fracking, but that they will vote for the Government amendment and against the motion. That makes no sense. If they have any backbone, I urge them to vote for a ban on fracking.
Richard Graham
SNP Members are huge champions of local democracy, so does the hon. Member accept that if a local council were to support the idea of fracking, that does represent local consent? Does he agree that the support of the local council should be the crucial issue involved?
Alan Brown
That brings me to the point that I was going to make. If this is all about local democracy and democracy itself, why are the hon. Member’s Government making his MPs vote in a way that they say they do not want to vote? How can we trust them to implement some form of local democracy when MPs are getting forced to vote for the Government amendment against their will?
Sammy Wilson
At least the hon. Member is being honest in his speech. He has made it clear that the only reason why he is intervening on what he believes is an English issue is that this is a vote of no confidence in the Government. Surely he understands, therefore, why this ceases to be a debate about local democracy and where we get our gas from. This is all a bit of political playing by the Opposition.
Alan Brown
The political playing is by the Government, who have made the motion a vote of confidence in themselves, and are making their MPs vote in a way they do not want to. It is not the Opposition playing games—it is that lot over there.
Christian Wakeford
I was at Lancashire County Council when this issue first came to it seven years ago. It was rejected then and overruled by the planning inspector. Since then, we have seen that the public do not want it, councils do not want it, the Secretary of State’s Back Benchers do not want it, the leader of the Secretary of State’s council, I believe, does not want it, and Ministers do not want it—at least not in their own backyard. Who actually wants fracking? I cannot think of anybody.
Alan Brown
That is a good question, but it is more one for the Secretary of State. It is clear that he is in favour of it and is imposing his will on the rest of his party.
Maria Caulfield
I gently say to Opposition Members that many of us—as we have heard from a number of colleagues in the Chamber—do not support fracking, and if the Opposition want to win hearts and minds, the way to do it is not through political games and stunts such as this, which would introduce a Bill. There is no way that we can support the Opposition taking control of the Order Paper. If they want to be serious about fracking, let us have a serious debate on fracking. When the Government bring forward the motion, we will be able to vote, whether we support fracking or not. The way to do this is not to hijack the Order Paper and play political games with legislation.
Alan Brown
I have news for the hon. Member: if she votes for the amendment, she will be voting for the principle of fracking, no matter how she dresses it up.
Richard Graham
On a point of order, Mr Deputy Speaker. The hon. Gentleman says that anyone who votes for the Government amendment is voting for fracking. That is not correct. As he knows and you know, a vote for the Government amendment is a vote for the Secretary of State to bring back a definition of local consent for this House to vote on before any fracking can conceivably move forward. Can you, from the Chair, advise the hon. Gentleman of the truth of the matter?
Mr Deputy Speaker (Mr Nigel Evans)
Let us hope that there are no more devices like that. That is clearly not a point of order for the Chair, but the hon. Gentleman has made his view known and it is on the record.
Alan Brown
It is great to hear Tory Back Benchers tying themselves in knots to argue about why they are voting for the principle of fracking.
Let me get back to local consent. The Government amendment refers to consulting
“regional mayors, local authorities and parishes”.
That is quite a vague concept and could open things up to cronyism and political machinations. However, I welcome the sentiment of the Secretary of State, who is now talking about local referendums. It is good to know that the Tory Government now believe in the principle of referendums for people to exercise their democratic right; I look forward to Scotland being able to implement that next year. I welcome that damascene conversion.
The Tory Government’s new-found enthusiasm for shale gas is not based on credible evidence. They have put forward arguments that it will increase energy security, that it is required because of the illegal Russian invasion of Ukraine and that we need to move away from our reliance on Russian oil and gas imports, but really they have arrived at a solution to a problem that does not exist. It is quite clear that the UK had minimal reliance on Russian imports and has already managed to eliminate the small percentage of oil and gas imports from Russia.
If the argument is that shale gas will reduce prices, that is quite clearly not true either. The right hon. Member for Spelthorne (Kwasi Kwarteng)—the then BEIS Secretary, now the former Chancellor—admitted that any shale gas would be an internationally traded commodity on the international market and that traders would determine prices. The only way that that will not happen is if there is another damascene conversion and if the Government are planning some sort of nationalised energy company that will frack the shale gas, control it and put it on the domestic market at low prices. Otherwise, it will be all about the international market.
The harsh truth is that there is not even enough firm evidence of the reserves available in the basins that can be used for extraction. Without that knowledge, any talk of increasing energy security and reducing imports is pure fantasy at this stage. Any talk of jobs or of boosting local economies also remains completely speculative—there is no evidence for it.
Tahir Ali (Birmingham, Hall Green) (Lab)
Our country is fortunate enough to have massive potential for the development and harnessing of renewable energy. Does the hon. Member agree that in resorting to fracking, the Government are essentially admitting that they have no interest in developing the skills, infrastructure, jobs or industries necessary for a green industrial revolution in this country?
Alan Brown
I agree. We have only to look at the renewable energy revolution that has happened in Scotland. Of course, for Scotland to fully embrace that potential, we clearly need the powers that come with independence and we need to get away from the decision makers on the Conservative Benches.
Claire Hanna (Belfast South) (SDLP)
At a time like this, I am thankful for devolution, because my Northern Ireland Assembly colleagues were able temporarily to prevent fracking in Northern Ireland by banning permitted development rights. Does the hon. Member share my concern that the Prime Minister is taking advantage of the cost of living crisis? Coupled with the removal of retained EU law, this policy risks environmental degradation across these islands and does nothing to sustainably manage the climate crisis or the energy crisis.
Alan Brown
I agree wholeheartedly. As I have said, the Government are trying to present a solution to a problem that does not exist, but which they are using to further their argument.
Geraint Davies
The hon. Gentleman is kind to give way; others would not. He may know that satellite data on fugitive emissions of methane in the United States shows that 5% of methane from fracking has leaked. As methane is 80% worse for global warming than carbon dioxide, that makes fracking worse than coal. How can anybody who is serious about net zero support fracking?
Alan Brown
The hon. Gentleman has made the point very well, and it is one of which we need to take cognisance. We have to doubt the Government when they say they are committed to net zero by 2030. We have to wonder how serious they are about that. They know that 2030 is a while away—it is future Governments away—so they can do what they want now, and pretend they are still in favour of abiding by that net zero commitment.
Even if we accept some of the Government’s arguments, the exploration and appraisal phases of a fracking site last for, roughly, between two and five years, so it is not possible that fracking can produce any sort of quick-fix solution to the problems that they think they are trying to solve.
If this Tory Government are so worried about people’s energy bills, they must ask themselves why they did a screaming U-turn on the so-called energy price guarantee this week. The Prime Minister had told us previously that she would prevent household energy bills from rising to an astonishing £6,000 a year, but presumably the UK Government now believe that—unfortunately for the majority of households in the UK—bills might rise to that level at some point after April 2023, when they are scrapping the guarantee. They may not think the bills will become that high, but the energy prices paper produced by the Department for Business, Energy and Industrial Strategy contains an estimate of £4,400, and other papers produced this week speculate that average bills could easily hit £5,000.
Even if the Government introduce measures which they say will protect the most vulnerable, bills as high as that—allied with record inflation—will still cause misery to millions of people. These are, of course, households that have already seen mortgage rates and costs increase as a direct consequence of the Prime Minister’s ideological mini-Budget. Bad decisions made by the Government are already affecting household expenditure, and such measures are obviously not the solution. National Energy Action estimates that even under the current support scheme, with average household bills of £2,500, 6.7 million households will be in fuel poverty, and it is clear that if bills became much higher than that, millions more would be in that position. A year and a half ago, when the price cap set bills at an average of £1,100, constituents of mine were already struggling, and some were in fuel poverty. If the bills go up by much more, there will be misery for many. Fracking does nothing to help them in the here and now, and I urge the Government to start thinking about the support that they will have to provide to bring household energy bills down for people.
Other measures that should be taken include energy efficiency installation. The Government need to increase, massively, their commitment to upgrading homes to the target of EPC band C. Energy efficiency installation clearly reduces energy demand. It reduces reliance on gas, at least for energy generation, it brings down household bills, and it creates jobs.
As for energy security, it is not so long ago that the UK Government blocked the six years of onshore wind development. Given that onshore wind is the cheapest form of energy generation, they have arguably added costs to consumers’ bills. That form of electricity generation could have reduced reliance on gas, and on imports, in the UK, so why was onshore wind development banned? It is because some loud Tory Back Benchers were against wind turbines, and the Government used that—and some voices in the community—to argue that local consent for the turbines was not there. That was using a few people to destroy local democracy. In fact, it was local democracy in reverse: overturning offshore wind development across the UK was imposing the view of a few people in the shires, and elsewhere in the UK, and making energy more expensive for the rest of us.
Sammy Wilson
Does the hon. Gentleman agree that the main reason people are opposed to onshore wind is that it is extremely land-intensive? Compared with the area that 10 fracking pads would take up, 725 times more land would be required for windmills, which are of course a blot on the landscape.
Alan Brown
I thank the right hon. Gentleman for that intervention, and for proving where he is on the whole climate change denial aspect. Studies and surveys show time and again that people are in favour of onshore wind, and we know that people are against fracking, so his argument is completely at odds with what the public think, and probably what his own constituents think.
On energy security and further reducing reliance on gas, the Government need to introduce a pricing mechanism for pumped storage hydro. Dispatchable energy is one way to hit peak demand. SSE already has all the permissions in place. The funding is there to build the Coire Glas scheme in the highlands. All that is needed is a funding mechanism. The predecessor of the Secretary of State said at an evidence session of the Business, Energy and Industrial Strategy Committee that the Government had not agreed a pricing mechanism and were not doing anything on it because it was a predominantly Scottish technology. I urge the new Secretary of State to get over that mindset, and to realise that pumped storage hydro is for the good of the grid and the good of the UK as a whole.
Jamie Stone
The bit of the jigsaw that would be helpful to both the Scottish and UK Governments is floating offshore wind production. We have the skills in Scotland for all parts of fabrication, and we have some of the mightiest oil platforms ever built. Surely that is the way forward. Finally, to repeat my point, electricity generated out at sea could be taken in and lead to the generation of green hydrogen.
Alan Brown
I agree wholeheartedly with the hon. Gentleman, and I recommend that he reads the report by Landfall Strategy Group, which illustrates that Scotland could have 385,000 jobs created in the future by developing a green hydrogen strategy. That would certainly benefit his constituency. I have been up to the port in Eigg, and it is fantastic to see what its plans are for the future.
There is so much more that the Government can do. Fracking is not required, and it is not the answer to reducing people’s energy bills. It certainly will not do anything to help the transition to net zero. It is opposed by the majority of the public. Seemingly just a few people in the Government are trying to force their will on the rest of Parliament, and possibly these communities.
Simon Baynes (Clwyd South) (Con)
The Secretary of State has brought a proposal to the House. There is clearly disagreement across the House on the issue, but at least he is opening up an honest debate on a very important matter.
The hon. Gentleman has made a number of criticisms of the Government’s general energy policy. I would like to know how the SNP will balance out energy security, given that it opposes nuclear, and oil and gas exploration.
Alan Brown
Scotland is already a net exporter of oil and gas, and the equivalent of our domestic electricity consumption is already generated with effectively 100% renewable energy. We export electricity, so it is clear that in terms of energy Scotland can stand on its own two feet. It is time that we are able to realise the benefits of being such an energy-rich country, because right now it seems to me that the broad shoulders of the UK are preventing us from realising the benefits that we should have.
The SNP has introduced a ban on fracking. We will not issue any fracking licences in Scotland. I would like to think that the UK Government will respect that aspect of the devolution settlement and not try to overturn what we are doing in Scotland. If they do so, it will add a further few percentage points to those who believe that independence is the future for Scotland.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
I have already indicated that there is a six-minute limit, but because of the pressure on time, and because I want to be fair to everybody, the limit will be six minutes for Mr Menzies and Barbara Keeley, and then drop immediately to four minutes so that we can get as many people in as possible. I call Mark Menzies.
Mark Menzies (Fylde) (Con)
As always, it is a great pleasure to follow the hon. Member for Kilmarnock and Loudoun (Alan Brown). Anyone listening to us can tell that we clearly come from the same part of the world.
The matter before us today is of great importance to my Fylde constituency. I begin by saying to those on the Treasury Bench that my vote today is very much conditional on what the Secretary of State has already said and on what the Prime Minister said to me at Prime Minister’s questions. The moratorium was a manifesto commitment that each and every Conservative Member stood on, campaigned on and was elected on, and it is no secret that I would much rather the moratorium remained in place.
The manifesto commitment said:
“We will not support fracking unless the science shows categorically that it can be done safely.”
We in Fylde will not forget that fracking in our communities has twice led to national moratoriums. For people in Fylde, this is not a debate of what might happen; it is about not repeating events that have happened. Those events impacted on our countryside, our people, our homes and our communities.
I continue, as I always have, to take an evidence-based approach, but the geology has not changed; neither has the science. The industry has had more than a decade to show that fracking can be carried out safely in Fylde. Every time it has tried, the same thing has happened. We cannot keep doing the same thing, hoping for a different outcome. The 2019 seismic event proves that. The only conclusion I can reach from the evidence is that Fylde and its geology remain wholly unsuitable for fracking.
If this motion remains unamended, I simply cannot support it today. As someone with genuine concerns, I thank the Labour party for giving the House the opportunity to debate this critical issue, but I am afraid that the motion goes too far. Simply taking control of the Order Paper is not something I can support. Just as I opposed it during the Brexit votes, I am unwilling to reopen that Pandora’s box. Once we do that, where on earth does it end?
My only objective is to get the right outcome for the people of Fylde. I gently remind the Labour party that it was the last Labour Government who issued the fracking licences in Fylde. They issued those licences without the gold standard of regulation for which I fought for many years and secured. That includes the traffic light system and the seismic limit of 0.5, and the fracking industry signed up to both.
The 2.9 event in Preston New Road in August 2019 was 251 times more powerful than the industry’s own safety limit. In reply to me this afternoon, the Prime Minister mentioned that she will look at the regulations. Well, I urge her and the Government to ensure that any look at regulations has, at its heart, the desire to maintain a safe approach to seismic limits.
If the industry were to have its way and the limit were raised to 3.5—bearing in mind that Preston New Road was 2.9—the limit would be 1,000 times more powerful than the previous limit of 0.5 and four times more powerful than the August 2019 event that led to the second national moratorium.
My vote is based on the good faith that the Prime Minister has shown me and my constituents over recent weeks, and the promises that she made earlier in this House. The Secretary of State for Business, Energy and Industrial Strategy is very excited by the prospect of local compensation and incentives to local communities, but he should not confuse that with the thought that communities can be bought. The people of Fylde are not for sale and their principles are not up for auction. They will look at this on the facts and the safety merits first and foremost.
Yasmin Qureshi
The hon. Gentleman may not be aware but, when fracking was happening in Fylde, I went out there to protest against it. He talks about carrying the people, but Bolton South East and the whole north-west have been against fracking. The Secretary of State is listening, and I tell him that we in the north-west do not want fracking.
Mark Menzies
I thank the hon. Lady for her intervention, and the point she makes is a powerful one that stands on its own.
In his letter, the Secretary of State has confirmed that the Government will launch a consultation next month to assess how local consent is to be gauged and has committed to put this vote to the House—I welcome that. I also welcome the fact that he has agreed today to ensure that there is, in effect, a local veto—or whatever words people wish to use for it—and that the voices of the people in Fylde will be listened to in a fair, transparent and independent way. I thank him for listening to them. It is not up to the fracking companies to determine whether local consent exists; an independent, transparent alternative to that must be found, and I thank those on the Treasury Bench for agreeing to it. May I also make it clear that it is important that the local planning process must remain in place and that we rule out any nationally significant infrastructure projects referral? If we are committed to localism, I can think of no more important issue than the one before the House today.
Ultimately, I am able to vote for the amendment because I believe that the people of Fylde share my conviction that the answer from our communities is no to fracking, and when they say no to fracking, I expect the Government to deliver and to hear that no does mean no.
Wera Hobhouse (Bath) (LD)
Does the hon. Gentleman agree that this is about not only seismic activity and local consent, but climate change, and that the Government should listen to the Climate Change Committee and produce a report about the climate impact of fracking?
Mark Menzies
The hon. Lady makes an important point.
On energy security, let me say that there is nobody more committed to it than myself; we manufacture all the nuclear fuel for the UK in my constituency, at Westinghouse. But in order to make up the shortfall of the amount of gas we import, we will be looking at drilling somewhere in the region of 6,000 to 10,000 wells. The quantities we are talking about are astronomical and the timescales involved mean we are not going to get gas into the network any time in the next two years. There is no infrastructure to get the gas from these wells into the grid. The alternative is building gas-fired power stations to turn this into electricity and feed it in through wires, but again the timescales involved simply do not exist. So the energy security argument, important though it is, does not even stack up in the timescales the Government are talking about.
In conclusion, I welcome the fair, transparent and meaningful consultation that both the Prime Minister and the Secretary of State have committed to today. That gives the people of Fylde the opportunity to reject fracking and, more importantly, to have their voice heard.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
On a point of order, Mr Deputy Speaker. The Home Secretary has been sacked or has resigned this afternoon—this is utter chaos. The Prime Minister appears to have appointed and sacked both a Chancellor and a Home Secretary, two of the great offices of state, in the space of six weeks. This is no way to run a Government. Have you had any indication from the Prime Minister that she will come to this House to answer questions arising from this?
The former Home Secretary, the right hon. and learned Member for Fareham (Suella Braverman), says in her resignation letter that she sent
“an official document…a draft Written Ministerial Statement about migration, due for publication”
from her personal email, and that this was against the rules. This raises huge questions about why a Home Secretary who was responsible for security was breaching basic rules. There are also rumours that in fact this statement on migration had not been agreed across the Government, there were major disagreements and that it had been blocked by the Chancellor. She also says in her letter that she has
“concerns about the direction of this government”
and the breaking of “key pledges”. She says very pointedly that they have made mistakes and that
“hoping things will magically come right is not serious politics.”
There is clearly huge chaos at the heart of the Government. Home affairs is far too important for this kind of chaos. This is about security, public safety and the issues covered by the great offices of state. Given that the Government seem to be imploding, we clearly need not simply a change of Home Secretary, but a change of Government. Can we get a new statement to this House?
Mr Deputy Speaker (Mr Nigel Evans)
I thank the right hon. Lady for her point of order and for advance notice of it. I was made aware of the departure of the Home Secretary in the usual way, but the right hon. Lady is asking whether I have been notified in the usual way as to whether there will be a statement. I have not been notified as such, but should the situation change, Members will be notified via the annunciators and other means. As it stands at this moment, there are no statements to be made today.
We are still on the six-minute limit, and then we will drop to four minutes. I call Barbara Keeley.
Barbara Keeley (Worsley and Eccles South) (Lab)
Thank you, Mr Deputy Speaker.
Fracking is an outdated, dangerous and expensive way to produce energy. It causes disruption and distress to local communities and, crucially, it will not provide the clean, secure energy that our country needs, as laid out very effectively by my right hon. Friend the Member for Doncaster North (Edward Miliband) when he opened the debate.
I have a former exploratory site for fracking at Barton Moss in my constituency. The energy company IGas drilled the site to a depth of about 10,000 feet in an exploratory exercise over the course of six months between 2013 and 2014. During that time, there was much local opposition and a fierce protest, which resulted in months of demonstrations. Some 150 police officers were involved in policing the protest every day, and a total of 120 people were detained. Greater Manchester police had to pay £1.7 million for the cost of policing the protest, which came out of our local policing budget. At the time, the Manchester Evening News ran a survey of 2,500 local residents, which showed that over three quarters of local people were opposed to fracking.
I want to explain why I have always opposed fracking and why the reasons for my constituents’ opposition are so justified. Some of the issues are local to Barton Moss. The exploratory fracking site is close to an area of raised peat bog, which is a rare and precious resource where it has not been ruined by over-extraction. There are real concerns among my constituents about dewatering the precious mosslands and the harmful effects of pumping water into underground rock to force out the shale gas in this mosslands area. People are also very concerned about air pollution, which is particularly worrying at Barton Moss because the site is next to the M62 motorway—itself a cause of high levels of pollution. Other environmental risks are not specific to Barton Moss, but they have an extensive evidence base.
I want to quote from a report by the Tyndall Centre for Climate Change Research, which was produced by local academics at the University of Manchester. It says:
“The depth of shale gas extraction gives rise to major challenges in identifying categorically pathways of contamination of groundwater by chemicals used…in the extraction process.”
An analysis of those substances suggests that many have
“toxic, carcinogenic…or other hazardous properties. There is considerable anecdotal evidence from the US that contamination of both groundwater and surface water has occurred in a number of cases.”
Perhaps the Government should listen to their own experts. A few weeks ago, the British Geological Survey published a report on fracking, which was commissioned by the Government. It said:
“Hydraulic fracturing can trigger earthquakes large enough to cause structural damage. These events were not predicted in advance of operations.”
Clearly, the science does not show categorically that fracking can be done safely. For the Government to allow fracking now therefore breaks another election promise.
Caroline Lucas
The hon. Lady was speaking earlier about the protests in her constituency. I am perhaps the only hon. Member of this House to have been arrested, tried and acquitted for protesting about fracking. Does she share my concerns about the Public Order Bill, which was passed yesterday? Peaceful protest, which is entirely legitimate, against things like fracking might well be closed down by that draconian piece of legislation.
Hilary Benn (Leeds Central) (Lab)
My hon. Friend is making a very powerful case on behalf of her constituents, but does she share my puzzlement about this? The Government have made a screeching U-turn today and finally committed to a local veto. Every Member who has spoken representing areas where there has been fracking or there might be fracking has made it quite clear that there is no prospect of getting local consent; there will be a veto everywhere. Why are we going through this whole process when every one us of knows what the outcome will be?
Barbara Keeley
It is as much of a puzzle to me as it is to my right hon. Friend.
Going back to the report of the British Geological Survey, on the same day on which it was published, the Secretary of State for Business, Energy and Industrial Strategy announced his intention to revisit the safety limits on fracking. He said that
“tolerating a higher degree of risk and disturbance appears to us to be in the national interest”.
I do not know whether that answers my right hon. Friend’s question, but it is weird. Now the Secretary of State’s amendment to the motion indicates that he will seek
“clear advice on seismic limits and safety”.
Which is it—tolerating earthquakes and dangerous tremors, or listening to the evidence commissioned by his own Department?
Fears about pollution, contaminated water supply and seismic events are by no means far-fetched. An earthquake caused by fracking near Blackpool measured 2.9 on the Richter scale. It led to the works being stopped immediately and the company responsible apologising.
Other concerns about drilling for shale gas extend beyond the environmental. In 2014, a Department for Environment, Food and Rural Affairs report forecast that house prices were likely to fall by up to 7% within a mile of fracking wells, and that the price of house insurance would also rise within five miles of fracking wells. It is right that we end our reliance on Russian oil and gas, but fracking is neither the solution nor part of the solution. The Government should instead be focusing on boosting the UK’s use of renewable and nuclear energy.
Fracking is an issue of great importance to my constituents and a vote on it should not be used as a confidence vote by this failing Conservative Government trying to bully their Members into line. There is an alternative. Labour’s plan for energy would quadruple offshore wind and double onshore wind capacity. Instead of blocking new solar projects, as the Prime Minister is planning to do, Labour would triple solar power, which is up to nine times cheaper than gas. It is irresponsible to revisit the question of fracking when we know that it will have profound environmental impacts and make life very difficult for those people living near a fracking site. It is ignoring what happened in the past. It is ignoring scientific and expert opinion. It is reckless and it is dangerous.
The flimsy measures in the Government’s amendment to today’s motion are another case of their moving the goalposts to achieve their own ends. Before it was about safety, but the report that they commissioned is not to their liking. Now it is about consent, but the Secretary of State should know that we already have
“a robust system of local consent”.
It is called listening. I know that my constituents do not want fracking, because they have made it very clear indeed. When will the Government respect the evidence, respect the experts and respect the public, and finally put the threat of this awful process of fracking to rest?
Craig Mackinlay (South Thanet) (Con)
We often wonder why we in this House are not taken very seriously. I will tell Members why. We are in the depths of an energy crisis. We have shown ourselves—Europe as a whole—to be too reliant on a dictator who has been conducting an illegal war, and the problems have come home to roost. Here we are speaking about trying to ban a source of domestic energy while we are short of it, and we wonder why people out there think that we are stark staring mad.
Of course, today’s debate is not about fracking—it is not about fracking at all—but about taking control of the Order Paper. We have seen that before during the height of the Brexit wars. My dear friend the right hon. Member for Leeds Central (Hilary Benn) was part of that. I am really sorry that the right hon. Member for Doncaster North (Edward Miliband) is not in his place. I did try to intervene on him, but he did not show me the courtesy of taking my intervention. If he had been in his place, I would have shown him that courtesy now.
There are a couple of things that need to be said. It has been said here that fracking will make no difference to the price of gas. I do not know about anybody else in this House, but when I did O-level economics, the first week—no, probably the first lesson—taught me that if we put more supply of something into a system, the price tends to come down. Further than that, even if Labour’s economics are true and the price will not change, would one rather spend tens of billions of pounds per year on foreign imported liquefied natural gas, even at a high price, or spend that money at home? That is a very clear decision.
Craig Mackinlay
No, I will not give way; I do not have time today, and others have not done it for me— [Interruption.] Oh—yes, if the hon. Lady will please intervene, it gives me another minute.
Wera Hobhouse
Has the hon. Gentleman not listened to his own colleague, the hon. Member for Fylde (Mark Menzies), saying that it would take at least two years to get any fracking going, or to his other colleague, the right hon. Member for Spelthorne (Kwasi Kwarteng), who said just a few weeks ago when he was still Business Secretary that no amount of fracked fuel in this country would make a difference to the global gas market, because the quantities are too small?
Craig Mackinlay
I thank the hon. Lady from the Liberal Democrats for that point. I remember a former leader of the Liberal Democrats saying, about 12 years ago, “What is the point in nuclear?” because it would take 11 or 12 years to get it on stream. I think that 10, 11 or 12 years on from 2010 would be about now, and that would have been quite useful. Of course, it will take time to get fracked gas out of the ground. The best time to have done it was a few years ago; the second-best time to think about it is now.
I refer hon. Members to a House of Commons Library report dated 14 January this year, called “The energy price crunch”. As ever, House of Commons Library reports are excellent, and this one was very clear. Table 4.2 shows a very easy chart, which I will describe to hon. Members. It shows the output of UK-produced gas from the North sea, which peaked around 2004, when we were net exporters of gas. Since that time, we have been using only about 75% of that peak usage, and that may be for many reasons. We may have better-insulated houses, and that is to the good. I feel pretty sure that one of the main reasons is that any energy-intensive business has simply offshored somewhere else, but let us put that aside.
What has happened, very distinctly, is that we are now only producing one third of what we did at peak. We are using 25% less, but we are producing only one third of what we once did. Where do people think that gap is being filled from? That gap is being filled from international resources. There are three countries alone, forgetting Norway: £64 billion we have spent over the past 10 years on importing LNG from Russia, Qatar and the United States.
Surely it must be better to have those tens of thousands of jobs at home, as well as the many billions in investment and the profits and tax revenues—remember those? They are pretty helpful; they pay for things such as the NHS, or perhaps the insulation that we would all very much support. What would also be quite useful is balance of payments, because we have always run a pretty bad show on that. But if CO2 is your thing—it is certainly my thing—why are we importing LNG and emitting 5 million tonnes of extra CO2 just in the process of importing it, rather than doing it domestically?
This debate is a valid one—it is happening for other reasons, which we are all very aware of, as shown by Labour—but I support fracking. Let us give it a go. There is no Government money involved; it is all private.
Bill Esterson (Sefton Central) (Lab)
Lancashire County Council’s ecology adviser described Aurora’s assessment of earthquake risk at the Altcar Moss fracking site as
“superficial, outdated and not justified”.
My constituents in nearby Formby agree with the ecology adviser. Their houses shook when tests were carried out. My constituents have been saying for years that the Conservative plan is a charter for earthquakes, because that has been their experience, as it has been elsewhere nearby in Lancashire. Conservative MPs stood on a manifesto that said:
“We will not support fracking unless the science shows categorically”
that it is safe. Changing the safety threshold does not change the level of risk, and changing the safety threshold when the science has not changed will not convince my constituents or people across the country.
I can tell the Government that people in Sefton and in west Lancashire will not support fracking, and if the Government think they can manipulate fake consent, people simply will not be fooled. As for the environmental impact, the Environment Agency says that contamination of groundwater has not been addressed by fracking companies. Natural England says that fracking applicants have not produced evidence that their plans would have no significant effect on wildlife.
I turn to the Government’s claims. First, on the gas price, fracking will not help because the price is set on the European market. Secondly, on the immediate challenge of supply, fracking will take time to produce gas even if the Government choose to ignore local people. It will not deliver in the short term. Thirdly, on the climate, producing more fossil fuels will just make the climate crisis worse. Have we not seen enough evidence of the acceleration of the climate crisis, with storms, floods and extreme heat in this country, let alone around the world? We need to do everything we can to end our reliance on greenhouse gas-producing fuel. Introducing fracking will add carbon emissions to our atmosphere. Fracking is climate action delay, and to delay is to deny the reality that we face a climate disaster and all its consequences unless we act with all speed.
The only sensible way forward is to invest in wind and solar to deliver renewable electricity self-sufficiency, as the Opposition would do by 2030; to invest in insulating 19 million homes; to invest in new nuclear, in tidal, in hydrogen and in carbon capture and storage; and to create a publicly owned Great British energy company that we can be proud of and that will deliver in the national interest. Labour’s energy plan would lead to a million jobs, lower bills and energy security. Labour’s long-term plan will create a world-leading renewable energy industry that enables us to export our technology around the world.
Our plan is the right way to address the energy challenge. Fracking, whether in Formby or anywhere else in Britain, is completely the wrong way. My constituents are right to oppose fracking. Labour in government will make that investment in renewable energy and ban fracking for good.
Mr Robin Walker (Worcester) (Con)
I do not support ending the moratorium on fracking, because I do not believe that new scientific evidence has yet emerged to justify doing so. It has been welcome to hear the Prime Minister and the Chancellor talking in recent days about the importance of our 2019 manifesto, and I agree both with the triple lock on pensions and the moratorium on fracking. I support the UK maximising the domestic supply of gas, as the Secretary of State has said, to support the transition to net zero. I support the production of new technologies for heating, including hydrogen, and I agree on the importance of our supplies for energy security, but we should do those things in ways that are proven to be safe.
I will not vote for the Opposition motion, and I urge all Conservative colleagues not to do so. It is a blatant attempt to seize control of the Order Paper, as the Opposition tried to do so many times in their efforts to thwart Brexit. I welcome the assurances of my the Secretary of State for Business, Energy and Industrial Strategy, my right hon. Friend the Member for North East Somerset (Mr Rees-Mogg) that there will be consultation with parishes, councils and other local bodies to ensure that there is a tough requirement for local consent, but there cannot really be such a thing unless local planning committees can simply say no. If they do, I cannot see how fracking is ever likely to impact on energy prices, certainly not in time to have an impact on heating costs this year or the next.
I therefore want to put on record my concerns and those of thousands of my constituents. Let us take action to help people with the cost of living, protect our environment and deliver on our 2019 manifesto.
Ms Lyn Brown (West Ham) (Lab)
Frankly, it is becoming difficult to adequately express my horror at the state of this Government. Every single decision seems calculated to destroy—to destroy our economy, our public services, our international reputation and our environment. This utter nonsense about fracking is another example.
Truth is, there is very little prospect of fracking in West Ham, and I do not think our communities will be affected by consequent earthquakes or polluted water supplies, but in recent weeks I have had loads of emails from constituents extremely concerned about the direction the Government are taking. They are worried about the communities that could be affected, because they know how local consent can be and is manipulated to suit the agendas of the powerful. My constituents point to the constant Tory failure to prevent vile sewage pollution and ask why anybody would trust the Government when they say that fracking wells will not destroy local water supplies. The Tories have proved time and again that they are simply not willing or able to stop greedy companies, whether privatised water utilities or frackers, from destroying our environment in the pursuit of profit.
The issue of fracking is about the safety of our world and the future of our children, so of course the people of West Ham want to have their say. They do not want us to respond to the cost of living crisis simply by increasing our dependence on the exact same technologies that caused it. They do not want to pretend that fracking can make a difference to energy costs without blighting our lives, because it will not. My constituents want us to get to work on speeding up the green transition they have been promised. They point out, quite rightly, that wind and solar power are enormously cheaper than gas, and that these technologies are getting more and more efficient with every passing year.
In this place, we need a focus from the Government to plan, to invest and to lead partnerships with green business. We know that if we do that, there will be huge economic benefits in terms of lower energy bills and jobs in all our communities, and we can slash our dependence on fossil fuels from Russia and other anti-democratic bullying states. We cannot move away from that dependence by extracting fossil fuels at home; there are not enough of them, and the costs—social, economic and environmental—are too high.
In addition, we are rapidly approaching COP27. Effectively, we are asking and expecting poor African states such as the Democratic Republic of the Congo to do the right thing and develop their economies with the minimum amount of dirty energy. We are talking about countries that have much larger fossil fuel reserves than we do, enormously lower emissions than we do, and much higher vulnerability to climate heating than we do, and we are asking them to choose a greener path to development when Ministers here shamefully talk about extracting “every last drop.” It is madness as an energy strategy. It will be devastating for local communities, who transparently do not want it, and it drives a wrecking ball through the patient climate diplomacy that this world desperately needs.
Richard Graham (Gloucester) (Con)
There is of course one great example of fracking in West Ham—fracking good football, which many of us watched at Upton Park and now at the new stadium.
Today’s is an interesting debate. Unfortunately for all the eloquence of the right hon. Member for Doncaster North (Edward Miliband), who made in many ways a very good speech about some of the hazards of fracking, it has been spoiled by the three and a half pages of the Order Paper that are all about a procedural takeover of this Chamber, which straightaway rules out voting for the Labour motion.
In an interesting contribution, the SNP spokesman, the hon. Member for Kilmarnock and Loudoun (Alan Brown), focused on the fact that in his view there is no support for fracking anywhere in the country. That view has been echoed by several Opposition speakers. Now, I do not support fracking. I do not think it should happen and I do not think it will happen, but this is a democracy, and it is perfectly possible that there are parts of the country—it might be South Thanet or Ashfield, although not the centre of the City of Gloucester—where people might support it. That is where the question that the right hon. Gentleman himself raised in 2013, and which the leader of the Liberal Democrats has previously said is vital, must be addressed: the question of local consent. I think that the Secretary of State is on a journey on this. He started, frankly, by assuming that local consent could be a consultation done by the fracking company with a few houses around where a fracking site might be. That was clearly not sustainable—it is not genuine consultation and does not take into account enough views.
My view, for what it is worth, is that there are two crucial elements of local consent, which I hope the Secretary of State will bring back to the House after his consultation. First, planning should be controlled locally and not by the inspectorate nationally. Secondly, local councils should be recognised as the expression of local democracy. That is absolutely at the core of compassionate Conservative values and is a view shared by many hon. Members on both sides of the House. A vote by a full council is the most important part. Along with those two considerations—I hope that the Whips are listening; they are talking among themselves—it is crucial that we have a free vote, on the Floor of the House, on the local consent definition, to give all hon. Members confidence that there will be no fracking in any constituency unless there is absolute local support.
Jamie Stone
I am sorry that there are no Scottish National party Members present, because it may interest the House that, when councils in Scotland make a planning decision—for instance, to refuse a wind farm application—it is quite frequently overturned by the Scottish Government. The rhetoric about local power can be hollow.
Richard Graham
The hon. Member makes a good point and it is disappointing, in a way, that SNP Members are not present to hear that, because they are huge supporters, in theory, of renewable energy.
A great deal that the Secretary of State has said and written about renewable energy, not least a very good article in The Guardian a week ago, is excellent and is something that we would all get behind, as would, I suspect, all Opposition Members. I would love him to do more to support tidal lagoons, which could have been done by now in Swansea; it seemed expensive at the time, but it is good value now. There is more that can be done on marine energy, which contributes to baseload. There are lots of other things, such as rules about onshore and floating offshore wind, about which he is absolutely on the right track and so are the Government. Hon. Members and the wider public should recognise that the Government are doing a huge amount on renewables, but the question of local consent on fracking is crucial.
Sir Greg Knight
On the question put to my hon. Friend by the Liberal Democrats, is the answer not my suggestion that, in fracking applications, we remove the right to appeal to an inspector and allow the local planning authority to be their final determinant?
Richard Graham
My right hon. Friend is absolutely right—Yorkshiremen so often are, as the Minister knows. Local planning approval should absolutely be at the heart of the definition of local consent.
Simon Hoare
The Secretary of State used the word “veto”, not objection, so there is no business of appeals or anything else. If the local community vetoes it, it is dead—strangled, kaput.
Richard Graham
I think we are all broadly in agreement on that; I hope that the Minister is in listening mode.
The perfect solution would have been to get back to the 2019 manifesto, as the Prime Minister has urged us to do in many instances. That would have taken us back to the moratorium, which was a settled position that the whole country accepted. None the less, I recognise that some hon. Members think there may be virtue in fracking. As the Secretary of State likes to say—his nine-word mantra—everything has changed because of Putin’s invasion of Ukraine. That is true, and there may be worse to come—who knows what nuclear weapons might be deployed and what impact that might have on energy and all the rest of it.
We should accept, as should the Labour party, that there may be a role for shale gas should the scientific evidence support it and should local consent indicate that communities support it. It is fair enough for the Secretary of State to say that we should look at it, but I urge him to have a free vote on the definition when it comes back to the House.
Cat Smith (Lancaster and Fleetwood) (Lab)
Fracking—again! To be honest, since the moment I was elected to this House I have spoken in probably every single debate on this subject, because for my constituents in Lancashire this is something that really matters. It has a tangible effect on their lives with the fracking application on Preston New Road, and with Roseacre in the constituency of my friend the hon. Member for Fylde (Mark Menzies). This matters because of the climate emergency, which we risk losing sight of if we keep focusing purely on tackling the energy crisis and the cost of living crisis. Important as they are, we cannot forget that the planet is burning. Therefore, in all the conversations we have about energy, we must bear in mind that there is a climate emergency that needs to be addressed.
For a bit of background, after I was elected in 2015, Lancashire County Council passed its first motion opposing fracking, which was followed three months later by Lancaster City Council passing a motion against fracking. Then Cuadrilla got permission and started fracking at Preston New Road, and at that point there were subsequent motions objecting to fracking in councils across the county, including Lancaster City Council’s second motion. It was clear that there was cross-party consensus and huge public dismay about fracking, which is why, when during the general election of 2019 the Conservative party changed its policy and stood on a manifesto pledging to ban fracking, there was a sense of widespread relief in our red rose county.
There was cross-party consensus, and the people of Lancashire thought that the issue had been put to bed—they thought they could be safe knowing that there would not be earthquakes and there would not be fracking wells littering the Fylde coast—but, no, fracking is back, and we still do not want it. Local councillors of all political colours are backing motions at councils right across the county. Those include, this week alone, one at Fylde and one at Lancashire County Council, with both those Tory-run councils voting unanimously to pass anti-fracking motions. Councillors are telling me that they do not understand what this local consent looks like, so I suppose my question to the Minister is: what on earth does he mean by local consent? Many people have been very concerned by the Business Secretary’s comments at the Conservative party conference, when he talked about fracking companies going door to door to canvas support for fracking. I do hope that that will not be included in the consultation, and I would like the Minister for Climate to rule that out in his closing remarks in this debate.
The people of Lancashire do not want to have fracking forced upon them. Yes, we live in tough times and, yes, energy bills are going up, but fracking will not solve the energy security or price issues the UK currently faces. We need the Government to put far more energy into looking at energy demand reduction, such as home insulation. Frankly, the only viable long-term route to lower bills and energy security is to get off fossil fuels. Fortunately for the Minister, the answer is staring us clear in the face, because forms of clean energy such as solar, wind, tidal, hydrogen and nuclear are all options that this Government should be throwing their full weight behind.
That is why the last Labour leadership at Lancaster City Council led the way in installing solar panels on public buildings, such as our Salt Ayre sports centre. It is why the big employers in my constituency, such as Lancaster University, are seeking permission for more wind turbines. It is why local businesses such as NanoSUN in Lancaster, are looking to harness hydrogen, and it is why the nuclear power stations at Heysham 1 and 2 provide my constituents with thousands of jobs. Lancashire will play its part with enthusiasm in a green energy revolution. We know it makes sense when solar and wind power, for example, are nine times cheaper than gas, but fracking? No, thanks. Fracking is expensive and unsafe, and we know that communities in Lancashire do not support it.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. As the House can see, a great many people wish to speak and we have very little time left, so after the next contribution I will have to reduce the time limit to three minutes.
Alexander Stafford (Rother Valley) (Con)
I rise to reaffirm my opposition to fracking in Rother Valley. I believe I am the only colleague in the House who not only has two potential fracking sites in my constituency—Harthill and Woodsetts—but actually lives in one of the villages threatened, Harthill. My position since being elected has been consistent: I oppose fracking in our area. Indeed, it was the very first thing I spoke about in the House of Commons Chamber after being elected, and I rebelled against the Government on the issue in May 2021, being the only Conservative to vote to ban all fracking, including exploration.
I was therefore looking forward to reconfirming this in the House today, but the motion before us is not about fracking; it is about confidence in this Government. It is about who runs the country—the elected party, the Conservatives, or Labour, which lost the general election. This, unfortunately, is a cynical attempt by Labour to play party political games. This is not a game. These are people’s lives. These are people’s communities. This is a dastardly, cynical move to create division, and to weaponise the issue rather than working together on a cross-party basis to put in a ban on fracking. That is what is wrong with the state of our politics. All that matters is cheap points—[Laughter.] Labour Members are laughing at people in Harthill; they are laughing at people in Woodsetts. This is cheap point scoring, ultimately chasing misleading headlines rather than working with us on this side of the House to make better policy for our communities.
Fracking is unnecessary, harmful to the environment, and it will have no impact on international gas prices. It is yesterday’s technology, not an answer to today’s problems. I have had several meetings with the Secretary of State for Business, Energy and Industrial Strategy on this matter, and we heard him today in the Chamber. He has made it crystal clear that there must be a majority of local independent community support for fracking to proceed—he used the word “veto”. Let us be honest: in some parts of the country there may indeed be that support. I am the elected Member of Parliament for Rother Valley. I am not the Member for the Rhondda—I represent Harthill, not Hartlepool, and Woodsetts, not Woking. Who am I to dictate to the rest of the UK what other communities want? That is undemocratic.
In my local villages there is no community support for fracking, and today we have been given a cast-iron guarantee that these changes will at last put communities, even down to parish level, at the heart of any future decision—no more worries about the changing nature of Government, and those directly affected by this issue will ultimately have the final say. That is correct. Harthill and Woodsetts are riddled with old mine workings, and the fault lines are already severely weakened by coal extraction, right beneath where companies wish to frack. My constituents do not wish to live next to an industrial site. The traffic movement associated with fracking presents a huge risk to pedestrian safety, and could destroy local flora and fauna and ruin the unspoilt countryside. The proposed site in Woodsetts is only yards away from residential homes of the elderly and vulnerable, which is deeply depressing.
Let me again be clear: I am against fracking in Rother Valley, but I am also against this disgraceful attempt by Labour to overturn the Government. The policy the Government have announced today gives more power to local residents to reject fracking—I want them to reject fracking. I reassure the House that when there is the local community vote, and the vote that actually matters to communities—and as a resident of Harthill I will get a vote—I will not only vote against fracking in Rother Valley, but I will be leading the charge against it.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. We are now on a time limit of three minutes.
Tim Farron (Westmorland and Lonsdale) (LD)
I am grateful, Madam Deputy Speaker. Why on earth would the Government seek to perform another manifesto U-turn and support fracking—their amendment effectively lifts the moratorium on fracking? Two reasons are stated. One is an attempt to drive down energy prices, and the other is to tackle security of supply. Those are two massive issues. There is enormous energy poverty in my constituency in Cumbria, and everybody is rightly worried about the lack of energy security, particularly given the evil actions of President Putin. But if those were the real reasons, one would not pick fracking, and I am astounded and bemused as to why the Government have done so.
The right hon. Member for Spelthorne (Kwasi Kwarteng), former Chancellor of the Exchequer, stated that fracking would not materially affect the market price of gas. That is obvious, so that is pricing out the window. The fracking industry lobby group stated that shale gas would contribute less than 1% of Britain’s gas needs, and the British Geological Survey stated that shale gas under the United Kingdom is 15 times less in volume than originally thought. Fracking will have no impact on price, and it will do nothing meaningful when it comes to volume.
What fracking will do is add another fossil fuel into the mix at a time when we should be keeping all fossil fuels in the ground. Of all the threats that we face as a country and a community, climate change is undoubtedly the greatest, and fossil fuels should be kept in the ground. Fracking will also create massive seismic risk. The north-west of England, Cumbria and Lancashire, are two of the most geologically active places in the country. Fracking is madness. Opting for fracking is divisive and expensive, whereas renewables are popular and cheap.
Jamie Stone
I have gone on again and again about green energy and hydrogen creation. Hydrogen is green and clean, and we must get serious about this. Does my hon. Friend agree it is vital that all Governments in the United Kingdom work together fast, and now?
Tim Farron
Green hydrogen is an essential part of the mix, and I agree with my hon. Friend. If the Government were trying to change policy quickly to do something that would make a radical difference quickly, they would be opting for renewables. After Canada, the United Kingdom has the greatest tidal range on planet Earth, and yet we are tapping almost none of it. Why are we not investing in wind and solar and allowing farmers to diversify?
Lee Anderson (Ashfield) (Con)
The hon. Member is generous with his time. I wonder if he can recall when his leader said:
“I love shale gas—it is much cleaner than coal and we need more gas. I hope we get loads of it”.
Tim Farron
When my leader, the right hon. Member for Kingston and Surbiton (Ed Davey) was Secretary of State for Energy and Climate Change, he was responsible for the United Kingdom increasing renewables by 20% every year, and that dropped by 3% when he left office. The hon. Member is concerned about leaders changing their mind, yet the Conservative party is led by someone with more flip-flops than Benidorm, so we will not take any lessons from the Conservative side of the House. Renewables are the answer. They are quick and they are popular.
Tim Farron
Other people need to get in. The Minister needs to be patient and wait his turn.
My concern is: what does this decision say about the Government? It is not rational to choose shale gas and fracking when it is obvious that it will not have an impact on reducing prices or improving energy security. Instead, the Government could be moving towards tidal, marine, hydro, wind and solar. It is not rational.
It is also not rational that, earlier, the Treasurer of His Majesty’s Household, the hon. Member for Calder Valley (Craig Whittaker), the Government’s deputy Chief Whip, wrote to every Conservative MP saying that the motion is not about fracking and is a matter of confidence. That causes a great problem for Government Members, who must vote either to end the moratorium on fracking—only 19% of the British people support fracking, and the overwhelming majority, including those in my constituency, are opposed to it, so that would be enormously unpopular—or to bring down the Government. That is an irrational thing for the Government to seek to put before the House.
We are beginning to see a pattern of irrational behaviour at the centre of our Government. If we care about our energy supplies, the cost of energy, the enormously painful cost of living—a threat to every single family in the country—and our economy, we cannot have those people in high office and leading the Government party consistently acting illogically and irrationally. The Government’s proposal is irrational. That is why they should give way. We should oppose fracking. I will vote to oppose fracking today, and I challenge Government Members to ignore their Whips and to vote to end fracking.
Maria Caulfield (Lewes) (Con)
Let me be clear for my constituents: I do not support fracking and will not vote for it in the future. My constituents’ concerns are clear. My hon. Friend the Member for North Dorset (Simon Hoare) was right that the Secretary of State gave a commitment that local residents would have a veto over any plans for fracking. I am encouraged by that. The moratorium will therefore stay in Sussex, because I am pretty confident that my residents would not support fracking.
I echo the concerns raised on planning. We see on a daily basis refusals for planning being overturned by the planning inspector. I want reassurance from the Minister that that will not happen in cases involving fracking. This may be an opportunity to look at the role of the planning inspector overall as well as how we can respect wishes locally on fracking.
Let us also be clear that the motion is to agree on the date when there will be a vote on a Bill to ban fracking. The vote today is not on banning fracking. I am amazed at the sheer brass neck of the Opposition, who often criticise the Government for rushing through legislation by having all stages on one day, and yet that is exactly what they propose. They often say, “These issues are too important,” “Too many colleagues want to speak,” and, “There is not enough time to debate amendments,” and yet their motion is for all stages of a Bill in one day. Is that an indication of the Government-in-waiting who they claim to be?
I pointed out to the shadow Secretary of State his hypocrisy: when he was Labour leader, he said to the Labour party conference that there was a role for fracking. However, that bears no resemblance to the brass neck of the Liberal Democrats, who as usual said one thing when they were in government and, now that they are in opposition, say another.
Maria Caulfield
I will not; there is not enough time. When the leader of the Liberal Democrats, the right hon. Member for Kingston and Surbiton (Ed Davey), was Energy Secretary, not only did he lift restrictions on fracking, but he voted against a ban on fracking in 2015. As my hon. Friend the Member for Ashfield (Lee Anderson) said, he was quoted in 2013 as saying:
“There is an awful lot of nonsense talked about fracking. I love shale gas—it is much cleaner than coal and we need more gas. I hope we get loads of it”.
I will say the same thing to my constituents today and tomorrow: I will not support fracking, whether I am a Government Minister or a Back Bencher. I hope that when the matter does come to the Floor of the House, and I will not support fracking when it does, my constituents will see that I stand by every word I say.
Several hon. Members rose—
Stephanie Peacock (Barnsley East) (Lab)
Thank you, Madam Deputy Speaker.
“We will not support fracking unless the science shows categorically that it can be done safely.”
That was the 2019 Conservative manifesto. We will only allow fracking where there is local consent. That was the Prime Minister in her leadership bid this summer. There is no new science and there is no local consent. Indeed, in July this year, the Government commissioned a report from the British Geological Survey, which has already been quoted today, to investigate the impact of fracking. The report showed no new science, but concluded that forecasting earthquakes as a result of fracking “remains a challenge”.
Extracting shale gas through fracking in the hope of offsetting the energy crisis will not work. Implementing the process is expensive and returns simply not enough to make a significant difference to our energy sector. It was the right hon. Member for Spelthorne (Kwasi Kwarteng) who stated that fracking
“won’t materially affect the wholesale market price”.
It would do nothing to cut bills, costing far more than renewables, and it is unsafe. Even the founder of the fracking company Cuadrilla has stated that fracking is neither safe nor viable in the UK. It is clear that nobody in the UK other than the Government want this plan to go ahead.
Given that 50% of the last round of fracking licences were in Yorkshire, people in Barnsley are concerned about the Government’s disastrous plans to reintroduce fracking. Only 17% of the public support the practice. The Business Secretary claims he would be happy to allow fracking in his back garden, but he does not speak for the rest of the country and he certainly does not speak for the people of Barnsley.
Simon Hoare (North Dorset) (Con)
First of all, may I thank my right hon. Friend the Secretary of State, a long-standing friend, for how he has approached today’s debate? The assurances he has given to the House should be taken seriously and with the sincerity with which he made them. They have been enormously helpful.
My opposition to fracking is well known. I would say to anybody who is uncertain about the merits of new exploration and exploitation of fossil fuels that they should watch—on playback if they did not see it on Sunday —the concluding episode of “Frozen Planet II”. Only an idiot would think that our planet could sustain new forms and new exploitations of fossil fuels into our environment. I am not entirely sure why this has been made a matter of confidence, and I am still less certain why His Majesty’s Government have decided to resurrect an issue that I thought had been interred, quite properly, some little while ago. However, I am absolutely convinced that fracking is not going to happen. These are bald men fighting over a comb. It is not going to occur. No local community is going to grant consent. I would love to vote against fracking tonight, but like my hon. Friend the Member for Hazel Grove (Mr Wragg) I want to keep my voice and my vote to help shape the future of the party I have been a member of since 1985, and I am not prepared to throw that away on something which, as I say, is not going to happen.
I agree with those who have called for a free vote. There should be a free vote once my right hon. Friend has undertaken the consultation and the matrix of that consultation has been sorted out. It is not, however, an esoteric point to say, as a point of principle, that His Majesty’s Opposition should take control of the Order Paper. We have, dare I say it, quite enough chaos at the moment without adding to it. It is a strange day when the Labour party is trying hold us to a manifesto commitment I was proud to stand on in 2019 to maintain a moratorium. The key thing is that the moratorium remains in place unless or until a new regulatory system is introduced. From listening to the debate today and having been privy to conversations with many colleagues on the Conservative Benches over the past few days, it is my very firm belief that that day will never dawn.
Kate Hollern (Blackburn) (Lab)
I remind Members why we are here today: the site on Preston New Road rocked houses, damaged communities and terrified residents not just on one occasion, but on two or three. Quite rightly, the Conservative Government put a ban on fracking until they could be convinced that it could be safely drilled out and would cause little disruption to communities.
When the Prime Minister was on Radio Lancashire, host Graham Liver—we have a very good host, and I congratulate him on his wedding—cornered the Prime Minister in the first 30 seconds of speaking to her when he said, “What has changed?” She did not have an answer. He asked three or four times but she still could not answer. She just kept saying that she was very clear that people would be consulted. He asked her what that consultation would look like. She did not know.
Government Members accusing Opposition Members of taking over the Order Paper is an absolute joke. Your Government put in the ban. Your Government said that the ban would not be lifted—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. It is not “your” Government; it is “their” Government.
Kate Hollern
Their Government put in the ban. Their Government said that they would lift the ban when safety had been assured, but that has not happened. So they can play politics and find an excuse to vote against their conscience, but they cannot blame Opposition Members. I do not support fracking, Lancashire does not support fracking, and the Government have failed to deliver any assurance that it is safe.
Lee Anderson (Ashfield) (Con)
I love shale gas and I hope we get loads of it—we have certainly had loads of it today from Opposition Members—but it is not up to me, and it should not be up to people in this place to decide whether they want fracking to go ahead in the country. The Prime Minister has been consistent in saying that local people will have the final say on whether fracking goes ahead. We learned today that local people will also get a veto. That is right.
I keep coming to this place just to remind myself, most of the time, how out of touch a lot of MPs are. How many people in this place actually worry, in bed at night, about paying their gas bill or their electricity bill? Nobody in this place worries about how to pay the next bill that drops through the door. They would sooner side with the people we have seen out on Downing Street today gluing themselves to the pavement again than think about the hard-working taxpayer in places like Ashfield. Not once today has any Opposition Member mentioned fuel poverty. All they have banged on about is fracking in order to possibly save their own skin at a general election.
Let us be clear: nobody would support fracking in their area if it was dangerous and did not provide a cheaper supply of gas or give incentives to local communities. We all know that—we are not daft. The GMB union, which, I believe, is the Labour party’s biggest funder, supports the idea of fracking. It said:
“If it can be shown to be safe for workers and communities, fracking offers part of the solution to the energy crisis.”
Now then—if the Labour party disagrees so much with the GMB on that very important issue, maybe it should stop accepting donations, but, of course, it will not do that.
Let us be honest: most people do not think twice about where the energy comes from when they switch the kettle on in the morning. They expect electricity and gas to come to their house and they expect to be able to afford it, but my constituents are fed up with having to face increased energy bills, especially after seeing successive Governments give up on our domestic supply of fuel over the years. We now import about 40% of our gas, which means money going into foreign Treasuries and going to foreign workers when it could be here.
If local communities in Ashfield do not want fracking, I will support them. If there is a community in Ashfield who do support it, I will support them. I cannot understand why we are even here to debate this, other than because of the mischief of the Labour party.
Lee Anderson
The shadow Secretary of State can very well shake his head. What I say to him is, please come to a place like Ashfield. I know you don’t visit your own constituency very often, but come to a place like Ashfield and talk to some real people.
That’s me done, Madam Deputy Speaker.
Olivia Blake (Sheffield, Hallam) (Lab)
Until recently, the debate on climate change was about the science and about whether global heating is caused by humans. It is important to say, however, that although the climate deniers argued about science and hockey stick graphs, that was not what gave their arguments momentum.
Let us be clear. There has long been overwhelming evidence that human CO2 emissions are causing global heating. The motor of climate denial was never a rational, scientific debate; it was about defending the financial interests of the fossil fuel lobby. Pseudoscientific arguments were the only form that that defence took. Now, after decades of campaigning, protesting and lobbying, the monumental efforts of climate campaigners have meant that it is politically very difficult to deny the reality of the climate emergency. The overwhelming scientific evidence has been joined by the international grassroots political movement calling for climate justice.
We are now seeing a different strategy for protecting oil and gas profits. We are being asked to choose between tackling the cost of living crisis and tackling the climate emergency, between energy security and meeting our Paris obligations. The decision to reverse fracking is part of that new and very cynical strategy. It is an argument that says that black is white, up is down and pulling more fossil fuels out of the ground is somehow a form of environmentalism. We should completely reject that argument, because it is nonsense.
The twin ecological and climate emergencies are two of the greatest existential threats that we face. They demand that we restore our natural environment, keep fossil fuels in the ground and make a transition to clean, renewable energy. Fracking takes us in exactly the opposite direction. The Climate Change Committee has warned that the moratorium should not be lifted without an independent review of the evidence on the climate impact. Has that review been done? No, of course not.
The process of fracking produces methane, which contributes to rising global temperatures. Research by NASA has shown that leaky gas production is one of the main drivers of methane emissions on the planet. In fact, during a single week of 2019, in a site in Lancashire, 4.2 tonnes of methane—equivalent to 142 flights—were released. Extracting shale gas is also environmentally damaging because the geography of the UK means that it is more likely to cause earthquakes and chemical flowback, with waters at significant risk of contamination and further significant ecological damage.
None of this will lower our energy bills or increase our energy security. Gas prices are set not by domestic supply, but by the international fossil fuel markets. Even if domestic production significantly affected international prices, the wells here would not make a difference to those prices. That is a falsehood.
Ruth Edwards (Rushcliffe) (Con)
Today’s debate is less about fracking and more about the Labour party’s next social media campaign. If the Opposition had wanted to show the true strength of the House’s opinion on fracking, they could have tabled a normal motion today, calling for the moratorium to be reintroduced at a later stage, or they could have amended a parliamentary Bill. With either of those routes, they would have had a reasonable chance of carrying many Conservative colleagues with them, but instead they have chosen the one route that they know no Government Member could possibly support: a confidence vote. I do not support fracking, but I am even less keen on the idea of letting the Labour party play at being in government for the day. I remember what happened last time.
My views on most things, and certainly on fracking, are no secret. I do not buy the argument that it is less environmentally friendly; gas is gas, whether it is drilled here or overseas, and the carbon footprint of gas produced in the UK is smaller than that of liquefied natural gas shipped from overseas. Nor am I convinced by the argument that it is unsafe, but I do think that it is unsuitable in a country like the UK with a high population density, especially as even relatively small tremors can be felt by the local community. As the British Geological Survey, which has its headquarters in Rushcliffe, says, our ability to predict such tremors has not improved since the moratorium was put in place.
My main objection to fracking, however, is that, after all the division and local anguish it has been causing, even the industry itself estimates that it will produce very little gas. We would be better off focusing on increasing output from our North sea industry, renewables and nuclear. I am relieved that we will have a binding vote on the process for gaining local consent, because that is vital: communities must know that they have a legally enforceable route to either accepting or rejecting fracking under their homes.
My final observation tonight is for our own Front Benchers, for they have enabled the Opposition to force colleagues to choose between voting against our manifesto and voting to lose the Whip. They should take a look at the faces of colleagues behind them—colleagues who have fracking sites in their constituencies—and they should hang their heads in shame. A Conservative Government will always have my confidence, but their leadership today has severely tested my trust and the trust of many colleagues, and I would advise them not to do so again.
Anna McMorrin (Cardiff North) (Lab)
The fight against climate change is one that everyone but this Government seems to be deeply worried about. In Wales, we are proud that our Labour Government remain steadfast on the fracking ban which has been in place for seven years and will continue.
It is even more disturbing that this Prime Minister, in the absence of a public mandate, has decided to tear up her own party’s 2019 election manifesto, and any hopes of a stable future, by bringing back fracking; but is that any surprise when this Government are imploding? Will the Secretary of State even be here tomorrow? It is heartening, though, to see Conservative Members publicly declare their support for us and against the Government’s option on Twitter, coming out one at a time—particularly the right hon. Member for Kingswood (Chris Skidmore), who is also chair of the Government’s net zero review panel: I think that that is quite telling.
The energy crisis is costing lives, and action absolutely needs to be taken to curb the suffering, but fracking is not the answer. Indeed, it makes the position worse. This crisis has been created by an over-reliance on oil and gas. We cannot increase that, but the Government refuse to understand that it is not possible to tackle one crisis without tackling the other. Instead, they have chosen to ignore the warnings, the science and the pleas, making this a deliberate attack on not only the environment but public health.
In England alone a third of drinking water is supplied by groundwater, and the British Geological Survey has said that groundwater can be contaminated by fracking. One concerning risk is from flowback water coming from the fracking process itself. Water that flows back contains a high concentration of salinity. This is known to cause hypertension that can lead to pregnant women developing pre-eclampsia, exposing the them to potential stroke risks and organ failure, with some babies being stillborn. Medical experts have written to The BMJ stating those arguments. In complete contrast, the Government’s own Minister for Climate, the right hon. Member for Beverley and Holderness (Graham Stuart), has claimed that fracking is “good for the environment”—although that same Minister publicly published his support for the fracking ban in March this year.
Fracking will not solve any of our energy problems, and it will not provide the essential support that the country needs right now. Drilling is irrelevant to the energy crisis, let alone being a complete abdication of duty to the environment, local communities and the climate. This latest move drives a coach and horses through any chance of credibility for global leadership on climate issues. The Government must keep that ban now.
Paul Maynard (Blackpool North and Cleveleys) (Con)
Let me start by praising my hon. Friend the Member for Rushcliffe (Ruth Edwards), who spoke so eloquently. I endorse every word that she said about the way in which the Government have handled this matter, and I share her sense of despair, frustration and fury. Although at present I frequently find myself saying, “We are where we are, and we have to get on with it”, I would much prefer the manifesto commitment to a moratorium on whose implementation I stood for election to endure. However, I have to welcome the Secretary of State’s commitment to hold a substantive vote on the process by which consent will be determined, and I echo the view expressed by others that it should be a free vote.
This is a polarising issue in my constituency. Opinion locally has always been broadly opposed to fracking, which I have always respected and taken note of, but there has also always been a vocal supportive minority, whose voices have become louder as higher energy costs have begun to be felt, even if fracking is not a solution to the problem of higher energy prices. Everyone in my constituency deserves to have their say, so my aim over recent weeks has been to ensure that the Government’s commitment to local consent was a meaningful one, and not one placed in the hands of companies such as Cuadrilla Resources.
Any process should be independent—indeed, a local referendum would be my preference—because all areas of the Fylde coast should be able to participate in the discussions, as they will feel the consequences. Blackpool, as a unitary authority, has no involvement in Lancashire’s planning decisions, but it will bear the seismological consequences just as much as the parish of Roseacre. I am particularly annoyed by suggestions of financial inducements that will be proffered by the shale gas companies trying to influence the decision making. They must not form part of the decision over consent.
Getting the consent system right, which means that it needs to be in a broad area, not a narrow parish within 15 metres of some pad, will allow all my constituents, either in favour or against, to feel that their voice was listened to. Perhaps fundamentally, carried out under my principles any rejection of fracking locally would be a permanent people’s “no”, on the record—not some temporary politicians’ “maybe” that could be reversed by yet another U-turn or new Government, which is what Labour’s ban, I am afraid, offers us. Let the people of this country put on the record their views about fracking in their local area. Then we as politicians should pay attention to that and act accordingly.
Geraint Davies (Swansea West) (Lab/Co-op)
We are here because the previous Chancellor lifted the moratorium on fracking, and his previous boss, Crispin Odey of the hedge fund Odey Asset Management, has put millions of pounds of investment into fracking. He is the same one who made hundreds of millions of pounds when the pound went down following Brexit, having supported leave. He is the same one who made a lot of money out of sterling going down after the mini-Budget. Strange, isn’t it?
The Government have lifted the moratorium and said, “You can go ahead with fracking, so long as you have safety and local consent.” That may be bribed—we do not know what will happen there—but I do not think that it is sufficient, because we need to think about the environment. I was rapporteur on fracking for the Council of Europe. We found from satellite data that 5% of the methane being pulled out was leaked through fugitive emissions, which means that fracking is worse than coal for global warming, because methane is 80 times worse than carbon dioxide. We recommended —46 countries—that no one went ahead with fracking. As a result, when Macron was first elected and did not have many policies, he took that policy off the table and banned fracking, as we have in Wales.
Fracking consists of sending millions of tonnes and cubic metres of chemically impregnated water—often hundreds of chemicals, which are carcinogenic—into the ground. Half of them come back. Half of them stay underneath so that they can contaminate the water table; the rest have to be processed. In the United States, they are dumped in Arizona. Well, we are not the United States and we do not have the space.
We have lorries running around the countryside, smashing up our environment. We have mini-earthquakes causing disturbances. We have air quality data from the United States showing that local people have runny eyes and all sorts of problems. That is why we have banned it in Wales. We are focusing on tidal lagoons, wind farms, solar energy and spatial planning. There is a way forward for a sustainable green energy future. The answer is not fracking; it is environmentally unsound. We should dismiss it even if there was consent and the safety concerns were alleviated, which they will not be. This is absolutely appalling. It is Tory fracking, and people should vote Labour because of this appalling decision to lift the moratorium.
Scott Benton (Blackpool South) (Con)
Fracking is an issue that ignites very strong feelings among my constituents. Since the Government announced a change in direction on this issue, I have been very much looking forward to a genuinely free and fair debate in this place, where I could go on the record and outline my concerns, and those of thousands of my constituents, about fracking returning to the Fylde coast.
However, this is most certainly not the free and fair debate I have been hoping for. This Opposition day debate is a very different beast. The motion is not about fracking at all; it is an attempt by the Labour party to take over the functions of Government. It would overturn the Standing Orders and procedures of this House that say only the elected Government of the day get to decide parliamentary business. It would allow Labour to legislate against the wishes of my constituents, who elected a Conservative Government at the last general election. We will not and cannot allow the Labour party to seize control of the Order Paper. If they want to do so, they should do something they have not done in 17 long years and win a general election. The Opposition know full well that Conservative Members who share their legitimate concerns about fracking cannot vote for their motion today. Instead of engineering a constructive and fair debate, Labour has contrived to weaponise this issue. Truly shameful behaviour.
While I have the opportunity, I state once again that the vast majority of my constituents do not support the return of fracking to the Fylde coast. The environmental and safety thresholds and protections were breached when fracking previously took place at the Preston New Road site, only a few miles outside my constituency. As a result, fracking stopped in 2019.
The war in Ukraine has woken up the west and demonstrated that we cannot rely on authoritarian foreign regimes for our energy supplies. As such, I support the Government in striving to maximise more of our domestic energy reserves, particularly North sea oil and gas, and nuclear power. Although I can see why the Government have put fracking back on the table, it should only take place where it is safe and where it is supported by local communities, as the Government have reiterated time and again, and as the Secretary of State for Business, Energy and Industrial Strategy has made clear once again today. I wholeheartedly support that position.
I welcome the steps the Government are taking to determine how local consent can be established, and I look forward—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I call Rebecca Long Bailey.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Fracking will not solve the energy crisis. Indeed, the shale gas extracted by fracking would make no difference to gas prices and is a more expensive alternative to renewables. Further, fracking would demonstrably increase the risk of local earth tremors, as recently confirmed by the British Geological Survey.
On the wider environmental impact, Greenpeace says:
“Not only is fracking bad for our climate, it risks causing air, water and noise pollution. It uses toxic chemicals that may not be regulated well enough. An accident could mean that these chemicals leak into water supplies or cause pollution above ground. In fact, this has happened many times in the US.”
With all this in mind, why on earth would the Government pursue a strategy that poses such risks and flies in the face of efforts to tackle climate change? Well, the author and climate commentator Naomi Klein calls it
“the Shock Doctrine: the exploitation of wrenching crises to smuggle through policies that devour the public sphere and further enrich a small elite.”
This bandit capitalism extends beyond just fracking into the way the Government approach our whole energy system. The pursuit of markets at all costs, with little state intervention, keeps leading to the same problems: complex, poorly designed mechanisms, open to gaming and profiteering, that deliver poor value for money and poor environmental outcomes, if they deliver at all. When that system fails, as it is failing now, well, it is everybody else’s problem.
A new generation is now calling for change, a green new deal and a green jobs revolution that distributes costs and rewards progressively, deepens economic democracy and kick-starts an industrial strategy to rebuild and light up Britain. We get it on this side of the House, but I am worried that we will miss this chance. Worse, I am frightened that, although numerous Conservative Members may speak out against fracking, the fact remains that they are still in a Government led by an environmental and economic vandal.
The clock may well be ticking on the Prime Minister’s days in office but, as Naomi Klein sadly states,
“When powerful ideologies are challenged by hard evidence from the real world, they rarely die off completely…A few true believers always remain to tell one another that the problem wasn’t with the ideology; it was the weakness of leaders who did not apply the rules with sufficient rigor.”
That is why today is so important. That is why across this House we have a moral duty to vote in favour of this motion, to introduce a Bill to ban hydraulic fracking for shale gas once and for all.
James Grundy (Leigh) (Con)
I was very grateful that the Secretary of State today gave confirmation at the Dispatch Box about a local veto. As other colleagues have said, that local veto on fracking must be paramount. There can be no local authority overturning what has been decided by local people in a referendum or other similar independent method of decision making. Although some colleagues have spoken about local authorities being bastions of listening, that is not always the case. Unfortunately, some would be cynical enough to pass fracking applications in just a couple of opposition-held wards and then claim that the planning committee was the democratic representative. We would then find that those wards, which were never going to vote for the administration, would be unable to hold the council to account. It is important that local authorities are not able to hornswoggle smaller communities within the local authority in that way and that, by the mechanism that the Secretary of State has rightly set out—I look forward to further detail on it—we enable local residents to prevent local authorities from trampling local rights.
I am incredibly pleased that that has been confirmed, because I fear that Wigan Council, which is in a huge dispute with local residents and is fighting tooth and nail over a number of incredibly unpopular planning applications in just a handful of areas in my constituency despite thousands of objections, is fundamentally unwilling to listen to objectors. I am delighted that that would not be the case with fracking and that the veto would remain at the community level. With that, I shall sit down. I have made my point very clearly that the local voice must be paramount, and if people do not want fracking, they should not have it.
Margaret Greenwood (Wirral West) (Lab)
The Government must ban fracking once and for all. It is an outdated, dangerous and expensive way to produce energy. It will not provide the clean, secure energy that our country needs, nor will it help us to meet our legally binding commitment to net zero. As Friends of the Earth has pointed out, fracking risks contaminating water, it poses risks to public health and the environment and it is unlikely to reduce energy bills. The Government’s written statement of November 2019 said that the moratorium on fracking would
“be maintained until compelling new evidence is provided which addresses the concerns around the prediction and management of induced seismicity.”—[Official Report, 4 November 2019; Vol. 667, c. 56WS.]
Likewise, the Conservative party manifesto of 2019, on which Members opposite stood and were elected, said:
“We will not support fracking unless the science shows categorically that it can be done safely.”
Nothing has changed, and I ask the Minister to explain what he thinks has.
The recent report by the British Geological Survey found:
“Forecasting the occurrence of large earthquakes and their expected magnitude remains a significant challenge for the geoscience community.”
Recently, the Secretary of State has said that
“tolerating a higher degree of risk and disturbance appears to us to be in the national interest”.—[Official Report, 22 September 2022; Vol. 719, c. 40WS.]
So it appears that as well as being reckless the with economy, the Government are being reckless with the environment and the health and safety of communities. The Climate Change Committee has made it clear that moving away from fossil fuel consumption will both benefit households, as it will reduce exposure to volatile fossil fuel prices, and reduce emissions.
The Government speak of consent, but reports that households could be handed £1,000 to consent to fracking in their area are of real concern. Greenpeace has rightly labelled that as a cynical ploy and said that the Government must be hoping they
“can buy off people’s concerns while they are struggling with the cost of living crisis.”
There currently exists a petroleum exploration and development licence, PEDL 184, covering an area of north-west England that includes my constituency. The licence allows a company to pursue a range of oil and gas exploration activities, subject to the necessary drilling and development consents and planning permission.
No wonder my constituents are worried. They have made it abundantly clear that they do not want to see fracking. We on these Benches will stand up for our constituents today and oppose fracking. The Members opposite should stand by their manifesto commitment and do the same.
Justin Madders (Ellesmere Port and Neston) (Lab)
I will start with words from page 55 of the Conservative party manifesto, because it is very clear and it is there in black and white. It says:
“We placed a moratorium on fracking in England with immediate effect. Having listened to local communities, we have ruled out changes to the planning system. We will not support fracking unless the science shows categorically that it can be done safely.”
I read out those words because they should mean something. They should mean something to everyone on the Government Benches, who were elected on those words. If they do not mean anything to Conservative Members, I am sure they will mean something to the people who voted them in and who will be watching very closely how the vote today, because the science has not categorically shown that it can be done safely.
I thank the Tory Whips for making this a confidence vote in the Prime Minister, because after the week that she has had, I think that is more likely to lead to Back Benchers voting with us than against us. But if they are not persuaded by that, I hope they do not fall for the spin that we have heard about our needing fracking to deal with the rising cost of energy, because it was not so long ago that the now former Chancellor said that
“those calling for the return of fracking misunderstand the situation.”
He also said:
“Even if we lifted the fracking moratorium tomorrow, it would take up to a decade to extract sufficient volumes—and it would come at a high cost for communities and our precious countryside. Second, no amount of shale gas from hundreds of wells dotted across rural England would be enough to lower the European price any time soon. And with the best will in the world, private companies are not going to sell the gas they produce to UK consumers below the market price. They are not charities, after all.”
Well, even a stopped clock is right twice a day, just as a discredited former Chancellor can be right about something. He was certainly right about that.
I will say a few words about consent. The dictionary definition of consent is
“permission for something to happen or agreement to do something.”
Let us be clear that that is not the same as getting a payment in lieu of consent, and it does not mean having a refined planning process to create the illusion of consent. I am afraid the Government amendment does not take us to a place where I am convinced that we will have genuine consent, and whatever is said from the Dispatch Box does not really mean anything when Cabinet Ministers are falling on a daily basis. Let us be clear that consent is not the same as consultation, and the amendment talks too much about consultation rather than consent. Consultation is not as robust and definitive, and it is certainly not what people would expect.
The Business Secretary said last month:
“Compensation and consent become two sides of the same coin.”—[Official Report, 22 September 2022; Vol. 719, c. 796.]
I would say that they cannot possibly be two sides of the same coin. Compensation is payment in recognition of a loss, which does not in any way mean that people have agreed to suffer that loss. If the Government really do want to get consent for fracking the countryside, they should put it in their manifesto and call a general election. We will see whether they get that consent.
Christian Wakeford (Bury South) (Lab)
I am pleased to be called to speak in today’s debate, which I believe the Government Whips have called a confidence motion in the Prime Minister. I do not know who is more excited for her to receive her P45—is it our side or theirs?
The Prime Minister promised that
“fracking will take place only in areas with a clear public consensus behind it”,
but the Business Secretary ruled out local referendums and suggested that fracking companies themselves could
“go around door-to-door…and ask people if they will consent.”
Aside from being a truly ridiculous idea, appointing fracking operators as the arbiters of local consent would create an obvious conflict of interest and would undermine the authority of democratically elected councils. If the Business Secretary is so keen to start digging up people’s areas and causing earthquakes, I look forward to the Government’s newest site opening in North East Somerset in the coming weeks.
It might surprise some people, but I agree with many Government Members. The hon. Member for Fylde (Mark Menzies) spoke passionately last week and again today about his constituents, who were labelled Luddites by the Business Secretary. Given that I was a county councillor in Lancashire when fracking was debated some years ago, and that I am now the Member of Parliament for Bury South, I know the people of Radcliffe, Whitefield and Prestwich are certainly not Luddites, and neither are the people of Lancashire.
I am against fracking. It is unpopular, it industrialises the countryside, it contributes to climate breakdown and, importantly, it fails to address the energy crisis.
But it is not just me who thinks that; it is the public. One person said,
“it would take up to a decade”,
to extract what we need by fracking and that it was pointless—that was the Chancellor of last week. It will create,
“enormous disruption…for little economic gain”;
said the Chancellor of this week, four months ago.
The Defence Secretary opposed proposals for a fracking site in his constituency. The Tory party chairman, the right hon. Member for Rossendale and Darwen (Sir Jake Berry), signed the Defence Secretary’s letter opposing fracking. The Levelling Up Secretary said, “There isn’t strong support” for fracking, and I agree. The Secretary of State for Digital, Culture, Media and Sport did not want it in her backyard, and I do not blame her. Now we know that the Prime Minister’s Cabinet do not have faith in fracking, or in her, I look forward to many Conservative Members joining me in the Lobby today.
Kerry McCarthy (Bristol East) (Lab)
Today we have heard from colleagues across the House making clear their opposition to fracking. It was particularly powerful to hear from MPs from the Lancashire area, already affected by the seismic shocks of previous drilling, whose constituents live in fear of that happening again.
Fracking is dangerous and polluting, it will not provide energy security for this country and it is deeply unpopular. The Government finally seemed to get that in 2019 with their manifesto commitment to a fracking ban; as has been said, everyone on the Conservative side of the House stood on that manifesto and made that promise to their constituents. Yet it has taken only a matter of days for this new Administration to bring fracking back, not through a vote, a consultation or a debate in this House, but through a decision taken by the Secretary of State alone, who has not even turned up to hear the winding-up speeches, with no scrutiny and no accountability —[Interruption.] Oh, sorry; I did not see him there.
The Tories’ manifesto promised that the ban on fracking would remain in place unless evidence proved categorically that it was safe. However, the recent report from the British Geological Survey commissioned by the Government has offered no new evidence whatsoever to suggest the situation has changed. As the hon. Member for Fylde (Mark Menzies) said, the geology has not changed—how could it?—and the science has not changed either. So what did the Secretary of State do when he could not find the evidence he wanted? He decided to change the rules on how big an earthquake can be and still be considered safe. I would laugh, but there is nothing funny about this.
Labour has been absolutely clear that we will always oppose fracking, whether in Opposition or in Government. I am proud that the Labour Government in Wales are keeping the ban.
Let us not forget that this reckless decision comes in the middle of a climate emergency. At COP26 this Government made a commitment on the world stage to prioritise the clean energy transition and end public support for the fossil fuel sector by the end of 2022. How is that going? One year on, they are not only bringing back fracking for gas, but issuing hundreds of new licences for fossil fuel extraction. No wonder the Prime Minister is trying to wriggle out of attending COP in Egypt next month.
Let us call this what it is—it is climate vandalism. The decisions of this Government are undermining our climate targets and trashing our reputation on the global stage. As my hon. Friend the Member for West Ham (Ms Brown) said, it is taking a wrecking ball to years of patient climate diplomacy. I am sure the COP26 President would have something to say about that.
The Minister for Climate, who is replying to this debate, may be willing to swallow his pride and claim that fracking is green in exchange for a seat down the far end of the Cabinet table, but on the Opposition side of the House we will be honest about fossil fuels. They are expensive, they are polluting our air and they are destroying our planet. As my right hon. Friend the Member for Doncaster North (Edward Miliband) made clear earlier, the only solution to the energy crisis is a green one.
Removing the ban on fracking shows that we cannot trust a Tory promise even if it was embedded in their manifesto, so how can we trust what is being said today about ensuring local consent? Let us be clear: the amendment does not say there will be a veto or explain how consent would be obtained. It is very weak on the detail and it does not promise a binding vote by this House on what that consent would look like.
As my right hon. Friend the Member for Leeds Central (Hilary Benn) said, why do we even need to do this? We know that the Government’s own polling shows that only 17% of people support fracking, although I would imagine that a large proportion of those who would say, “Not in my backyard,” were quite happy for fracking to happen in—as I think a Lords Minister once called it—the “desolate” north.
I am sure the Government’s committing to a ban on fracking today, and committing to bringing forward their own Bill if they do not want Labour to seize control of the Order Paper, would come as a great relief to many of the Government’s own MPs.
Our message to colleagues on the opposite Benches is this. Fracking is not necessary, it is not wanted and it is not inevitable. I say to each of you on the Opposition Benches—on the opposite Benches, I should say—[Laughter.] That was forward thinking on my part. I say to you that you have a chance today to ensure the voices of your constituents are heard, and that our planet is protected. If you support our motion today, we will secure a binding vote on 29 November on a Bill to ban fracking, in the absence of any willingness from the Government to bring such a Bill forward. You will all have the opportunity to ban fracking before a single drill starts up in your constituencies. You know that that is what your constituents want you to do, and that there is no excuse for not doing it. Do the right thing, and support the Labour motion today.
The Minister for Climate (Graham Stuart)
It is a great pleasure to wind up this debate, to which there have been so many excellent contributions from across the House. Perhaps not for the first time, the right hon. Member for Doncaster North (Edward Miliband)—he is an extremely clever man, for whom I have a great deal of respect—has been a little bit too clever by half. Perhaps if more drafting had gone into this, instead of seizing the Order Paper we could have had a different style—[Interruption.] It was an attempt to seize the Order Paper. Quite clearly, this is not a confidence vote—[Interruption.] Obviously, this is not a confidence vote; it is an attempt—[Interruption.]
Madam Deputy Speaker (Dame Eleanor Laing)
Order. Come on, let us listen to the Minister. That means be quiet up there on the Back Benches as well.
Graham Stuart
I will not give way. [Interruption.] The right hon. Gentleman is getting over-excited. He has described himself as a nerd—accurately, of course. Perhaps he should have spent more time looking at parliamentary procedure.
I am proud to say that this Government have led the way in reducing emissions and moving towards net zero. When the right hon. Gentleman left power in 2010, not only was there that note that said there was no money left, but less than 7% of our electricity—around 6.8%—came from renewables. It is the Conservative party that has delivered the green revolution and will continue to do so. That means that more than 40%—[Interruption.] Madam Deputy Speaker, are they allowed to maintain this ridiculous stunt? It is bad enough—
Madam Deputy Speaker
Order. Mr Davies, we are having a debate. If everybody shouts at one another, we cannot have a debate.
Graham Stuart
Thank you, Madam Deputy Speaker. It has brought calm to the Opposition to point out that only 7% of electricity came from renewables when they left power, but the figure is more than 40% today. If we look at energy efficiency and people who are struggling to heat their homes today, what percentage of houses had an energy performance certificate rating of C and above when Labour left power? [Interruption.] The hon. Member for Hove (Peter Kyle) wants to tell me from a sedentary position, but I will tell him that it was 14%. What is it today? It is 46%. The Conservative party is moving this country towards net zero, and not only are we doing that at home but we are leading internationally as well.
Andrew Percy (Brigg and Goole) (Con)
The Minister is absolutely right about the green revolution, in which our region in the Humber is playing such a big part. I ask him to reflect on the speeches that have been made today. If this was a clear vote on whether or not we should have fracking, I would be in the Lobby with the Opposition. On any binding vote, I will stick to my manifesto and election commitment to oppose fracking absolutely. Will he reflect on that? He was talking about how much we should be investing in green energy, and I urge him to continue in that vein.
Graham Stuart
I am grateful to my hon. Friend, and we are investing. Near both our constituencies, we have seen the transformation—
Graham Stuart
May I at least answer this without being permanently harassed by the right hon. Gentleman, who should learn to sit? My hon. Friend has seen the transformation of the whole economics of offshore wind. He has seen this Government put in place the contracts for difference, which are being copied all around the world.
Graham Stuart
I feel as though if I do not give way to the right hon. Gentleman, he may suffer some serious medical emergency.
Edward Miliband
For the guidance of the House, the Minister said something very important from the Dispatch Box: he said that this is not a confidence motion. I think Conservative Members want to know, because if he confirms that statement, they can vote for our motion in the safe knowledge that they can be confident in the current Prime Minister. Will he confirm that?
Graham Stuart
The right hon. Gentleman was so excited to repeat something I had already said multiple times. Colleagues on this side of the House are perfectly clear. They are not going to surrender or allow the Labour party to become the Government for a day by seizing control of the Order Paper.
Justin Madders (Ellesmere Port and Neston) (Lab)
On a point of order, Madam Deputy Speaker.
Justin Madders
I think it is, Madam Deputy Speaker. It is really important that Members know what they are voting on—
Graham Stuart
Thank you, Madam Deputy Speaker.
We will continue to lead the world and drive forward offshore and onshore wind and solar energy, we will have SMRs and gigawatt-level nuclear, as well as support for AMRs, and we will come forward with proposals to support hydrogen and CCUS. We are looking all across the piece to drive the green revolution, but as part of that work we need to secure the gas and oil we rely on at the moment as we manage and drive down our usage on the path to net zero.
Ruth Edwards
I really need to press the Minister on this question of a confidence vote. Many of us have been told today by our Whips that if we vote for, or abstain from voting against, this motion, we will lose the Whip. Will he please confirm whether that is the case?
Graham Stuart
That is a matter for party managers, and I am not a party manager.
Community support is so important. That is why, as we heard the Secretary of State say today, we have pledged that there will be the community veto we have heard so much about from colleagues including my hon. Friends the Members for East Worthing and Shoreham (Tim Loughton), for North Dorset (Simon Hoare), for South West Bedfordshire (Andrew Selous), for Taunton Deane (Rebecca Pow), for Winchester (Steve Brine), for Gloucester (Richard Graham), for Bolsover (Mark Fletcher), for South Thanet (Craig Mackinlay), for Worcester (Mr Walker), for Rother Valley (Alexander Stafford), for Rushcliffe (Ruth Edwards), for Blackpool South (Scott Benton), for Ashfield (Lee Anderson), and for Leigh (James Grundy), as well as my right hon. Friend the Member for Bognor Regis and Littlehampton (Nick Gibb), my right hon. Friend and neighbour the Member for East Yorkshire (Sir Greg Knight), and my right hon. Friend the Member for Scarborough and Whitby (Sir Robert Goodwill), up the coast from me.
Graham Stuart
It is interesting to see on his feet the Liberal Democrat Member who in his speech suggested that not a drop more gas or oil should come out of the ground, forgetting that 75% of our energy needs today are met by fossil fuels. It is this Government who are leading the green transformation to take us away from fossil fuels. It is this Government who are driving forward net zero, not only here but, equally important, all around the world. It is my right hon. Friend the Member for Reading West (Alok Sharma) who, as President of COP26, has moved the world from having just 30% of global GDP covered by net zero pledges in 2019 to more than 90% today. It is that transformation of the global position on the pathway to net zero that has been critical, as well as the development of net zero at home.
That is why we will continue to make sure that we develop. It is why we are issuing licences and blocks in the North sea, so that we can produce domestic oil and gas as we manage that pathway down. We will—
Sir Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.
The House proceeded to a Division.
Madam Deputy Speaker (Dame Eleanor Laing)
I ask the Serjeant at Arms to investigate the delay in the No Lobby.
Thangam Debbonaire (Bristol West) (Lab)
On a point of order, Madam Deputy Speaker. There are very strong rumours that the Government Chief Whip has apparently resigned. I wonder if it is possible to get some clarity—[Interruption.] More than rumours—[Interruption.] Well, if Government Front Benchers want to say no. I seek your guidance, Madam Deputy Speaker, on whether or not that can be confirmed, given that this is a matter of parliamentary discipline?
Madam Deputy Speaker (Dame Eleanor Laing)
The hon. Lady raises a point as to whether a member of the Government has resigned. I have not been given any such information. I know no more than that and it is not a point of order for the Chair.
Tim Farron
On a point of order, Madam Deputy Speaker. I wonder whether you could clarify that the Minister closing the debate we have just had from the Dispatch Box informed his colleagues that it was not a vote of confidence, when we saw earlier, in writing from the Government Deputy Chief Whip, that it was. Could it be possible that Government Members voted in the Division just now without any clarity on what it was actually they were voting for?
Madam Deputy Speaker
I thank the hon. Gentleman for his point, which of course is not a point of order for the Chair. My concern is that what is said on the Order Paper is correct and accurate, and it is. I thank the hon. Gentleman for the point he raises, but it is not one on which I can judge. Ministers are responsible for their own words.
Chris Bryant (Rhondda) (Lab)
On a point of order, Madam Deputy Speaker. I urge you to launch an investigation into the scenes outside the entrance to the No Lobby earlier. As you know, Members are expected to be able to vote without fear or favour and the behaviour code, which is agreed by the whole House, says that there shall never be bullying or harassment of Members. I saw Members being physically manhandled into another Lobby and being bullied. If we want to stand up against bullying in this House of our staff, we have to stop bullying in this Chamber as well, don’t we? [Interruption.]
Madam Deputy Speaker
Order. We are talking about behaviour. We will have a little bit of good behaviour for a moment on both sides of the House.
The hon. Gentleman raises an important matter about behaviour. He knows better than anyone else that we have an extremely good system for investigating allegations of bullying, intimidation or bad behaviour. If the hon. Gentleman cares to bring evidence and facts to me, I will make sure that the matter is properly investigated. Of course, we must have decorous behaviour at all times, so we will now proceed quietly and politely.
Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.
Question agreed to.
Main Question, as amended, put and agreed to.
Resolved,
That this House calls on the Government to consult to ensure there is a robust system of local consent, and clear advice on seismic limits and safety, before any hydraulic fracturing for shale gas may take place; and believes that such consultation must consider how the views of regional mayors, local authorities and parishes should be reflected as well as the immediate concerns of those most directly affected.
Business without Debate
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Air Quality in Towcester
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Madam Deputy Speaker (Dame Eleanor Laing)
I call Dame Andrea Leadsom—[Interruption.] Order. Surely hon. Members will show some dignity and respect for the right hon. Lady, who is about to begin the Adjournment debate. Leave quietly and quickly. [Interruption.] That means all of you.
Dame Andrea Leadsom (South Northamptonshire) (Con)
Thank you, Madam Deputy Speaker; I am grateful to you for granting this important debate.
Picture the scene: a beautiful, historic town whose origins date back to the Roman days; small businesses lining both sides of the street; and traditional architecture providing a link to the area’s local history. [Interruption.] That is Towcester, at the heart of my South Northamptonshire constituency. It is an idyllic scene until the traffic starts—[Interruption.]
Dr Liam Fox (North Somerset) (Con)
On a point of order, Madam Deputy Speaker. I am sitting not 6 feet from my right hon. Friend and I am unable to hear what she is saying.
Madam Deputy Speaker
The right hon. Gentleman is absolutely correct. I have asked Members to behave in a decent and respectful way. I think it is a bit more quiet now.
Dame Andrea Leadsom
Thank you, Madam Deputy Speaker.
I was describing Towcester, a beautiful town in the heart of my South Northamptonshire constituency. It is an idyllic scene until the traffic starts. Most days, and sometimes all day, cars queue down the A5 Watling Street, which is the high street through Towcester. Buses cannot pass the cars parked either side, and worst of all, whenever the M1 or the M40 are up the creek, which can happen at any point during the day or night, we have heavy goods vehicles squeezing their way through the narrow gap between parked cars. They often have to drive on to the pavement with air brakes wheezing, tooting their horns to each other to signify, “You first.”, “No, you first.” I will never forget the day, when my son was 12, that we were walking past the town hall where the pavement narrows to only two feet wide. He dropped a ball into the road and leant out to catch it just as an HGV came past. I grabbed him, but if I had not, that would have been the end of him.
HGV drivers have little concern for busy families with pushchairs or elderly residents crossing the street with walking sticks. The only crossroads in the town is at the historic Saracens Head pub, mentioned in Charles Dickens’s, “The Pickwick Papers”. Back in the day, as a coaching inn, it would have been a beautiful stop-off point for travellers, but now, having a pint in its pub garden is akin to having a beer alongside several gallons of diesel fumes. This road is unbelievably unsuitable for the size and volume of traffic that is using it, and quite apart from the obvious dangers for cyclists and pedestrians, the traffic is having an appalling impact on Towcester’s air quality, noise levels and quality of life for residents.
Towcester has been in need of a ring road for probably 50 years, and since becoming MP for South Northamptonshire in 2010, resolving that issue has been one of my main local priorities. The beauty of the town drew the eye of Persimmon Homes, which agreed to build a relief road for the town, among other things, in return for planning permission for more than 2,000 new homes on the edge of Towcester. I am no nimby and neither are my constituents. The new housing has been welcomed, and new residents are enjoying the lovely independent retail offer of Towcester, as well as the stunning walks through parkland that used to belong to the Easton Neston estate. As always seems to happen in these situations, the houses are being built at breakneck speed, but after 12 years of my beating down the door of National Highways, the local council, the Department for Transport and Persimmon, we have somehow only managed to achieve a road to nowhere. I have a meeting with them all together once a month; everyone is keen to get the job finished, but as hon. Members can imagine, the sparks occasionally fly.
The relief road will ultimately join the A5 with the A43 as a bypass to the town centre. After years of negotiation, the DFT has agreed that signage will push traffic out of the town and on to the relief road. A new consultation is also under way to improve the look and feel of Towcester town centre and put traffic calming measures in place. The future for Towcester is promising, but that happy vision is probably the best part of two years away or more.
The centre of Towcester was declared an air quality management area as long ago as September 2005. Since then, pollution levels have steadily got far worse; they are currently well above the target level set by the Government. West Northamptonshire Council wrote to all residents of Watling Street and the surrounding areas in March 2021 about air quality, reminding them that their properties fall within an air quality management area and that they might wish to reduce the amount of air pollution to which they are exposed. I am absolutely certain that they all agree.
One of the specific measures that the council proposed was to keep windows adjacent to the road closed during peak traffic periods and to ventilate homes as much as possible through windows that face away from the primary traffic route. You can imagine how residents felt about that advice, Madam Deputy Speaker. Quite rightly, many constituents have contacted me to ask why help in the form of the relief road is not being expedited. They also want to know what we can do in the meantime to protect local people from the damage that is being done to their lungs.
Richard Foord (Tiverton and Honiton) (LD)
Average levels of asthma and chronic obstructive pulmonary disease are higher in my part of Devon than across the rest of England. Congestion in Cullompton would be eased by a relief road and by the reinstatement of a railway station. Does the right hon. Member agree that railway stations and relief roads can improve air quality?
Dame Andrea Leadsom
I entirely agree; I wish the hon. Gentleman success with his campaign for a relief road. However, my purpose this evening is to talk about Towcester, the Roman town of Lactodorum. It is a beautiful place, but it could be so much more beautiful if we get the relief road issue sorted and—most importantly —if the Department deals as far as is possible with relief in the meantime.
I ask my right hon. and learned Friend the Minister the following questions. First, what further action can National Highways take to stop heavy goods vehicles using the A5 at Watling Street until the relief road, which could still be up to two years away, is built? Secondly, can she confirm that National Highways intends to introduce a 7.5-tonne weight restriction in the town centre once the relief road is open? Thirdly, what other measures does she propose to improve air and noise quality in Towcester before the relief road opens? Fourthly, can the programme of signage and traffic calming on which National Highways is consulting as part of the improvements to Towcester town centre be expedited to tackle the problems as soon as the relief road is open, rather than waiting until 2025?
Fifthly, the proposed new developments, particularly logistics centres and warehousing, threatened in a large number of new planning applications in South Northamptonshire will massively exacerbate existing traffic congestion problems. What further action can be taken to stop overdevelopment and ensure that planners take into account the full aggregate impact on traffic of the various individual development projects proposed?
My final question is this. What consideration has been given to the cumulative impact of many significant infrastructure projects, such as the Towcester relief road itself, combined with HS2 and the desire for road closures and traffic movements, as well as the strategic rail freight interchange at Northampton Gateway? What consideration has been given to the aggregate impact of those projects on traffic and air quality in the local area, and what action can be taken to reduce that impact?
Knowing how diligent the Minister is and knowing of her commitment to improving local infrastructure, I look forward to her response and to hearing some reassurance that I can convey to my constituents.
The Minister of State, Department for Transport (Lucy Frazer)
I thank my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) for providing us with such a vivid picture of the idyllic town of Towcester, while also raising the important issue of congestion and air quality that affects the residents of her town. I know that she has been a staunch campaigner on this subject for a number of years, supporting her local community. Like her, the Government take air quality and its effects extremely seriously; although we have achieved significant reductions in air pollution, it remains the largest environmental risk to public health in the UK.
We are taking a range of actions to drive down air pollution across all sectors, including emissions from transport, domestic burning, industry and agriculture. In these difficult times, we are working responsibly as a Government to balance those actions with other key priorities such as achieving net zero and managing economic burdens on businesses and individuals.
I hope my right hon. Friend will not mind if I begin by specifying some of the measures that we are taking nationally. Last November we passed the Environment Act 2021, under which we have consulted on two stretching new targets for concentrations of fine particulate matter, the pollutant most damaging to human health. We know that in many cases it is bespoke local intervention that is needed to tackle local air quality issues, which is why the Government have worked to help and empower local authorities to take action. This includes allocating £883 million under our NO2 programme to help local authorities to develop and implement measures to tackle nitrogen dioxide exceedances, in the shortest possible time. It also includes the money paid to local authorities through our air quality grant scheme, which helps English councils to develop and implement measures to benefit schools, businesses and communities and reduce the impact of polluted air on people’s health. Since 2010 we have awarded more than £42 million across almost 500 projects, and this year we more than doubled the funding paid to local authorities through the scheme, to £11.6 million.
National Highways and local authorities already work together to improve local air quality, but in order to formalise that collaboration the Government are designating National Highways a “relevant public authority” through the Environment Act. As a relevant public authority, it will be required to collaborate with local authorities to tackle areas with poor air quality, identified alongside the motorways and trunk roads within each local authority, to help ensure that local air quality objectives are met and subsequently maintained. That will give greater clarity and cohesion to their partnership with local authorities in responding to air quality issues. The statutory instrument designating National Highways a relevant public authority will be laid this autumn.
Let me now turn to the specific local issues raised by my right hon. Friend. The air quality action plan for the Watling Street Towcester air quality management area, updated recently in 2021, sets out the measures that the council plans to take to improve air quality. As my right hon. Friend said, the most significant measure to sustain air quality improvements will be the proposed A5/A43 new road, which will provide an alternative to the route through the centre of Towcester for some traffic. The new road is largely developer funded, but National Highways has made available a contribution of £3.8 million to enable an earlier start to the construction. Like my right hon. Friend, I am very keen to see the road completed as soon as possible, to deliver the important benefits that she outlined.
I know that National Highways has been working closely with West Northamptonshire Council to support a solution that will help to alleviate the traffic and air quality problems in Towcester. As my right hon. Friend discussed with the previous Roads Minister, that will involve installations of signs to direct traffic via the new road, as well as a complementary programme of traffic calming measures, which she talked about. As she mentioned, those actions have already been subject to a public consultation, which closed on 11 September this year. I know that National Highways is in the process of analysing the feedback from the consultation to further inform design development.
I know that my right hon. Friend has vigorously lobbied on behalf of her constituents to introduce a weight restriction and speed reduction through Towcester’s high street. She asked me a particular question about that, and I can confirm that a 7.5-tonne limit was included within the options in the recent public consultation. Introducing a weight limit, however, would be dependent on the provision of the new road as a more suitable road for HGVs, and exceptions will need to be in place to enable businesses along the high street to receive deliveries.
My right hon. Friend will be pleased to know that the range of measures being proposed by National Highways, working alongside West Northamptonshire Council, will bring many benefits. The main objectives for the scheme include reducing the impact of air and noise pollution on the surrounding environment, making Towcester’s high street an attractive place to visit, improving accessibility to Towcester town, and above all preserving Towcester’s rich history and identity. She mentioned that the new road is being constructed by Persimmon Homes, which has assured National Highways that the road will be completed in the summer of 2024.
I reassure my right hon. Friend that National Highways has agreed to deliver both the signage and traffic calming measures on Towcester’s high street as soon as the new road is completed. In response to her questions on what further action can be taken by National Highways to stop HGVs using the A5 street, I understand the current frustration for her constituents when the A5 is used as a diversion route following accidents on the nearby M1, as well as during the ongoing works to the motorway. I assure her that the M1 improvement works, which are due to be completed early next year, will not only add extra capacity on the M1 but substantially reduce the frequency of the A5 route being used as a diversion for the M1.
My right hon. Friend raised the issue of new developments in South Northamptonshire, which will deliver immediate impacts of protecting and creating jobs, improving livelihoods and supporting the long-term transformation of the local economy. I acknowledge her views on how those developments exacerbate the existing traffic problems, and reassure her that National Highways is a consultee for any planning applications that may impact the strategic road network. For any applications that impact that network, developers are required to undertake a series of cumulative assessments of traffic levels based on the requirements set out by the Department. Once assessed, impacts of individual schemes may require mitigation measures to be put in place, which would form part of any recommendation for approval. However, as she will know, any decision on whether to grant development consent would be a matter for the local planning authority.
I appreciate the robust campaign led by the council, and the efforts of my right hon. Friend, to protect local residents from poor air quality, and I am pleased that the latest air quality annual status report, conducted by South Northamptonshire Council in 2021, confirmed a continuous downward trend of nitrogen dioxide levels, and all monitored sites in Towcester achieved legal compliance with NO2 levels in 2019.
I am grateful to my right hon. Friend for her perseverance in improving the lives of the residents of Towcester, and for providing us with an opportunity to outline the steps we are taking to improve both the traffic situation and air quality in and around Towcester. Improving air quality across the nation is a key priority for this Government, and I am committed to addressing it while supporting the economic growth that we so desperately need.
Question put and agreed to.
Draft Public Sector Bodies (Websites and Mobile Applications) Accessibility (Amendment) (EU Exit) Regulations 2022
(2 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary, Cabinet Office (Brendan Clarke-Smith)
I beg to move,
That the Committee has considered the draft Public Sector Bodies (Websites and Mobile Applications) Accessibility (Amendment) (EU Exit) Regulations 2022.
It is a pleasure to serve under your chairmanship, Mrs Cummins.
The purpose of the regulations, which were laid before the House on 18 July, is technical. They do not introduce any new policy, rather the main purpose is to update the Public Sector Bodies (Websites and Mobile Applications) (No.2) Accessibility Regulations 2018, so that they can continue to operate, given that the UK has left the European Union. The amendments do not add any burdens to the UK’s public sector, nor do they reduce any of the UK’s standards and support for disabled people.
The 2018 regulations were transposed from EU Directive 2016/2102 which requires public sector bodies to make their websites and mobile applications accessible, unless it would impose a disproportionate burden on the public sector body to do so.
Margaret Greenwood (Wirral West) (Lab)
According to the Royal National Institute of Blind People there are 340,000 people registered blind or partially sighted in the UK, and there are more than 2 million people living with sight loss. The statutory instrument is particularly important to them. I know from blind and partially sighted people that I have spoken to just how important it is to them that they are able to access websites and other technologies, such as mobile apps, for a range of things including shopping, accessing services and communicating with friends and family.
It is important that the Government lead the way on this, so what steps does the Minister intend to take to encourage companies more widely to ensure that their websites are accessible to people with disabilities, including those who are blind and partially sighted?
Brendan Clarke-Smith
I share the hon. Lady’s passion for making sure that we can make things accessible. I have worked in my own constituency with organisations such as the RNIB towards that end. Existing regulations, such as those in the Equality Act 2010, aim to ensure accessibility. I will make sure that we not only enforce those regulations, but I want to see companies proactively implementing today’s proposed regulations without the Government having to get involved. From my perspective, I and, I am sure, my colleagues will continue to promote that work. The hon. Lady is absolutely right.
“Accessibility” refers to principles and techniques to follow when people design, build, maintain and update websites and apps in order to make them as easy as possible for people to use. That applies in particular to people with disabilities, and people who use assistive technology with their computers, tablets and mobile phones, such as a screen reader or screen magnification software. The regulations build on existing UK legislation and commitments such as the Equality Act 2010 in England, Scotland and Wales, and the Disability Discrimination Act 1995 in Northern Ireland, which placed duties on service providers to make reasonable adjustments for persons with disabilities when providing services and exercising public functions.
The current regulations also place some obligations on the Minister for the Cabinet Office, including monitoring of the public sector to ensure the regulations are being met, and sending a report to the European Union every three years, detailing what has been found during that monitoring. Those obligations were harmonised, so that implementation was similar across EU member states and so that there could be comparison between countries. That harmonisation is no longer required, and the specified monitoring process has been inefficient to implement. The amendments move the monitoring process from being defined in a European Commission implementing decision to being set by the UK Government. The model accessibility statement that websites and mobile apps need to publish is also moved to be set by the UK Government. The first report was due to be sent to the EU in December 2021. Instead of this, the Minister for the Cabinet Office published a similar report on GOV.UK, and the proposed amendments alter the obligation allowing the same procedure to be followed in the future. That ensures that the monitoring, and the effectiveness of the regulations, are transparent to all.
The 2018 regulations used a European technical standard as the definition of the accessibility requirements placed on the public sector. That standard is controlled by the European Commission and is subject to its funding and timeframes. Practically, that standard mainly references an international standard called the Web Content Accessibility Guidelines, created and published by the World Wide Web Consortium. The proposed amendments would move the technical standard to that international standard, which is far more well known and used by digital accessibility experts, and is also open for all to contribute to.
The proposed regulations are made under section 8 of the European Union (Withdrawal) Act 2018, which allows a Minister to make regulations to resolve any deficiencies in law that arise as a result of the UK’s departure from the European Union.
The technical standard, monitoring and reporting methodology and the model accessibility statement were set through European Commission implementing decisions. The UK no longer adopts new implementing Acts so changes to those Acts no longer take effect in the UK. The SI removes the links to the Commission’s implementing Acts and replaces them with UK-set implementations, as mentioned previously. Three European Commission implementing decisions will be revoked once the amendments are made.
I hope that colleagues will join me in supporting the draft regulations, and I commend them to the Committee.
Lilian Greenwood (Nottingham South) (Lab)
It is a great pleasure to serve under your chairmanship, Mrs Cummins.
I find myself in the somewhat unexpected position of speaking for the Opposition due to the ill health of my hon. Friend the Member for Putney. I am sure the Committee wish her a speedy recovery. I also welcome the Minister to his new position.
One in five people in the UK have a long-term illness, impairment or disability, and probably even more people have a temporary disability, which includes those with impaired vision, motor difficulties, cognitive impairments or learning difficulties, deafness or hearing loss. My hon. Friend the Member for Wirral West was right to highlight the importance of the regulations for very many of our constituents, including those with sight loss.
Accessibility is about more than just putting things online; it is about making sure that content is easily navigable for everyone, whatever their abilities or otherwise. It is important that they work for everyone. The Government’s own website, Understanding accessibility requirements for public sector bodies, has acknowledged that the people who need those websites the most are often those who find them hardest to use. As we know, when websites are made more accessible to people with disabilities, they are then often more accessible to absolutely everyone—they are faster, easier to use and reflect better use in search engines.
I was concerned to note from the same Government website that
“most public sector websites and mobile apps do not currently meet accessibility requirements. For example, a study by the Society for Innovation, technology and modernisation…found that 4 in 10 local council homepages failed basic tests for accessibility.
Common problems include websites that are not easy to use on a mobile or cannot be navigated using a keyboard, inaccessible PDF forms that cannot be read out on screen readers, and poor colour contrast that makes text difficult to read - especially for visually impaired people.”
Not only do we need to update the regulations to reflect the UK’s departure from the EU, but we need to ensure that the proposed regulations lead to what they are designed to achieve, namely improved accessibility for our constituents.
I have a number of questions. Is the Minister able to reassure us that the web content accessibility guidelines are of a comparable standard to those in the EU directive? When can we expect the first model accessibility statement from the UK Government? Does the Minister expect it to add to current obligations and make it more demanding of public sector bodies? Can he share more details about the monitoring methodology? Will it largely reflect the EU regulations, or will a different approach be taken?
This year, Parliament passed the British Sign Language Act 2022. That places a requirement on Government Departments to report on what they have done to promote and facilitate the use of British sign language in their public communications. I know from my own work in the House how BSL users often find that they are unable to access Government information because it is not suitably translated. Will the monitoring process capture information regarding the accessibility of websites and mobile apps to BSL users?
When can we expect the first monitoring publication from the Minister? As for the requirement to publish subsequent monitoring publications every three years, and given what it says on the Government’s website about many websites and mobile apps currently failing to meet accessibility requirements, would more frequent monitoring reports help to drive change and enable the Government to monitor better whether improvements are made as a result of the proposed regulations?
What level of accessibility is acceptable to the Minister? If as many as four in 10 local council homepages fail basic tests for accessibility, what is the picture across public sector websites and mobile apps? What assessment has he made of that? What is the target and how quickly does he expect to reach it?
I look forward to the Minister’s answers, because I am sure that many of our constituents with disabilities who experience not being able to use websites and apps effectively will also look for those answers. My hon. Friend the Member for Putney sent me a note to say that one of her constituents who was blind had written to her to say that they were unable to access covid travel guidelines at the height of the pandemic. What else will the Minister do to drive accessibility and ensure that the UK is a world leader in that respect?
Brendan Clarke-Smith
I thank the Opposition spokesperson for her contribution. I recognised many of the issues she highlighted, because, as someone with dyspraxia, I had difficulties accessing things, certainly during my school examinations. It is something that has great personal meaning to me.
On the scope of the regulations, they are made under section 8 of the European Union (Withdrawal) Act, which allows deficiencies in regulations to be remedied now that we have left the EU. The UK has a strong commitment to supporting disabled people under the Equality Act and of course under the Disability Discrimination Act as well. The regulations only apply to the public sector, but the Department for Digital, Culture, Media and Sport will explore whether similar regulations could be introduced for the private sector. That policy has currently paused pending the outcome of the appeal on the lawfulness of the National Disability Strategy. I agree with the hon. Lady that we must encourage others to be onboard, not just the public sector.
On the enforcement of accessibility statements, the need to publish those was a new burden on the public sector and some grace has been given to it to enable it to publish them. Our monitoring shows that around 90% of sites have published a statement, and we will consider further future enforcement. The hon. Lady asked whether that monitoring was sufficient, and I can tell her that more than 900 sites and apps have been monitored so far across the public sector by the monitoring team in the digital service. The proposed regulations will allow that monitoring to focus on the sites and services that disabled people use regularly, and to use new technology to target the least accessible public sector websites.
As for the findings so far, the Cabinet Office published a report in December 2021 detailing the findings from accessibility monitoring of public sector websites and apps. Although accessibility issues were identified on nearly all tested websites, after sending a report to the website owner and giving them some time to fix the issues, 59% had fixed them or had short-term timelines for when the websites would be fixed. The main issues identified were the lack of visible focus on screen, which affects keyboard users, low colour contrasts on webpages, which affects visually impaired users and technical website construction issues that affect users of assistive technology.
Lilian Greenwood
I welcome the Minister’s response on that point, and obviously it is good news that when public sector providers were told that their website did not meet accessibility standards, 59% of them corrected it either immediately or in a short time. What did his Department do about the 41% that did not respond in that manner?
Brendan Clarke-Smith
That is a fair question and is exactly why we are introducing the regulations, because they will enable us to take matters further. I mentioned National Disability Strategy and the appeal pending; I cannot give any further detail, but pending the result of that appeal, the strategy will also enable us to take matters further. The model accessibility statement is published on GOV.UK, and currently mirrors the EU version. We will look at improvements to make it more useful, and enforcement will play a part in that.
Lilian Greenwood
Given that arrangements have been in place for some time to improve accessibility, and the Minister has identified problems, what assessment has he made of the Equality and Human Rights Commission’s ability to enforce the regulations? Is it sufficiently resourced to do so? Often, we place the onus on individuals to make complaints, when surely we should be more proactive in ensuring that websites and mobile apps are accessible in the first place. People should not be required to jump through hoops to raise concerns, and only then do we enforce.
Brendan Clarke-Smith
I agree. We are being proactive by introducing the regulations, and formulating the strategy. We encourage the public and private sectors to get involved and not just wait to act on a complaint. The Government are actively pursuing the matter and identified cases have been passed to the equalities bodies for further compliance and enforcement work.
I am grateful to hon. Members for their contributions. The Government are committed to improve the everyday lives of disabled people, and access to public information and services is vital. The SI makes sure that the public sector remains accessible to all as it moves online.
Lilian Greenwood
May I ask the Minister again about the British Sign Language Act? Will the monitoring process properly capture what is being done to facilitate and promote the use of British sign language? If he is not able to answer me now, can he write to me?
Brendan Clarke-Smith
I am more than happy to write to the hon. Lady. My mother is a BSL signer, so once again, this is something I deeply care about. I expect that such work will be implemented as part of the accessibility process. I have already mentioned support for those who are blind or deaf, but of course everybody has a right to accessibility. We are committed to that. The EHRC also has set a strategic priority and will take action against public sector bodies that do not meet the regulations.
I commend the regulations to the Committee and I hope that colleagues will support them.
Question put and agreed to.
Draft Terrorism Act 2000 (Alterations to the Search Powers Code England and Wales and Scotland) Order 2022
(2 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Security (Tom Tugendhat)
I beg to move,
That the Committee has considered the draft Terrorism Act 2000 (Alterations to the Search Powers for England and Wales and Scotland) Order 2022.
It is a great pleasure, Ms Elliott, to be here under your chairmanship.
The draft order was laid before Parliament on 18 July. Following the horrific terrorist attack at Fishmongers’ Hall in November 2019, the then Home Secretary commissioned the Independent Reviewer of Terrorism Legislation, Jonathan Hall KC, to review the multi-agency public protection arrangements—commonly referred to as MAPPA—used to supervise terrorist and terrorism-risk offenders on licence in the community.
The Police, Crime, Sentencing and Courts Act 2022—hereafter referred to as the 2022 Act—established three new powers for counter-terrorism policing: a personal search power; a premises search power; and a power of urgent arrest. Those powers were established in response to recommendations made by Jonathan Hall KC, following his review of MAPPA. The draft order relates to the new power of personal search, the creation of which was also recommended by the tragedy at Fishmongers’ Hall and its prevention of future deaths report.
The personal search power was inserted into the Terrorism Act 2000—new section 43C—by the 2022 Act. The new search power came into force on 28 June this year. As set out by the Government during the passage of the 2022 Act, the new personal search power applies across the United Kingdom, enabling the police to stop and search terrorist and terrorism-connected offenders released on licence who are required to submit to the search by their licence conditions, should the Parole Board determine that such a condition is necessary. The officer conducting the stop and search must be satisfied that it is necessary to exercise the power for purposes connected with protecting members of the public from a risk of terrorism.
Section 47AA of the Terrorism Act 2000 imposes a requirement on the Secretary of State to prepare a code of practice containing guidance about the exercise of search powers that are conferred by the Act. In June this year, Parliament approved regulations laid by the Government that amended section 47AA so that it extends to cover the new personal search power inserted into the Terrorism Act by the 2022 Act. This created a requirement for the Secretary of State to prepare a revised code of practice that includes guidance on the exercise of the power conferred by new section 43C. We duly prepared a draft revised code of practice, and the draft order seeks Parliament’s approval to bring into force the revisions we have made to the existing code.
I shall now set out the nature of the revisions that the Government have made. The primary update to the code of practice is the incorporation of the new stop-and-search power provided for by section 43C of the Terrorism Act 2000. The revised code sets out important parameters that govern the use of the section 43C power and provides clarity for officers on the power’s scope. That includes providing guidance on the thresholds to be met before the section 43C power can be used, scenarios in which it might be appropriate for use, and the powers of seizure associated with the search power.
We have also set out clearly within the revised code the limitations on the clothing that someone can be required to remove when the section 43C power is exercised by the police. In keeping with existing stop-and-search powers, police officers exercising the section 43C power may not compel someone to remove any clothing in public except for an outer coat, a jacket or gloves, and an intimate search may not be authorised or carried out under the new power.
The new section 43C stop-and-search power has been created specifically to manage the risk posed by terrorist offenders on licence who are assessed to be high or very high risk to the public. The Government plan to collect data from police forces on the use of this targeted power, as we routinely do for other stop-and-search powers, and to make such data publicly available through future statistical publications.
Given that the existing version of the code was brought into force in 2012, the Government have also made other minor changes to ensure that it accurately reflects current practice, legislation terminology and organisational responsibilities. The updated code reflects the creation of police and crime commissioners and structural changes to other policing authorities, including the creation of authorities overseeing combined police areas. We have also updated organisational names. For example, we have replaced previous references to the Association of Chief Police Officers’ Counter Terrorism Coordination Centre with up-to-date references to the Counter Terrorism Policing National Operations Centre.
The revised code also includes a new paragraph that references the Children Act 2004, and its Scottish equivalent, to highlight the need for the police to ensure that, in the discharge of their functions, they recognise the need to safeguard and promote the welfare of all persons under the age of 18. Although it is not new policy, when revising the code the Government considered it important for such safeguarding duties to be made explicit. We have made other minor but necessary amendments, such as updating links and contact details within the code. Those include refreshing the web address where the most up-to-date version of the Government’s counter-terrorism strategy—known as Contest—can be found.
In the course of revising the code, the Home Office has consulted the Lord Advocate and other appropriate persons and organisations, including the Independent Reviewer of Terrorism Legislation, Counter Terrorism Policing and Police Scotland, all of whom are supportive of the approach. The revised code promotes the fundamental principles to be observed by the police, and helps to preserve the effectiveness of—and public confidence in—the use of police powers to stop and search under the Terrorism Act 2000.
Holly Lynch (Halifax) (Lab)
As always, Ms Elliott, it is a pleasure to serve with you in the Chair. I thank the Minister for setting out the merits of the proposals.
In June, we met to discuss the proposed changes brought about by the Police, Crime, Sentencing and Courts Act 2022, which allow for those released on licence for terror or terrorism-related offences to be stopped and searched in order to protect public safety. I made it clear that we felt the measures—which were recommendations made by the independent reviewer of terrorism legislation, Jonathan Hall KC, following his review of the multi-agency public protection arrangements—were both proportionate and necessary.
That legislation committed the Minister to returning to Parliament with a refined code of practice containing guidance about the exercise of that new power, and I am glad that the Minister has been able to set that out today. The explanatory memorandum—the Minister knows that I am a big fan of them—outlines that the code has been amended to reflect other changes that have come into effect since it was last amended in 2012.
Those changes include the creation of police and crime commissioners, the establishment of the College of Policing and the latest version of Contest, as the Minister explained. I also welcome the emphasis on the need to ensure that appropriate safeguarding checks are in place to protect those under 18. By ensuring that the code offers sufficient guidance for law enforcement, we know that both children and law enforcement officials are better protected when undertaking that incredibly important work.
On that basis, we support the proposed changes. However, as the Minister knows from our exchanges on the National Security Bill, I find the work of the independent reviewer of terrorism legislation invaluable. With any extension of powers there can be unintended consequences, but equally missed opportunities, so I will follow closely Jonathan Hall’s assessment of the efficacy of these powers once they come into effect. We are satisfied that the changes are both proportionate to the security challenges we face and necessary if we are to reduce the risk of future attacks. We support the measures in the national interest.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Very unusually for stop and search powers, we are all on the same page today, so I will be brief. I think these are sensible, carefully limited measures that bring clarity for the police. Like the shadow Minister, I welcome the changes to recognise the interests of children and to safeguard them. As the Minister said, the Lord Advocate, Police Scotland and the Scottish Government have been consulted and are supportive. On that basis, we support the measures as well.
Tom Tugendhat
I am grateful for the cross-party support for these important measures.
Sir John Hayes (South Holland and The Deepings) (Con)
Given the cross-party support that the Minister was just celebrating, would it be useful for the Home Secretary to write to chief constables to remind them of the importance of the new powers, and to ensure that they are up to date on how they might be applied? It could be helpful, in the circumstances, to reflect the general consensus.
Tom Tugendhat
I will definitely take that back to the Home Secretary; I am sure that she will be delighted to do that. I am sure chief constables will be aware that the measures have cross-party support, and therefore the support of the whole country.
Question put and agreed to.
Draft Merchant Shipping (Additional Safety Measures for Bulk Carriers) Regulations 2022
Draft Merchant Shipping (High Speed Craft) Regulations 2022
(2 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department for Transport (Lucy Frazer)
I beg to move,
That the Committee has considered the draft Merchant Shipping (Additional Safety Measures for Bulk Carriers) Regulations 2022.
The Chair
With this it will be convenient to consider the draft Merchant Shipping (High Speed Craft) Regulations 2022.
Lucy Frazer
It is a pleasure to serve under your chairmanship, Mr Robertson.
The draft Merchant Shipping (Additional Safety Measures for Bulk Carriers) Regulations 2022, which I shall refer to as the draft bulk carrier regulations, and the draft Merchant Shipping (High Speed Craft) Regulations 2022, which I shall refer to as the draft high speed craft regulations, relate to the safety of large sea-going bulk carriers and high speed craft. Bulk carriers are vital in the trading of world commodities. They transport unpackaged cargo such as cement, grain, coal and iron ore. High speed craft are, generally, UK registered rapid passenger craft or non-UK rapid passenger craft operating in UK waters. They include some twin-hulled vessels, hydrofoils and air-cushioned vessels such as hovercraft.
Both statutory instruments will be made under safety powers conferred by the Merchant Shipping Act 1995. Both are also subject to the enhanced scrutiny procedures under the European Union (Withdrawal) Act 2018 because they amend or revoke provisions in earlier instruments that were made under, or amended by, section 2(2) of the European Communities Act 1972. Neither of the instruments implements any EU obligations.
The draft bulk carriers regulations and the draft high speed craft regulations implement the most up to date requirements of chapters 12 and 10 respectively of the annex to the International Convention for the Safety of Life at Sea 1974, known as SOLAS, affecting bulk carriers and high-speed craft. Both SIs bring UK domestic law up to date and in line with internationally agreed requirements. The draft bulk carriers regulations and the draft high speed craft regulations contain direct references to requirements of SOLAS. Future updates to those provisions will be given direct effect in UK law when they enter into force internationally. That assists in keeping UK legislation up to date with international requirements.
The bulk carriers regulations will replace the Merchant Shipping (Additional Safety Measures for Bulk Carriers) Regulations 1999 to implement the most up to date requirements of Chapter 12 of SOLAS affecting bulk carriers. The high speed craft regulations will replace the Merchant Shipping (High Speed Craft) Regulations 2004 to implement the most up to date requirements of Chapter 10 of SOLAS, affecting high speed craft. Chapter 10 gives effect to the High Speed Craft Codes 1994 and 2000, which contain the detailed requirements applying to high speed craft. As their names suggest, those codes were first agreed internationally by the International Maritime Organisation in 1994 and 2000 but have since been updated, most recently in 2020.
The regulations will further improve the safety standards for high speed craft, and will enable the UK to enforce those requirements against UK high speed craft wherever they may be in the world, and non-UK high speed craft when in UK waters. That provides a level playing field for industry. The amendments bring UK legislation up to date and in line with internationally agreed requirements.
The regulations will bring into UK law outstanding updates to SOLAS Chapter 12 concerning the safety of bulk carriers, which the UK has already agreed to at the IMO. Those requirements include damage stability and structural strength requirements, standards, and criteria for side construction, as well as standards for the owner’s inspection and maintenance of bulk carrier hatch covers. They also include a requirement for a loading instrument to provide information on the stability of a bulk carrier under 150 metres in length, and restrictions on bulk carriers of over 10 years of age from sailing with any hold empty. The amendments came into force internationally on 1 July 2006.
My Department held an eight-week public consultation on the draft bulk carriers regulations. One response was received, which was not contentious, and which raised a valid question seeking clarification on how the ambulatory reference provisions would work. A response to this was issued, as well as a post-consultation report, which was published on GOV.UK. We have 28 bulk carriers on the UK flag; these are all already compliant with the requirements of the draft bulk carriers regulations. Making the regulations will enable the UK to enforce the same requirements for bulk carriers as other states which UK registered bulk carriers are currently subject to when entering foreign ports; that will provide greater equality between UK shipping companies and foreign operators.
The updated requirements of SOLAS Chapter 10 set out in the High Speed Craft Codes 1994 and 2000, which the proposed regulations seek to implement, introduce both the new requirement for crew drills on entry to, and rescue from, enclosed spaces, such as machinery spaces, to be conducted every two months, and the recording of those drills alongside other similar records currently kept for fire drills and other life-saving appliance drills. Those updated requirements came into force internationally on 1 January 2015.
In addition, the regulations implement two further changes to the codes. First, they introduce updates to the requirements for life-saving appliances relating to rescue boats and life rafts. Secondly, they abolish the current monopoly on satellite service provision to ships, opening the market to any provider meeting the required standards. Both of those measures came into force internationally on 1 January 2020.
Those updated requirements are important for ensuring the safety and stability of high speed craft, and increase safety standards to align them with the international requirements. Introducing those requirements in these regulations will enable the UK to enforce those standards in respect of high speed craft in the UK’s waters. We have almost 30 high speed craft on the UK flag to which the new regulations will apply. We currently have no foreign flagged high speed craft operating in UK waters. The regulations will apply to all high speed craft, with the 1994 code applying to older vessels and the 2000 code applying to vessels built or substantially modified on or after 1 July 2002.
The regulations also make amendments to the Merchant Shipping (Fees) Regulations 2018 to enable fees to be charged for the inspection, survey and certification of high speed craft by the Maritime and Coastguard Agency.
I have highlighted the importance of both sets of regulations, including improving safety standards, meeting the UK’s international obligations and ensuring a level playing field for UK shipping companies. I hope that all Members will agree that the SIs implement important updates to SOLAS into domestic legislation regarding bulk carrier safety and the safety of high speed craft. I therefore commend the instruments to the Committee.
Mike Kane (Wythenshawe and Sale East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. I see that Bolton Wanderers are lying seventh in the championship, but they have a game in hand, so there is hope yet of promotion at the end of the season. I know that I am allowed to digress for one time under your chairmanship of any Committee to discuss such matters.
I can see from the expression on the faces of Conservative Members that they came into politics to talk about bulk carriers and high speed craft regulations. I can see that they are all on their mobile phones checking the current update on them or perhaps—
Mike Kane
Are they tracking ships that sail in the night? Indeed. Enough of the nautical puns.
I genuinely welcome the Minister to her place; I have had to do that a few times now over the past few years. I thank the civil servants for their hard work in bringing Ministers up to speed so quickly, as is apparent today. It would have been nice if the Secretary of State, who directly answers for maritime matters, had been here, but the Minister is not a second preference and her presence is most welcome.
Let us get down to business. We are here to discuss the additional safety measures for bulk carriers. Of course we would never object to anything that improves safety and conditions for seafarers. We welcome the draft regulations to replace the Merchant Shipping Regulations of 1999. That will ensure that the International Convention for Safety of Life at Sea 1974 is fully implemented.
As we all know, bulk carriers are vital in the world of commerce, as they carry unpackaged cargo such as coal and cement. Without those carriers and the brave work of those seafarers during covid we would not have kept our country stocked and supplied. The prime hazards associated with the shipment of solid bulk cargoes are those relating to structural damage due to improper cargo distribution, loss or reduction of stability during a voyage and chemical reactions of those cargoes. I note the updates relate to bulk carriers with empty holds and set standards to protect the watertight integrity of the ship, so ensuring that when loading there is an instrument that assesses the ships design and how its stability might be compromised during the process. That instrument was previously only required in bulk carriers over 150 metres in length. The updates bring in improved and updated standards on the maintenance and inspection of hatch covers, ensuring their integrity, and of single and double skinned carriers.
The primary aim of the bulk carrier statutory instrument is to facilitate the safe stowage and shipment of bulk cargoes by providing information on the dangers associated with said shipments. Those regulations will improve safety requirements and enable the UK to enforce them not just on UK ships wherever they set sail to, but to any non-UK ship when they are in our territorial waters.
Industry compliance is already high; all 29 UK flagged bulk carriers are already compliant with the standards outlined by the Minister. Given the size and nature of bulk carriers, it is vital they are safe, not only for seafarers but also for the environment. One only has to recall the bulk carrier that ran aground on a reef in Mauritius in July 2020, which then leaked oil, and caused an ecological disaster in the seas around the Indian Ocean islands. Four seafarers died while attempting to retrieve oil, and 1,000 tons of oil were eventually spilled into the ocean. More recently in waters off Gibraltar a bulk carrier ran aground and leaked oil into the oceans. Those accidents do happen but one must ask whether they would have been prevented had the additional safety measures been introduced sooner.
On enforcement, 10 regulations relate to enforcement and with one exception, they all apply to the owner and to the master. Will the burden on reporting failure to comply with the regulations under the merchant shipping legislation be placed upon the ports and harbours? Can the Minister confirm which agency will be responsible for carrying out any necessary enforcement? What are the penalties for failing to comply? If fines are to be imposed, what level of fines would be applicable? If the Minister cannot provide those answers now, I am happy to receive them in writing. Continuing with the theme of enforcement, can she confirm whether our international counterparts are aware of the forthcoming changes? In addition, were trade union representatives consulted while the regulations were developed?
The high speed craft regulations seek to make amendments to chapter 10 of the IMO’s International Convention for the Safety of Life at Sea in relation to high speed craft. Those craft are typically rapid passenger craft but can also be cargo craft. Primarily, they operate domestically in UK waters, although some are known to operate between the UK and France. An example of a high-speed craft as defined in this SI is a Thames clipper. We can look out of our windows here on some days and see one. That category of vessel also covers hydrofoils and air-cushioned vessels such as hovercraft. I learned so much about pollution and hovercraft when we recently discussed a SI on the subject in this room.
We have many SIs to pass on account of a backlog, and I look forward to attending another one next Tuesday morning, and I am sure the Minister does as well.
The proposed regulations on high speed craft will further improve safety standards on those craft and will give powers to the UK to enforce those requirements against UK high speed craft, wherever they may be in the world, and also to use the same powers over non-UK high speed craft when in UK waters. Am I correct in assuming that theh international enforcement body is aware of the regulations, as I note there were only three responses to the consultation? Or perhaps it, too, was unable to distil the definition of the vessels affected because the formula was impenetrable to many. Indeed, in the explanatory memorandum the Law Society of Scotland asked whether the formula to determine whether a vessel is a high speed craft could be simplified. I share its concern.
I am assured that high speed craft know what they are, and are registered as such, and already compliant. Do the proposed regulations represent an international standard of which all high speed craft are aware? Is the criteria to determine high speed craft the same the world over? Are international high speed crafts aware they are in that category for enforcement purposes? If a high speed craft is found to be in breach of the regulations, I notice that the first option is a fine. There is no mention of the amount of the fine, so perhaps the Minister can apprise the Committee of that.
I welcome the opening up of the satellite service provider market that could drive down prices, but we would not want to see a reduction of standards. I raise the issue of standards because my attention was drawn to a line in the consultation that says that the risk-based assessment outlined in the legislation
“enables more flexibility for both industry and government in the application of safety standards.”
How and by whom will this be monitored ongoing? With that solely in mind, again were unions consulted? I have to say that the words “flexibility…in…safety standards” should send a shudder down all our spines.
We would never oppose anything that sought to improve safety standards on vessels, and for that reason, assuming we receive assurances from the Minister on the points I have raised, we will not oppose the measures.
As I have said in previous Committees, we have a backlog of a large number of SIs to get through. We are trying to clear that delegated legislation, and I would be interested to learn whether the Minister has any update on how and when we will clear the current backlog.
Lucy Frazer
It was a pleasure to get a football update from the hon. Member for Wythenshawe and Sale East, and to hear his points and questions. I am very pleased to hear that the Labour party will not oppose these important and sensible safety measures.
The hon. Gentleman asked a number of questions, and although I will not be able to answer all of them, I will answer as many as I can, and of course I will write to him on any outstanding questions.
On the level of fines, they will be unlimited in England and Wales and subject to a statutory maximum in Scotland and Northern Ireland. Trade unions were consulted on the bulk carriers, and a reminder was also sent two weeks before that consultation closed. The hon. Gentleman asked whether there was an obligation on ports to monitor repeat offences, and that task will be undertaken by port state control officers. He also asked whether international bodies are aware of the proposed changes. I would remind him that the SIs are implementing an IMO standard, so of course other countries have agreed to that standard at international discussions.
On international enforcement, all maritime administrations will know about their requirements. All HSC operators and enforcement agencies will know that their vessels are HSC. Fines in relation to high speed craft, just as for bulk carriers, will be unlimited in England and Wales, and subject to a statutory maximum in Scotland and Northern Ireland.
The hon. Gentleman mentioned the delay in consideration of delegated legislation. The Government are very conscious that it is important that we implement our international obligations. Unfortunately, we have had to implement a large number of measures on account of covid and other matters, and there has been some delay. We apologise for that, but as my predecessor told the Secondary Legislation Scrutiny Committee, the backlog will be cleared by the end of 2023. That is currently on track to be achieved, so I hope that offers the hon. Gentleman some comfort.
For all those reasons, I ask that the Committee to agree the Statutory Instruments.
Question put and agreed to.
DRAFT MERCHANT SHIPPING (HIGH SPEED CRAFT) REGULATIONS 2022
Resolved,
That the Committee has considered the draft Merchant Shipping (High Speed Craft) Regulations 2022.—(Lucy Frazer.)
Draft Digital Government (Disclosure of Information) (Amendment) Regulations 2022
(2 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary, Cabinet Office (Brendan Clarke-Smith)
I beg to move,
That the Committee has considered the draft Digital Government (Disclosure of Information) (Amendment) Regulations 2022.
It is a pleasure to serve under your chairmanship, Ms Fovargue. The purpose of the draft regulations is to allow information sharing between specified bodies for the specific purpose of identifying and targeting funded early learning and childcare for families with eligible two-year-olds in Scotland. They amend the Digital Government (Disclosure of Information) Regulations 2018.
The public service delivery power supports public bodies to improve or target the important public services which they provide. The power is designed to give public bodies the information needed to provide early intervention and vital support for those who need it or, where possible, to prevent the problems that reduce people’s life chances. In order to exercise the public service delivery power, the Government must set specific objectives for data sharing via regulations, and those objectives must meet specific criteria defined in primary legislation.
The draft regulations seek to establish a new objective for data sharing under the public service delivery power in the Digital Economy Act 2017 for identifying and targeting funded early learning and childcare for families with eligible two-year-olds in Scotland. The objective created through the draft regulations will enable data sharing from the Department for Work and Pensions and His Majesty’s Revenue and Customs to the Scottish Government, and the forwarding of that data to Scottish local councils. That will allow Scottish local councils access to the necessary information held by DWP and HMRC to enable them to identify households most in need, and then to directly contact those families to inform them of the support they are likely to be eligible for.
The territorial extent of the draft regulations is Great Britain, and their territorial application is England and Scotland. The draft regulations must be taken through the UK Parliament by the UK Government because information sharing under the proposed objective would involve disclosure and processing of data held by UK Departments: HMRC and DWP. The Scottish Parliament can only approve proposals for new objectives that solely involve specified Scottish bodies permitted to make use of the public service delivery power.
Legal gateways already exist in England and Wales to enable data sharing to support delivery of early learning and childcare. The draft regulations will bring Scotland parity of service provision with that already enjoyed by families in England and Wales. Data sharing is a vital and effective way of identifying individuals and households experiencing problems that reduce their life chances. Access to high-quality early learning and childcare is a key factor in determining life chances.
There are safeguards in place to protect personal data from misuse. The objective has already been subject to scrutiny by the Public Service Delivery Review Board, which oversees the use of the public service delivery power, as set out in the underpinning code of practice. The review board comprises specialists working in the UK Government and the devolved Administrations, as well as public representative bodies and civil society groups. Officials from the Information Commissioner’s Office also attend as observers.
The board is tasked with considering proposals for new objectives for data sharing under the public service delivery power and making recommendations to Ministers. The board’s recommendation to take forward the draft regulations was approved by the relevant Minister as they meet the criteria set out in section 35 of the 2017 Act for objectives under the public service delivery power, enabling the sharing of personal information to support the improvement or targeting of public services to individuals or households in order to improve their wellbeing.
Furthermore, the objective has been subject to public consultation. Responses to the statutory public consultation were decidedly positive, with up to 94% of respondents agreeing that the proposed data sharing would improve services and target them to eligible households, and 88% agreeing that data sharing would improve wellbeing for those households. Some 86% of respondents also agreed that the data sharing would deliver tangible benefits to households, including early-stage support to promote education, health and social equality. Importantly, 87% of respondents agreed that the personal data items to be shared, specifically including the customer name—that is, the parent or carer name—address and national insurance number, as well as the child or children indicator to confirm the existence of a child or children, are appropriate for early learning and childcare service delivery.
Parliamentarians have already approved the code of practice and the Digital Government (Disclosure of Information) Regulations 2018, which established public service delivery objectives. Sharing personal data will, understandably, tend to attract attention and scrutiny. However, the power, as with other data-sharing powers in part 5 of the Digital Economy Act 2017, must be exercised in compliance with the data protection legislation and UK GDPR.
There is an underpinning code of practice that sets out how the power must be operated, and this includes setting out how any data shared under this power must be processed lawfully, securely and proportionately, in line with data protection legislation. Anyone making use of any objective must have regard to the code. The code of practice also requires that information-sharing agreements are included in a public register of information-sharing activity under the powers.
I hope colleagues will join me in supporting the draft regulations. I commend them to the Committee.
Sarah Owen (Luton North) (Lab)
It is a pleasure to see you in the Chair, Ms Fovargue. I apologise that the relevant shadow Minister cannot join us today: I will do my best to fill her shoes on this important issue. The Opposition welcome this instrument. We are grateful that the Government are making efforts to communicate better with working families across the UK. Sadly that is especially needed now after the pain that has been inflicted on them through the economic chaos of the mini-Budget that left many families wondering how they can feed their children, heat their homes and keep a roof over their heads.
Whatever lifts the burden and makes families’ lives a little easier is to be welcomed. It is especially crucial to have such engagement with families with regard to the education and care of small children. We will always support and advocate for more measures that help each child have a strong start in life. Therefore, we will not oppose the regulations today. I wish only to ask some questions and probe the legislation so that it is as strong as possible.
With that in mind, would the Government share in more detail how they intend to address concerns around data-sharing processes and how they will ensure that the data is not misused? I know the Minister touched on that issue, but given that we are talking about very young children and potentially very vulnerable families, it would be good if he could elaborate a little more on that important point. Can the Government also advise of any other objectives in England or any of the devolved nations that could be better served if information were shared by central Government using provisions under the Act? Will the Government review other possible avenues at a later date?
A significant criticism of the Government’s pandemic response was central Government not sharing data with local authorities for the purpose of things such as test and trace. Could a similar SI be laid in the future to ensure better communication between central and local government on objectives relating to public safety? Those are our questions at present, but as stated, we are content to see the regulations pass today.
Kirsty Blackman (Aberdeen North) (SNP)
I appreciate you taking the time to chair the Committee today, Ms Fovargue. I am grateful to the Minister for setting out the intentions behind the regulations. It is disappointing that the Scottish Government do not have the powers to do this ourselves. We do not have the information because we are not in full control of all of these things, including HMRC and DWP. We would certainly have a significantly better social security system than the UK has at present.
As a former local authority councillor—like my hon. Friend the Member for Edinburgh North and Leith—I can say from experience that local authorities in Scotland are very used to working with a lot of highly sensitive data. They have responsibilities for social care, social work and nursing provision, for example. They deal with all that data in accordance with the law and treat it with the sensitivity with which it needs to be treated.
The regulations are sensible and should be passed, in order to ensure that councils have the information and can say to parents of eligible two-year-olds, “Here is your funded childcare place, please take it up and here is more information about how to access it.” Between September 2020 and September 2021, we saw a 25% increase in the number of two-year-olds taking up those places, and we hope to see that increase further so that all of those eligible can access those services if they choose.
Lastly, the provision of free and accessible childcare is important because it gives parents the opportunity to choose whether to work. I and others like me could not make that decision because we did not have access to the same amount of funded childcare as people across Scotland and, indeed, the UK now have. It has made a significant difference to the lives of families, and I am pleased that this data-sharing agreement will allow even more families to benefit from funded childcare.
Christian Matheson (City of Chester) (Lab)
I do not intend to delay you, Ms Fovargue, or the Committee for much longer.
I welcome the speech made by the hon. Member for Aberdeen North. The purpose of the regulations is to improve funded childcare in Scotland, but I hope that Scotland will not have the same experience as we have had in England. In 2015, I served on the Childcare Bill Committee, which introduced the funded childcare arrangement. In the 2015 election, my party proposed a funded and costed policy for 25 hours of free childcare. The Conservatives, under the leadership of David Cameron, decided to trump that by offering 30 hours. It was a fine political move, but it had not been costed and they had not thought about it. Even by the time of the Bill Committee—Sam Gyimah, our former colleague, was the Minister—they had no clue where the money was going to come from or where it was going to go.
I am very concerned that we will put these regulations through—my party supports them and is not seeking to block them—but that Scotland will experience the same problems as those experienced by England and, I am guessing, Wales. The problem is that the principle will be agreed to, but without any mechanism or funding.
Kirsty Blackman
I reassure the hon. Gentleman that we already provide funded childcare for two-year-olds. These regulations will allow us to address those who do not have the funded places for which they are eligible. The way in which local government in Scotland works means that a concordat is signed between the Convention of Scottish Local Authorities and the Scottish Government about things such as how this will be delivered, and this is being signed as part of the concordat.
Christian Matheson
I am really grateful to the hon. Lady for that information, which reassures me a little. I only hope that the Government will now look south of the border to try to improve the provision of childcare in England, which is still chaotic and hit and miss.
Brendan Clarke-Smith
I would like to address some of the points that have been made and to wish the hon. Member for Putney, who is unable to be with us today, a speedy recovery.
The hon. Member for Luton North made some sensible suggestions. First, on safeguards, we are aware of the risks regarding the misuse of people’s personal data. The data-sharing provisions in part 5 of the DEA include a number of robust safeguards. The most important, as we have mentioned, is compatibility with and strict adherence to the Data Protection Act 2018 and UK GDPR. The DEA also goes further. It includes a number of other safeguards, such as sanctions for unlawful disclosures, including custodial sentences in some cases. The public service delivery powers are permissive, which means that the authorities listed in schedule 4 can choose whether to use them or not, and that safeguarding prevents inappropriate data-sharing.
Sarah Owen
I appreciate the severity of those reprimands should data breaches take place, but could the Minister tell us how many people have actually received custodial sentences as a result of a data breach? We are talking about particularly young people’s data, so I want to ensure that the existing regulations are tight enough.
Brendan Clarke-Smith
I am happy to write to the hon. Member with the exact figures, so that there is a record of them. I share her concern; it is important that appropriate enforcement action is taken.
As new public service delivery objectives are created by regulations under the affirmative procedure, new objectives will be defined before data sharing can commence, and that will follow public consultation and parliamentary scrutiny.
The public service delivery powers have not yet commenced in Northern Ireland; the policy does not apply there at the moment. The objective relates only to Scotland; however, our respective officials have engaged on the possibility of having equivalent objectives for Northern Ireland. We recognise that that would be contingent on the commencement of devolved government in Northern Ireland.
With regard to statutory instruments, the UK Government are taking the objective forward at the request of the Scottish Government. The territorial extent of the regulations is the UK, but the regulations apply in England and Scotland only. The Government are required to consult the devolved Administrations, and formal consultation was carried out with them. Furthermore, there is ongoing liaison at official level to ensure that the views of Welsh and Northern Irish colleagues are fully accounted for. On the point that the hon. Member for Luton North made about SIs, I am more than happy to provide information on where we are on that.
The hon. Member for Aberdeen North is clearly passionate about making sure that we deliver the funding to those who are eligible; that is what this is all about. We already get the relevant information from Scotland; it is important that we reciprocate.
The objective will benefit Scottish families with eligible two-year-olds by increasing their access to funded early learning and childcare. If eligible families were to purchase the funded hours, it would cost them around £5,000 per eligible child per year. Another benefit for families is the narrowing of the poverty-related outcomes gap for children facing the most disadvantage. As the hon. Member for City of Chester said, that is very important. We want to make sure that we support families. I have a young family and have benefited from various Government schemes. I do not know how our working family would have managed without them, so I speak from first-hand experience. I fully take on board what he said. As for other benefits, the objective will provide parents with increased opportunities to be in work, training or study, and will improve family wellbeing.
I thank the Committee for taking the time to scrutinise the draft regulations, which will enable more effective use of data, so that we can better support the most vulnerable in society and deliver better outcomes for our citizens. I hope that colleagues will join me in supporting the regulations, which I commend to the Committee.
Question put and agreed to.
Ministerial Correction
(2 years, 1 month ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Levelling Up, Housing and Communities
(2 years, 1 month ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Hilary Benn
As well as having to cope with the cost of remortgaging, thousands of people who thought they had bought a safe and secure home are still living with unsafe cladding and other fire-safety defects. What is the Secretary of State’s current assessment of the total number of properties in England that have yet to be made safe?
Mr Clarke
My commitment to making sure that we follow through on the issue of remediating unsafe buildings is total. There are 24 buildings over 18 metres that have yet to be remediated in the way that the right hon. Gentleman sets out.
[Official Report, 17 October 2022, Vol. 720, c. 369.]
Letter of correction from the Secretary of State for Levelling Up, Housing and Communities, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke):
An error has been identified in my answer to the right hon. Member for Leeds Central (Hilary Benn).
The correct response should have been:
Financial Services and Markets Bill (First sitting)
Wednesday 19th October 2022
(2 years, 1 month ago)
Public Bill CommitteesRead Full debate Financial Services and Markets Act 2023 View all Financial Services and Markets Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 19 October 2022 - (19 Oct 2022)
The Chair
I have a couple of preliminary announcements to make. Hansard colleagues will be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Date Time Witness Wednesday 19 October Until no later than 10.10 am Prudential Regulation Authority Financial Conduct Authority Wednesday 19 October Until no later than10.40 am TheCityUK UK Finance Wednesday 19 October Until no later than 10.55 am Payment Systems Regulator Wednesday 19 October Until no later than 11.25 am Association of British Insurers Investment Association Wednesday 19 October Until no later than 2.25 pm The Bank of England Wednesday 19 October Until no later than 2.45 pm Which? Wednesday 19 October Until no later than 3.10 pm Access to Cash Group Fair by Design Wednesday 19 October Until no later than 3.10 pm New Financial Wednesday 19 October Until no later than 3.55 pm Association of British Credit Unions Ltd. Building Societies Association Wednesday 19 October Until no later than 4.10 pm CIFAS Wednesday 19 October Until no later than 4.25 pm Innovate Finance Wednesday 19 October Until no later than 4.40pm Mr Martin Taylor
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions before the oral evidence session. In view of the time available, I hope that we can take those matters formally, without debate.
Ordered,
That—
1. the Committee shall (in addition to its first meeting at 9.25 am on Wednesday 19 October) meet—
(a) at 2.00 pm on Wednesday 19 October;
(b) at 9.25 am and 2.00 pm on Tuesday 25 October;
(c) at 11.30 am and 2.00 pm on Thursday 27 October;
(d) at 9.25 am and 2.00 pm on Tuesday 1 November;
(e) at 11.30 am and 2.00 pm on Thursday 3 November;
2. the Committee shall hear oral evidence in accordance with the following Table:
3. proceedings on consideration of the Bill in Committee shall be taken in the following order: Clause 1; Schedule 1; Clauses 3 to 7; Clause 2; Schedule 2; Clause 8; Schedule 3; Clauses 9 to 13; Schedule 4; Clauses 14 to 20; Schedule 5; Clause 21; Schedule 6; Clauses 22 to 46; Schedule 7; Clause 47; Schedule 8; Clause 48; Schedule 9; Clause 49; Schedule 10; Clause 50; Schedule 11; Clause 51; Schedules 12 and 13; Clauses 52 to 63; Schedule 14; Clauses 64 to 73; new Clauses; new Schedules; remaining proceedings on the Bill;
4. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 3 November.—(Andrew Griffith.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Andrew Griffith.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Andrew Griffith.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and circulated to Members by email. We will now go into private session to discuss lines of questioning.
The Chair
Before we start hearing from the witnesses, do any Members wish to make any declarations of interest in connection with the Bill?
Stephen Hammond (Wimbledon) (Con)
I guide the Committee and witnesses to my entry in the Register of Members’ Financial Interests.
Craig Tracey (North Warwickshire) (Con)
I chair the insurance and financial services all-party parliamentary group and am a former insurance broker.
Peter Grant (Glenrothes) (SNP)
I have money saved and invested with Nationwide building society, which has submitted evidence on its own account. I am also with a credit union that I believe is affiliated to the association of one of the witnesses.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I am chair of the all-party parliamentary group on blockchain.
Gareth Davies (Grantham and Stamford) (Con)
I am a vice-chair of the APPGs on environmental, social, and governance and on financial markets and services. I also spent 14 years in financial services and my wife works in financial services.
Shaun Bailey (West Bromwich West) (Con)
I am chair of the all-party parliamentary group on financial resilience.
Sally-Ann Hart (Hastings and Rye) (Con)
My husband and two sons work in financial services.
The Chair
Anybody else? No.
We will now hear oral evidence from Sheldon Mills, interim executive director of strategy and competition at the Financial Conduct Authority; Sarah Pritchard, executive director of markets at the Financial Conduct Authority; and Victoria Saporta, executive director of prudential policy at the Prudential Regulation Authority. Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings in the programme order that the Committee agreed. For this panel, we have until 10.10 am. Will the witnesses please introduce themselves for the record?
Sarah Pritchard: I am Sarah Pritchard, the executive director of markets at the Financial Conduct Authority.
Sheldon Mills: I am Sheldon Mills, the executive director for consumers and competition at the Financial Conduct Authority.
Victoria Saporta: I am Vicky Saporta, the executive director of prudential policy at the Prudential Regulation Authority.
The Financial Secretary to the Treasury (Andrew Griffith)
Q
The opportunity of the Bill, which will be the first piece of ab initio legislation for 23 years in the financial services domain, is to help the effective functioning of financial markets in society and to help the economic prosperity on which we all depend. Will you talk a little about how you see the opportunities in the Bill? How do you think about the competitiveness of the UK regulatory corpus? How would you advise the Committee on making the best advantage of changes in technology—such as digital ledger technology, but that is just one—and of the opportunity to pare back the corpus of inherited European legislation to those purposes?
Victoria Saporta: Thank you, Minister. I very much agree with your comment that the Bill presents a unique opportunity to set a framework for financial services that is world leading and the best in practice internationally. In my view, the Bill as introduced on First and Second Reading achieves that.
I will pull out a couple of things that I think are particularly important. Best international practice, as set out by international standards setters and the IMF, is for operationally independent regulators to pursue technical rule making based on the framework and objectives set by Government. That is because there is plenty of empirical evidence that the operational independence of regulators is associated with better financial stability and economic stability outcomes. That is very much recognised among the financial regulatory community internationally, and it supports competitiveness.
That is important, particularly for a global financial centre, which we have the pleasure to have here in London and the UK, because, as the IMF said in its recent FSAP of the UK, financial stability is a global public good within the UK. Our actions over here, as we have seen in recent events, can spill over to other markets. It is therefore very important that we have this high international standing so that regulators who allow firms to come to London to be regulated by us can have trust in that.
The Bill achieves all of that, but it gives us greater powers, and with greater powers must come greater accountability. We at the PRA and the Bank really welcome that greater accountability. We always have seen our policy frameworks as being supported by accountability to Parliament, and the various provisions and amendments support that.
On competitiveness, there is a new secondary objective that did not exist before, which says that we must pursue competitiveness and growth in the medium and long term as a secondary objective. That is, as long as we are advancing safety, soundness and financial stability within the PRA’s remit, we should look at the options that advance competitiveness and growth in the medium and long term.
We think that is the correct balance. It will allow us to take a very proactive approach to competitiveness. The PRA issued our approach to the Bill, as it currently stands, to aid accountability to you. In that discussion paper, we set out some thoughts about how we would go about doing that. The Bill also has certain areas that would help fintech in the UK.
Andrew Griffith
Q
Sheldon Mills: I will be brief, in the interests of time. Clearly, the Bill represents a significant opportunity—almost a once-in-a-generation opportunity—to transform financial services regulation. There are a few components to that. The first is the fact that the regulators will be given the powers to transpose the retained EU law into UK law. That provides an opportunity for us to think in terms of the UK financial services system and what we need to support UK financial services and ensure that we are a leading centre, worldwide, for financial services.
We welcome the other opportunity in the Bill—the secondary competitiveness objective—on the basis that it provides a spur to us to think about growth and competitiveness as we pursue our primary objectives of competition, consumer protection and market integrity.
The final point, which goes to your point about the corpus of rules, is that I think some of the powers, and some of the exhortations in the Bill for us to review our rules, are important. It is important for us always to have an efficient rule book and system so that we do not place as much burden on business as we otherwise would, and so that the system is certain, consistent and effective. There are genuine opportunities in the Bill.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Q
Sheldon Mills: Of course. It is a matter for Government as to what amendments they put to Parliament, and it is then a matter for Parliament as to what you do with them. You always have to be careful as a regulator not to tell Parliament what to do, but I will put some thoughts forward.
Independence needs to be at the heart of the regulatory system, so I think it will be important, if and when that amendment is put forward, to think about how the independence of the regulators is sustained. I understand from Government pronouncements that there is a commitment to the independence of the regulators, and that the proposed amendment, which I have not seen, is meant to ensure that where a public interest mechanism is needed—where the Government wish to think about the public interest—there is one to bring forward.
I have worked in regimes with public interest tests. I ran the mergers division at the Office of Fair Trading and the Competition and Markets Authority, and my learning from that is that, if put in place, such a test should be used exceptionally and with care, and that there should be specificity about the matters of public interest—in this case, financial services—on which it would be used.
We are working constructively with HMT in relation to this, and we would do so if such a power were introduced. The only point I would make—Vicky may come to this—is that the standing of the UK financial system is also built on its independence and its consistency of regulation, and it is important that we think through that as we design this regime.
Victoria Saporta: I very much agree with what Sheldon said. We have not yet seen the amendment, so we have to reserve judgment on it, but it will depend on the formulation.
A formulation whereby the Government can force or direct us to make or amend rules that we have already made, and that fall squarely within the statutory objectives that Parliament has given us, may be perceived as undermining operational independence and all the benefits that I talked about earlier. That could have adverse implications for our international standing and, ultimately, our competitiveness.
A formulation that is squarely outside our objectives—for matters of national security, for example—and does not have to do with safety and soundness, or the other objectives and “have regards”, could be a different matter if it is tightly done.
Finally, sometimes I have read in the press and in previous ministerial comments that it makes sense in a parliamentary democracy to ask the regulators to take another look. I just want to say that in clause 27 there is a review power that gives the Treasury powers to force us—to direct us—to take another look and, indeed, to appoint a third party to do so.
Peter Grant
Q
Sheldon Mills: Of course we have had discussions with HMT in relation to the proposed amendment. I personally have not seen it.
Peter Grant
Q
Sheldon Mills: That was some months ago, but I recall that in the context of the British Steel pension scheme we have a power that allows us to do some particular things that provide redress en masse for British Steel pension holders. That is what we are using. We have most of the powers that we need to support British Steel pension scheme holders. The Bill does not interfere with any of our existing powers. I do not think it gives us any additional powers that are relevant to the British Steel pension scheme holders issue.
Peter Grant
Q
Sheldon Mills: I think that what we would have said—I would need to look at the record to see the context—is that, effectively, we have to go through due process and understand the evidence and the data that would be there to see how those independent financial advisers are behaving. Therefore, the speed and processing of that may be what we were referring to.
If I remember at the time in relation to the British Steel pension scheme, the law was changed to allow people to exit their pensions under pensions freedoms. There was a range of issues in relation to understanding how independent financial advisers were going to respond to that. The speed and pace with which they did respond led to issues such as some of the challenges that British Steel pension holders have now. To confirm: there is nothing the Bill that specifically gives us additional powers in relation to those individuals.
Sarah Pritchard: I want to come in on a slightly broader point, which is that in the transfer of retained EU files, which encompasses part of the Bill, there are some EU files where, at the moment, the FCA will have limited lawmaking powers. The Bill will provide a framework that, file by file, the FCA will need for rule-making and enforcement powers to be considered at that time. That does not answer your question specifically in relation to British Steel, but it provides a mechanism, so you go through that analysis and assessment file by file.
Stephen Hammond
Q
Victoria Saporta: In the financial regulatory space, the only example I know of where there is a test whereby the Government—I am not talking about Parliament—can intervene and revoke regulatory rules is in Australia. APRA—the prudential regulatory authority in Australia—has never been exercised. Whenever the IMF has done financial sector assessments, it has been critical. There are provisions, again in Canada, but the US system does not have any. It is Congress who can revoke material pieces of regulatory standards within 60 days. This is my understanding of it in financial regulation, which is separate to how it might exist in other types of regulation.
Stephen Hammond
Q
Sheldon Mills indicated assent.
Stephen Hammond
I just wanted to ensure that was on the record. Can we talk a bit about the metrics and transparency you might use to show that you are meeting the secondary objective—that the cost-benefit panel’s analysis will be transparent—and also how you consider you will need to show that you have met the accountability tests?
Sheldon Mills: Sure. I am happy to start with that. We are waiting to see the final description of the clause on competitiveness. Its current iteration talks about competitiveness and growth. It also talks in terms of the medium and long-term growth of the financial services sector and the UK economy. We have started to think about what the input measures we might see. Those are the things we can act upon ourselves.
A good example of that would be our gateway—our authorisations process. Is it as efficient as it can be? Does it place unnecessary burdens on time, pace and the application of it? That can help with the entry of firms into the UK. That is important. We are doing work on our gateway now. That is something on the input measures, but we then need to think about the outcomes. It is important to think about what data and metrics are available that have a causal chain between some of the activity we have—our authorisations activity, our policy activity and so on—and the outcomes we are seeking to achieve. One of the challenges we have is that the data on the link between financial services activity and growth and competitiveness—regulatory activity—is not significant. That said, we are looking proactively to see what measures we can find.
There are also two components to those outcomes. There is the activity that our financial services industry is providing, such as lending and support in terms of insurance and so on to UK firms and overseas. Then there is an outward form of competitiveness, thinking about how our UK plc financial services industry is doing in exporting financial services across the world. Both of those will be outcomes we will need to find measurements on.
Finally, there is the meta outcome. There is certainly Office for Budget Responsibility data that talks about sustainable growth. What is the higher level growth-type outcome you can look at and seek to link? I do not have the full gamut of that, but we are working very closely on it, so that we can provide measures and metrics that can support our use of the objective.
Stephen Hammond
Q
Sheldon Mills: Of course, absolutely. We will be transparent on that.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Q
The Government have opted so far to not have a “have regard” for financial inclusion in the Bill. Do you believe that such a “have regard” for the FCA would ensure financial inclusion as a greater priority for the regulator? What else could be done with the Bill to ensure that financial inclusion is given a greater prominence?
Sheldon Mills: I hope we won’t have the same conversation as before. We have done some more work on financial inclusion following our conversations. Our position is still the same: we do not think we need a “have regard” on inclusion. We don’t think that that would add to our ability to act within our remit in line with our objectives. We have our consumer protection power and we have put in place our new consumer duty, which asks firms to meet a higher standard. We feel that we have sufficient powers to fix any problems that we feel we need to solve.
As we discussed last time, the regulator’s role is to support firms and the market to deliver to as many consumers as possible, including those who are vulnerable or might be excluded. However, we do not do that alone; we do that with partners such as Government, local authorities, charities and others. In relation to that, we are taking a proactive role and arranging a financial inclusion policy sprint in the autumn, working with Fair4All Finance and others. We will bring as many actors as possible into that space, using our innovation labs to work through the types of innovative activity we can put the financial services industry to in terms of tackling financial inclusion.
At the moment, we do not think we need a “have regard” given our current remit and the powers we have.
Emma Hardy
Q
Sheldon Mills: I have worked with HMT and supported the inclusion of a few things in the Bill that might help with this matter. One reason why the financial services sector has adopted more of a risk-based approach to the customers it serves relates to the risks it faces of follow-on redress and other damages. There is always a balance between what you pay out to consumers who might well be harmed now and what happens with future consumers.
In the Bill, we have a duty of co-operation between us, the Financial Ombudsman Service and a few other regulators. We will try to ensure that we are managing some of the extensive use of claims management companies, which puts quite a lot of pressure on firms. Firms should pay redress and compensation where that is necessary, but there is a lot of pressure on those firms. We have to have a reality as to how things work in how the commercial world. That means that boards can then become more risk averse in terms of the services they offer.
I am keen to get some of our largest and smaller institutions innovating around expanding the number of customers they serve. People are keen, but we have to have the balance of how the system works in order to support that.
Another area in the Bill, or in our proposals, that will help is in relation to credit unions. After our action against certain high-cost, short-term credit firms, we are already seeing that credit unions are taking more of a share of credit being provided to people who might be in a category that borders on exclusion. Anything that can support credit unions safely expanding—I have the PRA to my left—will be really helpful for the communities underlying this discussion.
Emma Hardy
Did you want to add anything, Victoria?
Victoria Saporta: No, I think Sheldon has covered it.
Gareth Davies
Q
Sheldon Mills: I’m not aware of one. Vicky?
Victoria Saporta: Singapore has one. Its financial stability, however, is primary; it overrides the competitive objective, which is secondary. There is the Hong Kong Insurance Authority. Otherwise, it is not common, particularly for prudential authorities, which is what I know about.
Gareth Davies
Q
Sheldon Mills: We do not like to comment on other financial centres, but, yes, I would consider them to be robust financial centres.
Gareth Davies
Q
Sheldon Mills: Yes, in certain respects.
Gareth Davies
Which respects?
Sheldon Mills: I think they are competitors to the financial services system. The UK is extremely strong, varied, and has a multiplicity of financial services. Some of the competition that comes from some of those regions is quite specific in terms of what it seeks to compete with. We have a very broad-based financial services system.
Gareth Davies
Q
Sarah Pritchard: From an FCA perspective, it is very much as Sheldon has said. It is important to say we support the Bill as it is currently framed. We think a secondary competitiveness objective can work alongside our primary statutory objectives. It will give us another lens through which to look at the policy work and the development of the regulatory agenda that we are taking forward. Back to the points raised previously on transparency and accountability, it will give us another method by which we will be reporting and considering our outcomes against. We will take that into account. We think it can work as a secondary objective.
On the various elements that make up competitiveness that have been touched on earlier, I think that innovation and ensuring that we can stay ahead of the game with the pace of development across the financial services markets is really important. You can see the financial markets infrastructure sandbox proposals contained within the Bill. There are proposals there on critical third parties as well, so you can already see on the face of the Bill in those particular areas a real desire to make sure that the UK can stay in lockstep or stay competitive as a country enabled through the way in which the financial services regulatory framework is developed going forward.
I think the agility is important. We often hear that regulators are too slow. Sometimes we hear that regulators are too fast in terms of putting out too many consultations. Clearly there is a balance there. We have shown ourselves able to act at speed through the Russia-Ukraine conflict and introduced new rules on side pockets to enable support in that context of war. We will need to maintain that flexibility to be agile when we need to, while retaining the checks and balances that are really important in terms of transparency and accountability.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Q
Sheldon Mills: Thank you very much for the question. The first framing point to this question is to understand that banking services have and are changing, and there are many, many benefits of those changes. The move towards digitalisation of banking services provides a huge amount of support to many people who are vulnerable. My mother is deaf and the change to a digital means of banking services has transformed her life completely.
The starting point must be that we have to consider the variety of ways in which people can provide banking services. That said, we know that, locally, branches can be important for communities. It is not just branches. It is a point at which people can deposit money and take out money. You can have a variety of those. They can be branches or post offices. They can be what we are trying to encourage the industry to develop when they close branches.
Siobhain McDonagh
Q
Sheldon Mills: I am coming to it. In the light of that, what we have sought to do as we have seen firms decide to close their branches in the face of changing to digitalisation—there is the cost of keeping branches, which are very underutilised—is ensure that they look very closely at the alternatives to those branches when they go through those closure plans. We have had branch closure guidance in place for almost a year now. We work very closely with all the largest lenders and institutions to monitor their branch closure activity and ensure that they are providing appropriate services to those who need them in those localities as they seek to close some of those branches.
In terms of access to cash, the majority of the population—99.7% of the UK population—is within 5 km of a free-access cashpoint. We welcome the Government’s proposals on access-to-cash legislation so that we can get greater powers to ensure certain aspects of access to cash.
Siobhain McDonagh
Q
Sheldon Mills: We are using our existing “treating customers fairly” principle in order to put pressure on banks to ensure that they are looking after those customers that you talk about, who are vulnerable, in those communities and providing them with alternatives to branches if they close. Our updated guidance, which is stronger, asks for those alternatives to be in place before they close that last branch in town. It also deals with partial closures and issues such as that. I have been out to many local communities in order to see the impact of branch closures, and I have been public in terms of saying to the banks that they need to pick up the pace in relation to the alternatives for those communities: banking hubs, mobile banking and other activity. We are working very closely with LINK, which is currently helping the banks with the banking hubs, and seeking to get them to pick up that pace.
Siobhain McDonagh
Q
Sheldon Mills: I would be very happy to do so.
Siobhain McDonagh
And I will show you around. It is a great place. I will even buy you lunch in one of the cafés.
Sheldon Mills: I am sold—I will come.
Siobhain McDonagh
Q
Sheldon Mills: Yes, these are real, genuine issues for people and I do understand them. We have researched some of the ways in which people access cash but also branches. It is important that all the institutions—I will not mention individual institutions—should be willing to speak to their customers and their communities as they close branches, because that is the way to understand what alternatives they need to be providing to those services. We recently worked with a major provider and we got it to pause its branch closures while it made a significant assessment and researched the needs of the local community, and then it was able to provide for that, so we are proactive in relation to this. I would be very happy to come to Mitcham and understand what is going on there.
Siobhain McDonagh
Q
Siobhain McDonagh
If people have to pay £1.99 every time they try to access £10 from a machine to keep them going for the week, that is a huge premium on being poor. In Pollards Hill in my constituency, we have only two pay-for machines, and that is what happens on a daily basis—people have to pay £1.99 for every bit of money that they get out. People take small amounts of money to try to control their budgets. We were delighted when the Co-op came to the parade, but it could not get free cash machines because its lease prevented it from having one.
The Chair
Order. I am afraid that brings us to the end of the time allotted for this panel.
The Chair
No. That is the time allotted for the Committee to ask questions.
Sheldon Mills: We would be very happy to write to you.
The Chair
I thank our witnesses on behalf of the Committee.
Examination of Witnesses
Emma Reynolds and David Postings gave evidence.
The Chair
We will now hear oral evidence from David Postings, chief executive officer of UK Finance, and Emma Reynolds, managing director of public affairs, policy and research for TheCityUK. We have until 10.40 am for this panel. Will the witnesses please introduce themselves for the record?
Emma Reynolds: Emma Reynolds, managing director of public affairs, policy and economic research at TheCityUK.
David Postings: David Postings, chief executive of UK Finance.
Andrew Griffith
Q
David Postings: Thank you, Minister. The UK is an extremely competitive financial services centre, and has been for decades. The exit from the EU provides us with some challenges and some opportunities. The Bill has been worked on by my team in conjunction with HMT and the regulators, and we are very pleased with the content, particularly with regard to wholesale and capital markets. The amendments to EU legislation that it contains are quite detailed and technical, but they help with the competitiveness of the market and of the UK in that market.
Andrew Griffith
Q
David Postings: They welcome it. I think it is really important. It gives us balance and the opportunity to make sure that the regulator has regard to that. Ultimately, being a more competitive financial services centre will generate greater tax revenues for the UK and growth—which are really important—as well as stability.
Andrew Griffith
Q
Emma Reynolds: Thank you, Minister. I reiterate that the UK is one of the world’s leading international financial centres. I agree with David that exiting the EU has brought both challenges and opportunities. On the opportunities that the Bill presents, we absolutely welcome the new secondary objective on international competitiveness and economic growth. The industry has been calling for that for some time. The Bill is a result of many years of the Treasury consulting our industry, and overall we are very supportive of it.
If the objective is done properly and the regulators meet it, it gives us an opportunity to tailor the UK’s regulation to our market. Obviously, we do not have 27 member states to negotiate with any more, so we have an opportunity to tailor to our market. However, we want high standards, not low standards. We want the benefits of regulation, and any changes to regulation, to outweigh the costs. We want regulation to be proportionate to the risk involved. Obviously, all that will be rooted in many international agreements to which we have signed up as a country.
We think there are great opportunities here to enhance our competitiveness, but the proof will be in the pudding, rather than the Bill itself. The Bill enables that to happen, but it is very important that the Treasury and Parliament hold the regulators to account on their new secondary objective.
Andrew Griffith
Q
David Postings: If it is true, it should worry us —absolutely. I think the Bill is a good first step in addressing some of those issues. We have had the Lord Hill review, and its recommendations are contained in the Bill. The changes to the double volume cap and the share trading obligation will help the UK’s competitiveness and our ability to grow that share.
Emma Reynolds: We are in a very competitive environment, and I think the UK is losing out to New York, when it comes to listings. We need to focus on that. We should not be complacent. Obviously, there is very big competition from the Asian international financial centres, too.
Tulip Siddiq
Q
Emma Reynolds: First, let me say that we have discussed this power with Treasury officials, and we have submitted a paper to the Treasury and this Committee about how it could be defined. As one of the regulators said earlier, with greater power—obviously, this Bill and the exit from the EU confer a lot of new powers on the regulators—comes greater accountability.
There is a balance to be struck between enhanced regulatory accountability and maintaining the day-to-day independence of the regulators, which is something that international investors and businesses appreciate, because it leads to a stable regulatory environment. If the intervention power is tightly defined and used as a matter of last resort, you can minimise the risks. We think it could be a very reasonable instrument and power to take, given the circumstances and the transfer of power.
David Postings: The EU regulation was constructed through primary legislation in the main, with the agreement of a number of countries in the EU. That is now being put into the rulebook in the UK, so the regulators have tremendous capability to amend those regulations. It is not unreasonable to have a power that allows Parliament to scrutinise that kind of thing. We have not seen a draft clause, but we have talked to the Treasury and the regulators about this.
The most important thing is that it is used sparingly and drawn tightly. The best overseas example that we could come up with was the Australian example. I believe that it has never been used, but it is there in extremis. It should be something that is very rarely used and not politicised. We need to get the balance between the scrutiny of the regulators and not politicising it. That is a very difficult trick to pull off, but we should be able to do it.
Tulip Siddiq
Q
Emma Reynolds: The first question is very difficult to answer. I think it is probably one for the Government, if you do not mind me saying.
The answer to the second question is that there are occasions where regulation is not designed to meet the expected outcome—there could be a case where the regulator is not aware of national security risks—so there are occasions where such a power could be used. As I said before, it needs to be tightly defined. Defining a trigger would be useful, but equally you do not want to define it so tightly that it could never be leant on or even used. Given the amount of power that the regulators are being given, we think it is important that the broader societal and economic impact of the regulation is something that both Government and Parliament have the power to have a say in, if that regulation is deemed not fit for purpose.
Tulip Siddiq
Do you have anything to add, David?
David Postings: I don’t really, no.
Stephen Hammond
Q
“The Financial Services and Markets Bill should be amended to include a power to require regulators to transparently report metrics”.
I wonder if you could comment on that a little, please.
Secondly, you have mentioned proportionality, and again in your written evidence to us you suggest that there may necessarily need to be more of it when we consider the risk, the nature and the scope of businesses, who they are there for and who their customers are. Does the Bill set the right tone for proportionality, or do you think there is still more we should consider?
Emma Reynolds: To take your first question, we think it is important that the regulators are not marking their own homework with regard to the secondary objective. We welcome what the PRA said earlier and the discussion paper it has put out, but we do think the Treasury could take upon itself a power to demand that the regulators report more frequently and when the Treasury has some concern about whether they are meeting the new secondary objective. We do think the Bill should go further in that regard. We do not want this objective to just be in an Act of Parliament and for it to never really be a reality. The question is, “Does this bite?” That is what a lot of our members are saying. We think there are ways that you could hold the regulators to account on that.
Does the Bill set the right tone on proportionality? At its core, it is an enabling Bill, so the proof will really be in the pudding. We hope so. Hopefully, the secondary objective will mean that the regulators will take that very seriously—that their regulation should be proportionate—so we hope so, but it remains to be seen.
Stephen Hammond
Q
Emma Reynolds: Indeed.
Martin Docherty-Hughes
Q
David Postings: I think it needs to be broad, because the digital asset environment can change quickly, and if you define things too narrowly, you risk missing the next wave of change. Yes, I think it is good and wise to define it broadly.
Martin Docherty-Hughes
Q
Emma Reynolds: The definition is broad and, as I understand it, it gives both the Government and the regulators a way to regulate in this area and bring things into the regulatory perimeter. It is our understanding that stablecoins will be the first of those digital assets. This is a very fast-moving area; the EU has its MiCA—markets in cryptoassets—regulation, which you will be aware of, which is a very broad framework. I think there is some advantage for the UK in being the second mover here, because there is some concern about some of the things MiCA has closed down. For example, it is not allowing stablecoin wallets to accrue interest. We are watching very carefully in this space, but I understand your concern about consumer protection. I think that is front of mind for our firms, and they want a level playing field as well.
Martin Docherty-Hughes
Q
Emma Reynolds: That could be a concern, yes.
Emma Hardy
Q
David Postings: I am not sure this Bill is the right mechanism for it. We have been working closely with Government and regulators on a fraud strategy for some time, so anything that takes the agenda forward has to be welcomed, because fraud is a huge burden on society and a rising crime, but I am not sure that this Bill is necessarily the right Bill.
Emma Hardy
Q
David Postings: The ability to share data is one of the key things in terms of helping to prevent fraud and, after fraud has taken place, sending money back to the right place. I would need to look at the wording, because that is not in the Bill at the moment.
Emma Hardy
Q
David Postings: Anything that we can do as a country to stem fraud has got to be welcome.
Emma Hardy
Q
David Postings: There is provision to do that already, or at least we have taken steps to do that.
Emma Hardy
Q
David Postings: Yes.
Gareth Davies
Q
David Postings: Yes, it will.
Gareth Davies
Q
David Postings: I do not have a view on that, I am afraid.
Gareth Davies
Q
David Postings: They can change the volatility in the market. They do not necessarily push the price up, but they can change the volatility.
Gareth Davies
Q
Emma Reynolds: I defer to David.
Peter Grant
Q
Emma Reynolds: From what is in the Bill, I do not think that is the Government’s intention. As I understand it, the Bill gives the power to the Treasury to transfer—restate—EU legislation, and we have encouraged the Treasury to think of this as a sequence, because we do not want big regulatory change in one go, as the compliance costs are quite high. We absolutely see that there is an opportunity to tailor EU legislation to our markets, so I do not think it is the case that this legislation would not apply; I think this is going to be done in a phased way.
Peter Grant
Q
Emma Reynolds: That is a matter for the Government. The Bill gives the Government broad legislative powers to amend the legislation that they have transferred, as I understand it.
Peter Grant
Q
David Postings: It is not in the Bill at the moment. We would need to see the wording of what was proposed and the timescale. If you think about your first point, which I did not respond to, the difference is that the regulation will now be through rules rather than in legislation. We have had a fruitful working relationship with the Treasury and the regulators over the past year and a half since Brexit to produce what is in the Bill. Those changes have been well thought through with industry involvement and therefore get the balance right between protection, regulatory stability and the ability to be commercial. I would hope that, as the rules get translated over time, that process would continue.
On the green agenda, it is difficult for me to comment on something that is not in the Bill at the moment. What I would say is that we need to be thoughtful about the transition to net zero, as opposed to just the taxonomy and the drive to get to net zero. There is a danger that, in prescribing that financial institutions have a balance sheet in a particular form by a particular day, you risk not having a transition to net zero, so that whole thing needs to be well thought through. We risk financial exclusion on the back of that for consumers as well. I would urge caution rather than lumping something into the Bill at this late stage.
Peter Grant
Q
David Postings: The banking industry is 100% behind that transition, but the transition is the important point, not just greening the balance sheets of the firms.
Emma Reynolds: May I add to that? There is a huge commitment from financial services, and we also represent related professional services, in playing a part in enabling the transition to net zero. Financial services and financial regulators are an important part of a much broader picture, which is why green finance is actually led by the Department for Business, Energy and Industrial Strategy, not His Majesty’s Treasury. It is about not just the supply of green finance, but the demand for such products. If we have a transition to net zero, it has to be about every sector pursuing a transition. Financial services has a critical role to play, but that has to be done in tandem with the transition in other sectors too.
Sally-Ann Hart
Q
Emma Reynolds: I certainly think there is room for a more commercial mindset in the regulators. This is not just about regulation by the way; it is about operational efficiency. One of the things we have been working on is delays in authorisations for senior managers, which can slow things down. There are other authorisations as well. We are encouraging the regulators to have a more commercial mindset and to be aware of the businesses’ priorities. It is not just about regulation; it is about how efficient they are. If, for example, you want to bring in a senior manager to a bank or other institution in the UK and it takes you 18 months to 2 years, you could be doing that elsewhere, and that puts us at a competitive disadvantage. So, absolutely, we think that there is room for improvement in having a commercial mindset in the regulator.
Sally-Ann Hart
Q
Emma Reynolds: Proportionate regulation and—we have not got into the cost-benefit analysis panels—careful consideration of the benefits of regulation to make sure that the costs and burdens of regulation do not outweigh the benefit.
David Postings: I agree with Emma. To give a couple of examples, the cost-benefit analysis of the consumer duty had costs but no benefits—no financial benefits. The intent in the Bill to ensure that the FCA and FOS are aligned is really important as well, because it is very difficult for a financial services firm to operate in an environment where we are not clear what the rules are when it comes to interpretation down the line. That makes people cautious, which can add to financial exclusion. The point that Emma made about authorisations is also really valid: there are still significant businesses awaiting authorisation post Brexit from large foreign institutions.
Sally-Ann Hart
Q
Emma Reynolds: And our competitiveness. If that can be done more quickly in another jurisdiction, business might well go there to set up or expand.
David Postings: Fundamentally, what we want is a competitive UK. We are only a small island off the mainland of Europe, but we want to generate big tax revenues to support growth in the economy. Anything we can do to help that is vital. Good, strong regulation is a key aspect of that. A nimble, commercially minded set of regulators to set that stronger regulation is vital.
Andrew Griffith
Q
Emma Reynolds: Sure. We represent the financial and related professional services industry, which employs 2.2 million people, and two thirds are outside London, contrary the characterisation that financial services are mainly in the City of London. We are the biggest net exporting industry, and more than 40% of our exports come from outside London.
David Postings: Yes, we produce higher-paid jobs, and there are big concentrations in Glasgow, Belfast, the north-east, the north-west and down on the south coast. It is a thriving industry and one that we need to support and nurture.
Sally-Ann Hart
Q
David Postings: Absolutely it will work. This is something that we have been working on. We kicked this off as an industry 18 months ago. I have worked with the Treasury, the FCA and the consumer groups for the past 18 months on this. The aim is to make sure that cash provision for the most vulnerable—indeed, for all of society—is protected. The Bill will absolutely do that—through cashback without purchase, ATMs that are free for consumers to use, post office counters and shared banking hubs. Twenty-five shared banking hubs have been announced so far, and that number will increase. All that will provide the right level of cash access going forward. The banks will be subject to LINK as a body to decide what goes where, based on detailed local analysis, and then there is an operating company that banks own, which will implement the solution.
Sally-Ann Hart
Q
Emma Reynolds: No. I defer to David. UK Finance provided leadership in this area—that is where the expertise sits.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank the witnesses on behalf of the Committee.
Examination of Witness
Chris Hemsley gave evidence.
The Chair
We will now hear oral evidence from Chris Hemsley, managing director of the Payment Systems Regulator. For this panel we have until 10.55. Could the witness please introduce himself for the record?
Chris Hemsley: I am Chris Hemsley, managing director of the Payment Systems Regulator.
Andrew Griffith
Q
Chris Hemsley: First off, I agree with your premise. The payment systems sit behind our day-to-day lives. They underpin what our businesses can do and our daily experiences as individuals paying and receiving. They genuinely underpin our productivity, economy and society. I absolutely agree.
In terms of the opportunity in the Bill, one of the key things that we will no doubt pick up is that it provides an opportunity to correct a specific problem that we have today. Some of the powers in the original financial services banking reform framework that the PSR was created under were turned off by some European legislation, and that prevents us from acting with that full suite of powers. That is really important for competitiveness, because if we can get the rules in the system right, that allows us to build trust in digital payments, which will support the economy and growth.
The other issue that I would pull out is that there are some quite important definitional clarifications in the Bill that ensure that the payment systems regulatory framework works for cryptopayments—stablecoin. We are now a regulator of the sterling finality system, which is a distributed ledger system. That bit of future-proofing, again, allows us to seize that opportunity of new technologies and new ways of payment and to make sure that they are appropriately regulated.
Tulip Siddiq
Q
Chris Hemsley: I think that the short answer to that is yes, but it is a challenge. We are always seeking to recruit and make sure that we have the right balance of skills in the organisation. We have a range of specialists who cover different technologies and payment systems, so it is not something to be complacent about.
The other observation I would make is that some of the risks and issues—and some of the opportunities—presented by things such as cryptopayment and distributed ledger are familiar problems, but with a different technology behind them. We are worried about our consumers’ money. Is it safe? Are arrangements for getting access to these systems fair and open? Are there competition problems? It is really important—the Bill does this—to make sure that that regulatory framework to tackle those familiar problems is also turned on for these new technologies, and that is the balance we need to strike.
Tulip Siddiq
Q
Chris Hemsley: We need to continue working closely with the two other principal regulators that tackle these issues—the FCA and the Bank of England—as we do today. We do that today with other technologies. We want the full framework to be turned on. With the FCA, we for example ensure that individual payment firms protect people’s money. You are absolutely right; in a world where people might not understand what a particular asset is, and its potential to reduce or substantially change in value, there is a really important role for the FCA in ensuring that firms are dealing with their customers properly. There is then a role for us in ensuring that the systems work, and that the rules are open, transparent and protect consumers, system-wide. The Bank of England ensures there is sufficient security and resilience, so that the systems actually work when we need them to, as we increasingly rely on them.
Martin Docherty-Hughes
Q
I am glad to see that there is some regulation in the Bill, but you used terms such as “future-proofing”. With this technology, we bandy around terms such as “innovation” and “future-proofing”. What does that actually mean, in real financial terms? Frankly, it is not the type of language that I, as a legislator, would like to see used in regulation of a market. It is not just that it is unfamiliar; it does not seem like the correct kind of language or descriptives to use when we can have an impact, predominantly on consumers who might use these commodities and assets digitally. What do you mean by “future-proofing”?
Chris Hemsley: That is a very good challenge. I want to ensure that the full regulatory framework that we have in the UK is turned on and applies properly, so that we can manage consumer protection and competition risks. That is what I mean in terms of that definition. That applies particularly to how payment systems regulation works. We have some relatively broad definitions of what can be covered. The Bill helpfully clarifies that those broad definitions of where regulation can apply are sufficiently broad. The way that the regulation works is that it still requires the Treasury to issue a designation—the Minister issuing a designation of a system—and our statutory duties and checks and balances then kick in. It is shorthand. If I try a slightly more precise framework, you need to ensure that the initial definition is sufficiently broad, so that those subsequent decisions on if and how something should be regulated can apply.
Martin Docherty-Hughes
Q
Chris Hemsley: I agree with what you said. There are some familiar risks, and some new ones, that we need to be alive to. The fact that for the first time we could see the use of mass payment systems that are not linked to fiat is a new issue, and one that we need to manage.
I come back to an earlier point, which may help you to take decisions on the elements around definitions of what can be regulated. There is a series of gateways, almost: before something is regulated, it needs to fall within the definition of the Bill, and the Bill helps with that. There is then a test in the Financial Services (Banking Reform) Act 2013 that turns on the PSR’s powers: something needs to be designated by the Secretary of State for it to be regulated, and then our powers can apply. I want that to work. I want the definitions, the designation and our powers to work in this new context. I can see these new issues, as well as the familiar competition access issues that we have had to deal with in the past.
Emma Hardy
Q
Chris Hemsley: The short answer is no. There is an additional requirement for us to bring forward proposals on the faster payment system, and we have already set them out in anticipation of that. We fully support that. The Bill does something broader. It removes this unintended consequence of European law for all payment systems. We will have the ability to use our full suite of powers, including in respect of fraud prevention, for all the payment systems.
Our powers vary slightly depending on which system we are talking about. We could apply these issues to, say, the cheque system or the BACS system, not just faster payments. We take a different approach on those systems, but the Bill allows you to turn on our full suite of powers to tackle the issues across the full suite of payment systems.
Emma Hardy
Q
Chris Hemsley: I agree with what was said in the conversation you had earlier: it is really important to share data. I am not aware of particular barriers, but if there are any, I would of course support addressing them. The Bill gives us what we need: we need our FSBRA powers to be turned on. That allows us to move from the current approach, through which we have been indirectly tackling fraud, to being able to tackle it directly through the system rules.
Emma Hardy
Q
Chris Hemsley: Indeed. We have work under way to encourage and support that.
Sally-Ann Hart
Q
Chris Hemsley: This is principally a matter for the FCA, so it might be best for me to follow up on it in writing, and potentially with the FCA.
Sally-Ann Hart
That would be good.
Chris Hemsley: The PSR’s powers allow us to make sure that people have fair access to payment systems. The access to a particular payment firm’s services would be something for the FCA. I am happy to take that away and make sure that the Committee has a reply.
Sally-Ann Hart
Q
Chris Hemsley: Again, that is more for the FCA, but I can offer you a general view. It is in everyone’s interests that the same risks and regulations apply to people carrying out payments business, including payment systems and payment firms. That is my general answer, but perhaps I could pick that up in correspondence, given that it falls principally to the FCA.
Sally-Ann Hart
That would be great; thank you. Maybe we can take that up with the FCA.
The Chair
Order. I am afraid that that brings us to the end of the allotted time for this panel. On behalf of the Committee, I thank our witness.
Examination of Witnesses
Charlotte Clark and Karen Northey gave evidence.
The Chair
We will now hear oral evidence from Charlotte Clark CBE and Karen Northey. We have until 11.25 am for this panel. Would the witnesses please introduce themselves for the record?
Charlotte Clark: I am Charlotte Clark, director of regulation at the Association of British Insurers.
Karen Northey: I am Karen Northey, director of corporate affairs at the Investment Association.
Andrew Griffith
Q
Charlotte Clark: Like all the other witnesses, we welcome the Bill. A lot of work has obviously gone into trying to get the right structure. That is really key in terms of how this works for the next generation. I think it was you who said that it had been 23 years since our last Financial Services and Markets Bill, so the legislation needs to work for a very long time.
On the specifics that you talked about, the competitiveness objective is key. Financial services regulation has been made in Europe for the last however many decades. As we onshore it, getting the structure right and making sure that the regulators balance different objectives is really key. We have argued for a primary, rather than secondary, objective around sustainable economic growth, partly because—as today’s debate has probably shown—competitiveness is quite a difficult thing to articulate, whereas for sustainable economic growth, it feels to me a bit easier to say how you are doing, why you are doing it and whether or not you are successful.
Culture change—I cannot remember who mentioned it—is important as regulators take on greater responsibility, particularly around policymaking. That comes to your point about the call-in power. None of us has seen it—I certainly have not seen it; I do not know whether Karen has—but nobody wants to undermine the independence of the regulators. It is incredibly important that they have their independence, particularly in their roles as supervisors and regulators. Political interference in that is not something that benefits the UK economy.
Policymaking, to me, is about trade-offs. If you are trading off economic growth against stability—we have mentioned financial inclusion and net zero—it is about balance. Sometimes, the regulator is not going to be all-knowing, and sometimes it is the role of Government and Parliament to step in and say, “Actually, we have a slightly different opinion.” I don’t think that is about undermining the independence of the regulators, though.
Karen Northey: I will focus on competitiveness and international competitiveness. The Investment Association represents investment managers in the UK who manage £10 trillion-worth of assets on behalf of clients. Of those assets, £4.6 trillion are from overseas investors. The investment management industry in the UK is truly global, and a global success story.
Our industry has two parts: the fund domicile and the activities that go behind the fund, and then the management of those assets—so the investment management side. We are a world leader in investment management, second only to the US, but the US is a very domestic market, whereas London—London and the UK; I must not forget my colleagues, particularly up in Edinburgh—is international. The international competitiveness is absolutely key to our industry.
We support the Bill. We support the secondary objective of international competitiveness; we think it is really important for our industry. Our position as an international global leader is at risk. We are the second largest and the most international, but we cannot be complacent about it. More can definitely be done to support our industry in continuing to be that world leader. That brings investment decisions closer to home. It enables greater opportunities, in terms of products and services for the wider economy, for investors, and for pension funds and so on in the UK.
Andrew Griffith
Q
Charlotte Clark: It is the United States, Bermuda, and Singapore—Europe as well, but particularly for reinsurance.
Karen Northey: For investment management, I mentioned before that the US is the largest investment management centre. We are seeing growth in other centres, close to home in Europe, but there is also a very significant China and Asia investment management centre. On fund domicile, which is more the back office where the funds are registered, Ireland and Luxembourg are obviously the key places where funds are often established.
Tulip Siddiq
Q
Charlotte Clark: I do not think that there is anything in the Bill specifically around net zero. I understand the debate about whether there should be an additional objective for the regulators around it. Obviously, net zero is incredibly important for the insurance sector. We bear the cost of climate events. The incentive on us to think about and support the transition, particularly financially, is very apparent.
I think our regulators do a pretty good job when it comes to net zero. If you think about the things they are doing, such as the stress test, the establishment of the climate financial risk forum and the work they are doing on disclosure, they are pretty much ahead of most other regulatory organisations on net zero. I guess one of the questions is: what would you want to do differently? This comes back to whether they have an objective. One of the concerns about them having an objective is whether it would be their responsibility to direct investment. Again, that comes back to what the role of the regulators in this is. In some ways, put bluntly, I think it is the Government’s responsibility to deliver net zero. We all have accountability in that, but I would not necessarily say that giving an objective to the regulator should change what they are currently doing, so I would question why you would do it.
Tulip Siddiq
Q
Karen Northey: Again, I would highlight that the UK is a centre for green finance and has done very well in it. It is a big part of what our members do. For risk management, investment managers have to take a long-term view, and that long-term view, by its nature, has to take into account climate change. Additionally, they play a huge role in directing finance towards transition, so there is a dual role for our industry.
In terms of a competitive and growth objective for our regulators, I agree with Charlotte that the regulators are generally doing a very good job. One of the key things in green finance is international standards and compatibility between them. There is a cross-border element to all forms of capital movement and investment, and alignment with international standards, so taking into account what is happening elsewhere is a key part of a regulator’s activity, particularly in green finance.
Craig Tracey
Q
Karen Northey: On your question of whether the secondary objective is enough to change culture, I think an objective is necessary but I do not think it is sufficient—so it is necessary but insufficient. Culture absolutely has to follow. What we do not want is for it to be a check in the box when you are making a new rule for the handbook—“Yes, it will contribute to this.”
There does have to be an overall culture change, but to do that you do need the objective. I think that a lot of the ideas put forward this morning by TheCityUK around, for example, disclosure and transparency reporting on exactly how the objective is being met in each decision, will be key to that. I think we will continue to work with our regulators on that, as we currently do, but we would definitely encourage more transparency and disclosure around how individual measures are meeting that secondary objective.
Craig Tracey
Q
Karen Northey: Parliament plays an important role. If I think of the various roles that, for example, the FCA plays as a rule-maker or a law-maker, as well as in supervision and enforcement, we are specifically talking about the rule-making function of regulators, which will be significantly increased. European directives are created through a process of Parliament, as well as through the Commission and Council, so if the regulators are taking on those responsibilities, it is important that Parliament then also plays a significant role in holding them to account. These are quite significant powers coming back from Europe and Parliament has a legitimate and important role that to play.
One important thing, from our perspective, is that that review and that holding to account of the regulators when they are being reviewed must be sufficiently well resourced and have access to sufficient expertise. Certainly our industry—I know this is true across financial services more generally—is willing and available to provide and help with that expertise, as appropriate. I understand that there are balances that need to be made, but ensuring that level of expertise is important, because there is a lot of this regulation and it is also very technical and across lots of different areas. Parliament absolutely has an important role to play and will need the resources and expertise to do that.
Charlotte Clark: My response is pretty similar. Part of the reason for arguing for the primary objective is that a lot of our experience is coloured or shaped by the debate around Solvency II. The Government proposed three objectives for the review of Solvency II. One was around a vibrant industry, the second was around policyholder protections and the third was around investment—getting investment in infrastructure, net zero and those sorts of things.
I would say that the regulator is still very focused on policy holder protection. While no one would want to undermine that—financial stability is the absolute bedrock of everything—it is a necessary but insufficient condition for everything else that needs to happen with regard to investment and growth. That is part of the reason why we have argued for the importance of a primary objective: that culture shift is needed. Could it be done through a secondary objective? I hope so. It is about whether there is the right reporting and the right accountability and whether the challenge is there.
These are very complicated issues. This is the joy of discussing Solvency II—I apologise if I have inflicted that on any of you. These are very complicated issues and it is very difficult to get that wider challenge. Those people who embed themselves in this day to day can slightly overrule things, rather than find a balance for the way these things are implemented.
Craig Tracey
Q
Karen Northey: I think that is a barrier. Previous conversations have covered authorisations of individuals and firms. If there is something unique in our sector, it is that our products also need to be authorised—the funds themselves need to be authorised. I mentioned the examples of Ireland and Luxemburg as key competitors in fund domicile: in Ireland it is possible to have approval for a fund within 24 hours. The FCA target is a month, but that does not always happen. There are definitely instances where in-depth review is important—we want to make sure that funds are meeting obligations—but sometimes they are very similar to previously authorised funds, run by managers who have a long history and so on. Definitely when it comes to fund domiciles it is something that is considered as important.
I know that the Bill focuses a lot on bringing EU legislation back, which is absolutely essential in terms of targeting certain areas so they are more fit for purpose for the UK market, but there are other areas of reform that are more homegrown that have led to challenges for our members in terms of our international competitiveness—the consumer duty was mentioned, for example, and there is the financial services compensation scheme and a number of others. It is not the only factor in making a decision, but it is definitely a factor.
Charlotte Clark: Similarly, I cannot recall a new insurance company being set up in this country—certainly not in the last 10 or 15 years. They are being set up in Gibraltar, Bermuda and other places where there is equivalent regulation. There is something about how we attract it, do it quicker and ensure that people feel that this is a good place to do business.
I will make a broader point with regard to investment and slightly contradict something I said previously about net zero. One of the things we talk about is that it is harder to invest in a wind farm than it is in coalmines. Those sorts of regulatory barriers need to be changed so that we are investing in the right things for the UK economy, particularly when it comes to net zero.
Emma Hardy
Q
Karen Northey: Financial inclusion is probably not relevant to our industry, in terms of access to bank accounts, but financial wellbeing is critical to our industry, in terms of how money is invested for the long term—particularly later in life—for individual investors. Three quarters of households use an investment manager through their pensions, for example, so it is about making sure they get the most out of their investments.
We have suggested that you address as quickly as possible the advice-guidance boundary. That might sound quite technical, but there are a large number of individuals who simply do not get financial advice because of the way the regulations work at the moment. We are encouraged to hear that the FCA fairly recently announced a comprehensive review of the advice-guidance boundary, but there are definitely things that can and should be done around enabling more people to get help, whether that be more bespoke guidance—there is lots of technology and innovation that will help without giving regulated advice, which absolutely should be the bedrock of complicated financial planning—or simplified advice. In terms of financial wellbeing, that is something we would like to see.
Emma Hardy
Q
Karen Northey: On financial inclusion, it is not something that we thought was necessary, in terms of the powers that the regulators have and the role that regulators have versus the wider Government on financial inclusion.
Charlotte Clark: Our position is similar. Nobody doubts the importance of financial inclusion. Particularly at the moment when people are making very challenging decisions, things like savings and insurance can feel like a luxury. The regulator and the FCA in particular have given great importance to things like consumer duty, vulnerable customers—not a title that I particularly like because it is basically almost all of us at some point in our lives—and ensuring services are available to people in difficult and challenging circumstances. The review of advice and guidance is really important. For us, the point of retirement is key. At the moment, less than 10% of people are getting advice at that point.
Emma Hardy
Q
Charlotte Clark: I think the Bill allows for a review of MiFID—this is horribly technical, isn’t it? There is a lot of regulatory change going on at the moment and we need to get the definitions right. Whether it is simplified advice, broader guidance or just more help for people, all those things need to be thought through. I am not sure that will be done in the time and space in which this Bill will be taken forward, but it certainly gives the FCA and the Treasury the powers to make the changes that could be helpful for people.
Emma Hardy
Is there anything you want to add, Karen?
Karen Northey: No, I think I covered it earlier.
Stephen Hammond
Q
Charlotte Clark: That language is really important. How do we get things like transparency and challenge into the system? I am not sure that writing it into legislation necessarily leads directly to it, but there is something about getting the right mechanisms, the right debate and the right challenge between Parliament and the regulators, without undermining their independence. This is such a big change. I do not think any of us could be completely certain that we have got it right, but it is about making sure that we have got the right balance and the right mechanisms to hold people to account.
Stephen Hammond
Q
Charlotte Clark: A good example is the cost-benefit analysis panel. At the moment, the regulators appoint people to that panel. That could be fine; it might not be. You might want a bit more independence in there and a bit more scrutiny. You might want to think about what those processes are. It is those sorts of areas where they could imbue cultural change. Dave Postings had the example of the consumer duty, whereby they told us what the cost was but not the benefits. We all have our favourite examples of regulatory change where we think, “You haven’t quite made the argument for this; you haven’t quite shown that this is going to be beneficial.” Making sure that changes is one of the things we would want to see.
Karen Northey: I will pick up on the second part of your question, on evolution versus revolution. It comes back to the fact that there is a significant amount of legislation to be reviewed. This is kicking off and enabling a significant review. Our members believe there are a lot of things in European legislation that work, and we do not want everything to go.
I harp back to the figures I mentioned before: £4.6 trillion out of £10 trillion is overseas assets. That relies very heavily on a concept called delegation, which allows UK asset managers to manage European funds. From our point of view, it is fundamental that we operate in a global regulatory framework in a way that does not put at risk what is a significant success story and a significant source of revenue and growth for our country.
The reviews that the Bill enables should be done in a targeted way, focused on those measures that will make the most amount of difference in terms of allowing the UK industry to work better. But we have always said that we are not looking for regulation to be torn up and suddenly having no regulation. This is about making modifications that will make a significant difference to our industry here in the UK.
Stephen Hammond
Q
Karen Northey: Absolutely, and I think the process that comes has to be done in a way that is sequenced in the right way to allow proper consultation and proper input.
Peter Grant
Q
Charlotte Clark: Why would you set up in Gibraltar and sell into the UK market? There is not a big market in Gibraltar.
Peter Grant
There could be a number of reasons why UK business owners choose to set up companies offshore, including in Gibraltar, and they are not always reasons that have the best interests of consumers at heart.
Charlotte Clark: I think that is fair. I am certainly not casting aspersions on the Gibraltar regime, because they should have the same regime as the UK—equivalence with Gibraltar was in the last financial services Bill. The question would be: why would they do that if we haven’t got the right regulatory environment for companies to set up here and to have the oversight of our regulators?
Bermuda is probably a good example. If you speak to the regulators there about how they think about it, how they work with businesses and what they need to do, they have a slightly different culture. I do not think that is to the disadvantage of consumers. The Bermuda market is very similar to the London market in insurance. I do not think it is to the detriment of consumers; it is to the advantage of business, and I do not think that those two things are necessarily against one another.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions and the end of this morning’s sitting. I thank our witnesses on behalf of the Committee. The Committee will meet again at 2 pm this afternoon here in the Boothroyd Room to continue to take oral evidence.
Financial Services and Markets Bill (Second sitting)
Wednesday 19th October 2022
(2 years, 1 month ago)
Public Bill CommitteesRead Full debate Financial Services and Markets Act 2023 View all Financial Services and Markets Act 2023 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 19 October 2022 - (19 Oct 2022)
The Chair
We are now sitting in public and the proceedings are being broadcast. We will now hear oral evidence from Sir Jon Cunliffe, deputy governor of the Bank of England. For this panel, we have until 2.25 pm. Could the witness please introduce themselves for the record?
Sir Jon Cunliffe: I am Jon Cunliffe. I am the deputy governor for financial stability at the Bank of England.
The Financial Secretary to the Treasury (Andrew Griffith)
Q
I do not reach a conclusion on those matters myself, but I thought it would be helpful if we could start with your evaluation of the United Kingdom’s competitiveness in financial regulation, which is one of the core purposes of the Bill, and how well you think the Bill achieves that objective of improving our competitiveness. The other thing a number of our previous witnesses talked about was which markets in the world they consider to be our competitor set.
Sir Jon Cunliffe: I thank the Committee for allowing us to give some evidence on the Bill. This matters hugely to us. I will say at the outset—this goes to your questions, Financial Secretary—that the Bill is hugely important and it is hugely important for a number of reasons. This is relevant to the competitiveness question. The system we have at the moment is basically that we have onshored the European Union system. That system—I worked in it for many years in different jobs and have been involved in much of the legislation—is designed for, now, 27 member states. It needs to ensure the single market and, although the national competent authorities do the supervision, there is always concern in the single market that you will get differences among them. A huge amount of what in other jurisdictions’ best practice is done in regulators’ rules is hardwired in primary law, and you can see that if you look at the onshored law. That system is justified by the needs of the single market and the need to bring all these jurisdictions together. As a single jurisdiction, as the UK is now, we will have much more flexibility, and the ability to act nimbly and design regulation for our particular needs, than we had in the European Union.
I can give you some examples of that. For example, my colleague Sam Woods at the PRA has put forward ideas for a strong and simple prudential regulation framework for banking. We could not do that under the European Union because we were all locked in a maximum harmonisation phase. In the parts of the Bill that are more relevant to me, around payment systems, there is a schedule that deals with digital settlement assets, more generally known as stablecoins, where we can now develop a regulatory framework that is nimble and flexible on the financial market infrastructure side, where we will see huge technological changes brought about by some of the technology we now see around encryption and tokenisation. Again, we are developing a sandbox with the FCA and the Treasury, but we can bring those much more nimbly into rule. This is a much more flexible and adaptable system, which will help in competitiveness.
It will also help because many of the requirements and the processes in the legislation we have were designed for 27 or 28 countries, and not for one. We report on things—I was there when they were put into the legislation—that were important to other countries but not to us, so there is an on-cost in process. Things that are important to us are not always fully reflected, because all European legislation is a compromise. That flexibility and nimbleness will take time, because the European acquis is very large, but it is a huge advantage for us in designing the regulatory framework that we need.
But—and that is a very important “but”. I might not agree with all the people that have given evidence, and I know the Financial Secretary would probably not expect me to either, but this needs to be underpinned by a strong, credible, regulatory system, and the independence of regulators is a key part of that. It is best international practice, but I think it is particularly important for the UK in two respects.
You can measure our financial system in different ways. The last IMF measure was £23 trillion—that is about 10 times GDP. When that system goes wrong, the cost to the nation is huge. That is not theoretical; we saw that in the financial crisis over 10 years ago. The recovery from the financial crisis, in terms of growth, was slower than our recovery from the great depression in the 1920s. The objective of sustainable growth in the medium and long term is entirely right, but strong, credible regulation is a necessity for sustainable medium and long-term growth. In the short term, there might be trade-offs, but in the long term, we can see what happens to growth if you get a financial sector of the size of ours wrong.
I might touch on the question of a call-in power, because I know you asked my colleague, Vicky Saporta, about that this morning. We have seen the power or the proposed amendment the Government intend to bring forward. Of course, we are subject to Parliament and the framework that Parliament sets for us, and we will work within that framework. However, for the two reasons I gave, I think a power to call in and rewrite veto rules that the regulator had made would, frankly, give us—me, anyway—serious concern given the history I have seen over 30 years in the UK financial sector.
Actually, it goes to competitiveness. We are—I gave you my £23 trillion number—probably the largest international financial centre in the world and we are one of the largest exporters of financial services. Regulators and regulatory authorities of other jurisdictions need assurance and need to be comfortable; they need assurance that they will not import risk from the UK or by their firms using UK financial services. That credibility of the institutional framework is very important to the competitiveness of London as a financial centre.
Of course, it is also important to the firms that locate here. They want to ensure that if they use our infrastructure—I am responsible for clearing houses and settlement systems—and if their banks locate here or trade with our banks cross-border on financial services, then they can be assured of the robustness of the underlying system.
I beg your indulgence, Mr Sharma, as I have one last point. All of that—the nimbleness, flexibility and, on the other side, robustness of the framework—needs to be fully, publicly accountable and accountable to Parliament. We welcome what is in the Bill in this area.
To the question of where our competitors are, I think the US is a large competitor in wholesale financial services. We have competitors in Asia as well, but that is more niche. A lot of particular products, asset management and the like, are located in Ireland and Luxembourg and are used by the UK.
Financial services are not linear. A service will very often be a bundling of products that come from different jurisdictions. That is very important for competition. People need to be assured that they will not import risks by dealing with the UK, and that when financial services are put together with elements from different jurisdictions or when we are competing, we actually are in line with international standards.
Andrew Griffith
I thank the deputy governor for his comprehensive comments.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Q
Sir Jon Cunliffe: I have not seen the proposed amendment. I have only seen the Financial Secretary’s comments to the Treasury Committee and comments from the previous Economic Secretary at the Treasury, so I would need to look to see. I would say that the Bill as drafted gives the regulator primary and secondary objectives to make the difficult decisions that some of the witnesses this morning were complaining about. It requires us to balance different things before we come to a decision, but underlying that is the primary objective of financial stability and the safety of the system.
I do not know how often a call-in power or an intervention power would be used, and I do not know what frameworks would be around it. Of course, one cannot always assume that the intention when introduced is actually what happens five or 10 years down the line with different Governments. It is something that gives Ministers the ability to take a second judgment on the judgment the regulator has made in line with everything in the “have regards”—the secondary objective—so it would, yes, affect the perception of the independence of the regulatory part of the Bank of England.
Tulip Siddiq
Q
“Anything that would weaken the independence of regulators would undermine the aims of the reforms”
implemented by the Bill. Do you think he was referring to the proposed intervention powers?
Sir Jon Cunliffe: There has been a lot of discussion. There was discussion in the consultation about a number of aspects that might affect either the independence or balance of the regulators. I know there was a discussion on the competitiveness objective, and we think it has been drafted in a very sensible way. That came up in the consultation. At that point there was also talk of an intervention power, so it would apply to that as well, I guess.
Craig Tracey (North Warwickshire) (Con)
Q
Sir Jon Cunliffe: I should say at the outset that our responsibility is the prudential regulation. The FCA deals with a different market. On the prudential and infrastructure side that I deal with, there is not a huge amount of commerce with Singapore. Would I accept that the competitiveness of our financial sector relative to Singapore’s in the areas that I deal with has been damaged? No, I do not think I would. I do not know of any examples. I think the firms that you quoted were in the FCA area. The competitiveness of the financial system depends on many things. It depends on our openness to migration. One thing you hear most from international banks and the like is the overriding importance of getting the best talent. That is a huge advantage for the UK, which has been called into a little doubt recently, but I think is now being re-established.
The taxation regime plays a role, and then there are lots of things about the attractiveness of the location for people to live in. On making a comparison between two financial centres on how many firms have started one and how many firms have started another, and assuming that all of that is to do with the way regulation is designed, I would be careful about making comparisons on that basis. There is a lot more in it.
I will bring it back to my area if it helps. When I look at the technological changes that are coming, and when I look at the European Union, which is where we were, and look at areas where I know we have not had the flexibility to design the regulation that we would have wanted to design—there are pros and cons to being in the European Union, and we can argue about those—you have to be within a single market where the rules are pretty much set for everybody. On the rulebook as we have it now and instances where people have said, “We don’t like that part of the rulebook. We will set up somewhere else”, I do not have any instances where that has happened, but it probably has.
As these powers, which are now coming back to the UK and I think rightly coming into the regulator’s rules, are exercised, where does the regulator put the balance? What is the scrutiny of the regulator? Is there accountability? In the end, those decisions, if I can encapsulate it, lie in the way the Bill has been set up with the primary and secondary “have regards”, and those arrangements should ensure that we are competitive in future.
Craig Tracey
Q
Sir Jon Cunliffe: With the greatest of respect, I do not think I need my culture shifting, within the regulatory framework that we have at the moment. I have made a series of speeches on new technology and the benefits that new technology can bring and the importance of that, so I would not regard myself as in that position. Others might have a different view and are obviously entitled to it, but I certainly would not accept that, if I can make that point clear. You can look at the published statements of the Bank of England and the speeches we have made.
We welcome schedule 6 of the Bill because it will give us the powers to put in place a regulatory framework for stablecoin and digital assets used as payments. I would argue, because I hear this from lots of the fintech community in London, that they want a regulatory framework. They do not want a system where the public think, “This is unsafe. What happened to Terra and LUNA could happen to me. I could be scammed. I am betting in an unfair casino.” They actually want a regulatory system. They want it to be designed to recognise their technology.
There will always be tension between where we put the risk cursor and where the private sector would like it to be put. That is a discussion we have to have. The importance of this Bill is that it will give us the powers to get on and do it. I do not think I would accept the criticism that our culture is anti-innovation and inflexible. We need the powers and the tools to do that job and that this Bill will give us them.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
Q
“In baseball, it’s three strikes and you’re out. In cricket, it’s only the equivalent of one. For systemic payment systems, one is too many. If that means, as it must, very rigorous oversight and rules for private stablecoins, what would then differentiate them from CBDCs?”
First, could you answer the former Governor’s question—what then does differentiate them from a central bank’s digital currency? Secondly, I am glad to hear you rightly say that the industry wants good regulation; is this regulation rigorous enough to enable that to happen?
Sir Jon Cunliffe: I do not normally contradict my ex-colleague and boss, Mark Carney, but I would say a number of things. On the landscape, let us be clear about what we are talking about: we are not just talking about new forms of payment systems; we are talking about new forms of money. Most of us do not realise it, but when we use our credit card, phone or cheques—if we use cheques—we are exchanging private money, which is our deposits at commercial banks. What these stablecoin proponents propose to do is create a new settlement asset—that is, a new form of money—to be used in transactions. I think that is why Mark said that when a payment system—the money going through it and the mechanism for transferring it—breaks down, then one of the basically essential services in the economy, like water or electricity, breaks down and transactions cannot happen. So you do not get one strike: if the payment system goes down, people cannot transact at scale. This is fundamental infrastructure, if I can put it that way.
The money that travels through these payment systems is also fundamental to society. It needs to be robust and safe, and history has lots of examples of what happens when people lose confidence in the safety of the money they are holding and transacting. That is why these things are crucially important. However, 95% of the money that we use in our economy is not public money from the Bank of England but private money from commercial banks, and I do not see, a priori, a reason why a new form of private money could not emerge using different technology in the way that stablecoins have proposed. What I will say, and the financial policy committee at the Bank has said this very clearly, is that the money that they use and the transaction machinery that they use must be as robust as the money we are using from commercial banks or the Bank of England. The public should not need to think, “Which money am I using?” It should all be one money of equivalent value.
I think there is a world in which you have a CBDC, stablecoins, commercial bank money and Bank of England cash, which we will produce as long as anybody wants it, and those things are interchangeable and people use them interchangeably—we use the moneys of different banks interchangeably now—but the regulatory system has to be strong and make it very clear that if what you are offering is a better service, an innovation, that is fine, but if it works because it operates to a lower standard, that is not fine.
Martin Docherty-Hughes
Q
Sir Jon Cunliffe: No, no, it is fine. We are friends.
Martin Docherty-Hughes
He did say this, which I take in terms of stablecoin as well:
“Ultimately, crypto either has such extrinsic value without a use case, or has a use case as an NFT that perfects ownership (which is niche by definition in that it is non-fungible).”
His critique is that it becomes niche.
The Chair
Order. I am afraid that brings us to the end of the time allocated for the Committee to ask questions of this witness. On behalf of the Committee, I thank our witness.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Q
Sir Jon Cunliffe: I would be very happy to write something on—
Emma Hardy
Crypto.
Sir Jon Cunliffe: We will bring out a regulatory framework for stablecoin, but I am very happy to write on how we see it, if that helps.
The Chair
We will now hear oral evidence from Paddy Greene, head of money policy at Which?. For this panel, we have until 2.45 pm. Will the witness please introduce himself for the record?
Paddy Greene: Good afternoon. I am Paddy Greene, the head of money policy at Which?. I welcome the opportunity to speak today. What is probably pertinent is that we have had some long-standing campaigns on access to cash and authorised push payment fraud.
Andrew Griffith
Q
Paddy Greene: I do accept there is a balance to be struck, so thank you very much. The simple thing is that we need to make sure, when we are talking about the financial services sector and consumer protection, that we have the appropriate consumer protection baked in, so that we have a basic level that means all consumers can participate with confidence and they know that whatever they are transacting in they are looked after and they have a form of redress. Then, once we acknowledge that we have that basic consumer protection, we obviously have some judgment to make on how far the other regulations go. I must add that when we are talking about consumer protections we mean that a protected consumer is confident, has trust in markets and will participate well, and that can lead to a competitive market, an innovative market and a market that can help with growth.
Andrew Griffith
Q
Paddy Greene: The trade-off between protections and consumer credit?
Andrew Griffith
Between putting in place—I am not making a point; I am just trying to open this up for the Committee—good, valuable seatbelts and protections versus over-protecting consumers to the degree that large numbers of participants exit the market and then consumers are left with door-to-door, unregulated providers of credit.
Paddy Greene: Affordable credit is absolutely essential for consumers, but we need to make sure that, first of all, access to credit is regulated. We do have a particular form of credit that people are accessing now with buy now, pay later, which is not regulated at all, but consumers presume that it is. There are some basic protections we need to build in. One is to ensure that the parts of credit that people access are regulated themselves and that it is clear that consumers understand what is regulated and what is not. Then there is some basic information, such as key terms and conditions.
I am aware that some of the details in the Consumer Credit Act 1974, which is exceptionally old, are onerous, and there will be a chance to review that—I think later this year. It is about making sure we have efficient information presented to consumers. There is a balance there, but there is key information that we must provide them and there are key protections that must be baked in.
Tulip Siddiq
Q
Paddy Greene: Yes, it is a cause for concern. When we are talking about consumers, for the objective in the Bill on access to cash to be met, consumers must have free access to cash. Without that, I think the objective may be undermined. It is the case that we have paid-for provision—it is in theory available now—but it does not serve the market. We must ensure there is free access to cash. A huge raft of people rely on cash. It is massive numbers, but it is also the case that they tend to be vulnerable and on lower incomes. If it is the case that it is not free, when somebody goes to take out £10, they are paying £2 to get it. That is just an example, but that doesn’t seem right. The fact is, we need to have a minimum, base level of free access to cash. We are delighted that the provisions have been brought forward and that we will have this in legislation, but for it to work effectively, it has to be free access.
Peter Grant (Glenrothes) (SNP)
Q
Paddy Greene: I cannot speak for small and medium-sized enterprises—I am here to represent consumers—but fundamentally I do think that the regulatory framework in this country provides confidence. I think it has been robust, relatively speaking, over the years. If we compare it to some other international sectors, I think it is a framework that can provide people with confidence. We would be remiss to weaken that in any way.
Peter Grant
Q
Paddy Greene: We have some concerns about the current wording around competitiveness. I think we need to be mindful of that. I want to get across that whatever changes are brought in, the primary objectives of the FCA must not be inadvertently undermined. The FCA has a challenging time to balance those objectives at the moment. We would seek amendments that ensure that, from the consumer perspective, if we are going to see changes brought in, in no way shape or form do they undermine the consumer protections that are in place.
On the argument for competitiveness for consumer protection, I would add, similar to my earlier remarks, that a confident, well-protected consumer will lead to a competitive environment. It will lead to innovation and confident consumers interacting in that market.
Peter Grant
Q
I have had a number of representations, as I think other members of the Committee have, from individuals or groups of people who have been victims of financial services scams on a colossal scale. One of their common comments is that they do not think it is justifiable for the regulators to have such a strong degree of immunity from civil liability, even in cases where it is clear that the regulator has failed and that that failure has contributed to members of the public losing what for them are significant amounts of money. Do you have a view as to whether it is time to revisit that very broad immunity that so many of the regulators have?
Paddy Greene: I am struggling to hear your questions.
Peter Grant
I am sorry. I will try to speak into the microphone, so forgive me for not looking at you. Do you have a view on the numerous representations we have had from victims of financial scams who think it is time to revisit the very broad immunity from civil liability that the regulators have?
Paddy Greene: I will talk specifically to parts of the Bill. This is essential, but I am thankful for the provisions that have been brought forward to introduce a mandatory requirement for people who have been the victims of push payment scams to get their money back. In terms of a first step, that is crucial. On changing the regulatory framework, that is a first step and we welcome it.
Peter Grant
Q
Paddy Greene: Yes, I believe there is. It is right that the Bill starts with faster payments—I think 87% of APP scams are run through faster payments. We do not want to delay action. It has taken too long: it has been six years since our super complaint to get to this point, so we must not slow that down. The revisions—the two-month and the six-month provision in the Bill—are ones that we absolutely endorse. As I said, we do not want to slow that down.
We need to make sure, though, that there is an obligation for further action—for example, to look at CHAPS payments. UK Finance figures show that 79 million on CHAPS and on-us payments are already there. We know that scammers and fraudsters are very good at adapting to change, so they will move. I know there have been some debates about what the Bill does or could allow, but we need to make sure there is an obligation so that we know what will happen next. Just because there is provision for the regulator possibly to act in the future, that does not mean the regulator will—there is a lot of pressure on regulatory time and resources—so we would really like to see some clarity on what happens after the changes to faster payments are made. As I said, this is the opportunity to look at the future. We know that change is happening, so we should set out a timeframe for what happens next.
Sally-Ann Hart (Hastings and Rye) (Con)
Q
Paddy Greene: I think we need community-based solutions. The fact is that it will not be one-size-fits-all. We need to recognise that communities have different challenges. When we look at the voluntary solution that the industry has put in place, it accepts that, first, we need not only a geographical spread but a community access point. We need the ability for communities to request a review of access in their areas.
Secondly, we need a raft of delivery channels. That again gets to the point of what is fit for purpose. An ATM might well be suitable in one town, but it might not be suitable for another town for a variety of reasons, be that geographical or the demographics of that part of that society. I do not think it is one-size-fits-all. It is very important that we get the policy statement from the Treasury soon, so that we and you can scrutinise properly what the close details will be, but it should be a basic geographical spread, with the option to interrogate further those who are not captured by the geographical spread and to ensure that we do not inadvertently leave people behind.
Sally-Ann Hart
Q
Paddy Greene: We need to acknowledge that if, let’s say, you came down to a certain kilometre base that might sound reasonable in broad terms, it would under-serve some communities, so we need to be alive to that.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Q
Paddy Greene: I think we need to be specific about the need for consumers to have free access to cash. I have concerns that the Bill could be interpreted in a way that undermines those objectives. We absolutely welcome the provision of cash legislation and I am very happy to see it here, but this is our opportunity to get it right. Consumers need confidence that they will have free access.
Emma Hardy
Q
Paddy Greene: Absolutely. We need to see it and we need to see it very quickly. We are in the situation where a lot of people use such buy now, pay later. I acknowledge that a lot of people use it safely, but a growing number of people are struggling with repayments. It gets to the point where people presume that it is regulated. It is an unfortunate reality that lots of consumers do not really differentiate between types of financial products when it comes to the payments and credits that they use, but we need to have buy now, pay later regulated and we need to have it regulated very quickly.
Tulip Siddiq
Q
Paddy Greene: Yes. Similar to the comments that were made before, it is right to start with faster payments. We need to move to a model where we are absolutely confident—I heard the tail end of the previous evidence about different payment mechanisms and those that are emerging. We must have consumer protection baked in. We want consumers to have confidence and we know people are going to use such systems but, as we have said previously, they do not necessarily understand what is backed and the type of payment mechanism that is used.
In terms of what we want to see next, we are delighted with faster payments, but £79 million is already lost on CHAPS, on-us items and international payments. First, we need to make sure that the PSR and the Bank are talking properly about CHAPS, because when we are talking about CHAPS, we are talking about house purchases. For the people who are scammed during such a payment, there is a huge detriment, not financially but emotionally, and we know that fraudsters will adapt.
Our next steps, after we have got faster payments, are CHAPS and on-us, and we need to look at international payments. We need to make sure the regulator is looking at all the other designated payments and those that will come down the line, because we are seeing innovation, in order to make sure that the appropriate consumer protections are built in from the very start.
The Chair
If there are no further questions from Members, I thank the witness for his evidence and we will move on to the next panel.
Paddy Greene: Thank you very much.
Examination of Witnesses
Natalie Ceeney and Martin Coppack gave evidence.
The Chair
We will now hear oral evidence from Natalie Ceeney, chair of the Cash Action Group, and Martin Coppack, director of Fair by Design. We have until 3.10 pm for this panel. Could the witnesses please introduce themselves for the record?
Natalie Ceeney: I am Natalie Ceeney. I authored the independent access to cash review four years ago. I now chair the Cash Action Group, which is leading the industry’s work to provide a voluntary solution, prior to legislation, for providing access to cash.
Martin Coppack: I am Martin Coppack. I am the director of Fair by Design at the Barrow Cadbury Trust. We exist to eliminate the poverty premium—that is, the extra costs that poorer people pay for essential services. I am also a commissioner on the Financial Inclusion Commission. Previously, I was a regulator, responsible for setting up the FCA’s approach to consumer vulnerability and its engagement with third sector organisations.
Andrew Griffith
Q
Natalie Ceeney: We very much modelled the voluntary scheme that we set up as if the Bill, as currently drafted, were implemented. The model starts with a community need base. The premise is that all banks will have a responsibility to serve their business and retail customers, and if they are not doing it through their own branches, they have to do it through another means.
The mechanism we set up is that anyone—any MP, any member of the public—can request that their community’s needs are reviewed. That is done independently by LINK. The form is very simple, free to fill out and on LINK’s website. LINK is already getting applications. Equally, every time a branch or an ATM is closed, LINK will review the needs of that community. If those needs are not being met, it will consider a new solution. Since 1 January, that has already led to 25 new hubs being announced and 13 communities where we are going to explore pilot services, including deposit services. LINK has also set up a significant number of ATMs; I do not have that number at my fingertips.
Andrew Griffith
Q
Natalie Ceeney: To be honest, we need both. There is a real competitive challenge for any bank that wants to go beyond what is necessary, because if it does that, it could be accused by its shareholders of wasting their money, unless all its competitors do the same. To be fair, it is the threat of legislation that has made everyone say, “Why don’t we work together?”. We do need this legislation for the industry scheme to continue in a viable way, but I am pleased that the industry has stepped up in advance of legislation.
We have worked hard not just with banks, but with consumer and small business groups, so the scheme we have designed truly has the input of everybody. We have run pilots for the last two years in communities to test that our models work, with really high satisfaction rates. We need both, but I think the scheme we have designed means that when the legislation is passed, we are ready to go; there will not be a gap.
Andrew Griffith
Thank you. I think you may get an invitation to some parts of the country.
Tulip Siddiq
Q
Natalie Ceeney: That is a very good question, and I am conscious that every time this issue is debated in Parliament or, frankly, every time I meet a community, the debate goes very quickly from cash to banking. It all merges. The reason is we are talking about the same population. If somebody needs face-to-face support with their money, which might be about getting money out, paying money in, a standing order or the fact that a payment they expected has not arrived, it is the same demographic group. We have recognised that in the voluntary scheme. When we set up a banking hub, it does not just have a counter where you deposit cash and get cash. There is also a private space where the banks provide a community banker to do basic banking services. As far as the legislation is concerned, the voluntary scheme we set up will cover that need on a voluntary basis.
There is one challenge that you might want to include in the legislation. I am going to stay neutral because of my members. The consumer groups and small business associations would say it should be included and the banks would say it should not, but if you do want to go there, defining what you mean by face-to-face banking services and particularly essential services is really important. I do not think anyone would expect you to offer wealth management or buy-to-let mortgage advice on every high street, but helping someone when they are stuck because a payment has not arrived or they have got locked out of their account feels different. Keeping that definition tight is important.
There is also a question about whether the FCA has the powers that it needs already. Those are the factors I would consider.
Tulip Siddiq
Q
Martin Coppack: Absolutely not. I have worked in this sector for 20 years and we have the biggest opportunity right now to make a systemic change to how people who are excluded are addressed by both the regulator and the Government, and we need to take it. Recently I provided evidence to the Treasury Committee, which supported our call for a “must have regard to financial inclusion” for the FCA—importantly, alongside a requirement to publish once a year the state of financial inclusion, what it can do, what it cannot do, and who else can act. That is so important. If I could just give a little more context about why that is so important, I would appreciate it.
Thinking about where we are now, Governments of all different colours over the years have asked people to take responsibility for their own financial affairs—be a good citizen and look to the market, whether that is saving for a rainy day, saving for retirement, or protection products for insurance—but what happens if the market does not want you? What if the market says, “You are a higher risk and more costly to serve, so we are either going to make our products more expensive for you or we will just exclude you.”? I think everybody can recognise that situation.
With competition-driven markets, we can all agree that firms will naturally design products that are profitable. That is okay if it is not an essential service, but if it involves basic financial products and services that everybody needs, some intervention needs to happen. Over the last 20 years or so, we have been asking amoral markets to make moral decisions about who gets what product at what price and who gets excluded. The biggest issues in the financial exclusion area that are not touched by the FCA’s consumer duty coming out or by its consumer vulnerability guidance are those that lurk around income when people cannot afford a product.
I will give one example to bring this to life. It is on insurance—we have talked about this before, Craig. Increasingly, insurers are becoming ever so good at finding individualised risk per person. Technology is great for that. As a rule of thumb, the mark-up works really well if you are healthy and wealthy. If you are not wealthy and healthy, you are a higher risk, and increasingly you are asked to pay more for your insurance product. We know, for example, that people in poverty pay about £300 more a year for their insurance because of their postcode, and they pay another £150 a year on top if they cannot pay up front and have to pay monthly. Those issues go across insurance. I and many of my colleagues in different organisations spend all our time going to the Treasury and saying, “This is an issue.” The Treasury says, “We have not got the data. Go to the FCA.” We go to the FCA and it says, “The pricing of risk is social policy. It is not for us. Go back to the Treasury.”
Then you go to the Competition and Markets Authority, then the Equality and Human Rights Commission. Everybody points back to the FCA as the only body, often by law, that can get access to this information, but it refuses to because it is not a priority and not within its scope. So we are simply saying there should be a “must have regard to financial inclusion” with a requirement to publish—not to do social policy, but to allow the consumer market organisations to have a conversation about these issues that have been going on for decades. As an ex-teacher, I have a handout, which explains it in one slide.
Dr James Davies (Vale of Clwyd) (Con)
Q
Natalie Ceeney: That is a really important question. When we look at some other countries, that has been the real crisis point. In Sweden, for example, the crisis point hit when shops stopped taking cash. If you are dependent on cash, there is no point having it if you cannot spend it.
I have spoken to literally hundreds of small businesses. The main reason that they do not take cash is not hygiene or anything like it; it is the ability to bank cash. If you go back three or four years, a small retailer used to shut up for 10 minutes at lunch time, pop over the road, deposit their cash in the bank and pop back. What they might now have to do, with the local bank 20 miles away and open between 10 and 3, is to shut up for an hour in the peak of the day, drive, park, queue and drive back. No wonder many shops say, “You know what? It is only 20% of my customers. I will go cashless.”
That is why in this legislation, deposit facilities are just as important as cash access. It is an area where the industry is behind. You can have deposit-taking ATMs—they are just as well tested as ATMs that issue cash. We do not yet have any mechanism in the UK for third parties to use them. It is something that I am working with the industry to solve, but this legislation is utterly critical. If small businesses can deposit cash easily, most will keep taking it.
Siobhain McDonagh
Q
Natalie Ceeney: Yes, I do. The one thing I would say as you consider the drafting is that the Bill covers small businesses as well as consumers. Small businesses, typically, via their contracts, pay for their cash access. As you draft amendments, limiting that to retail consumers is going to be important. I do not think that there is any appetite for banks to want to charge for cash access, so I do not think that you would get any opposition to putting that in the legislation or empowering the FCA to take it through to regulation.
Martin Coppack: There is absolutely a need for this. Bearing in mind today’s audience, I did a bit of research and looked at the poverty premium at a constituency level for different MPs. It might surprise you to know that a typical parliamentary constituency loses £4.5 million a year in terms of the poverty premium. That is money that could be going into your constituents’ pockets. We have linked that to research that shows that the poorer you are, the more likely you are to spend that locally. The reason I am talking about this point right now, as well as it costing £2.8 billion across Great Britain, is that the poverty premium very much exists for people trying to access cash.
If you lived in, let us say, the Conservative constituency of Vale of Clwyd, people are paying about £40,000 to access their own money. If, for example, you were in Kingston upon Hull West and Hessle, you would be paying around £70,000 to access your own money. Say you lived in the SNP constituency of West Dunbartonshire —I cannot say it; I should have practised that before I came—people are paying £64,700 in that constituency to get access to their own money. I hope that is a good representation of why we need to tackle it.
Craig Tracey
Q
Martin Coppack: Unfortunately, not a lot of progress has been made. We have had numerous conversations with the Treasury, signposting to the FCA. Some days we have the conversation about how we do not have enough data, which we cannot get hold of—firms have their own data on insurance, how it is distributed and how the calculations are made—so, unfortunately, nothing can be taken forward.
We have now done a second piece of work. We did one with the Institute and Faculty of Actuaries, which agreed that there is a real positive premium issue. We are doing a second report with the Social Market Foundation, calling again for the FCA to collect the data and for the Treasury to understand how far prices are a market problem, so regulation can tackle it, or how far it is a social policy problem, so social policy makers can tackle it. However, we cannot get further than that. I have probably been having this conversation for the past 10 years. In our world, as an ex-regulator, if it does not get measured, it will not get done.
Craig Tracey
Q
Martin Coppack: Importantly, when asking the FCA to do social policy, it would not allow it. What it is about is closing that complete spiral. Seventy-odd organisations have signed our call, and some firms. We are trying to close that loop so that we can have conversations about the most difficult things affecting the poorest of your constituents. That is all we are trying to do, and what I would urge you to support.
Emma Hardy
Q
Martin Coppack: Gosh, there was a bit there. Remind me if I do not get everything. First, the FCA will talk about the consumer duty and its vulnerability guidance. Neither of those touches anything to do with income. Vulnerability touches lots of things, like losing a partner or disabilities, which is great, but looking at income does not touch any of it. I have had numerous conversations with the FCA, and it is not supportive of this, but it recognises the issue, although it has not come up with an alternative.
On examples of how this would have worked well in the past—actually, I have a current one. How long has Natalie been trying to get some action here, on access to cash, before the infrastructure absolutely wilts away? It is a race against time. I was in the FCA 10 years ago, or whatever, and I saw all the letters going between Departments and the FCA to say, “Let’s not touch that. It is not in our remit.” That is a live one right now.
Past examples: the loyalty premium insurance everyone knew was an issue. It took Citizens Advice getting all its resources together to do a super-complaint to get any further on the loyalty premium in insurance. Access to basic bank accounts—Sian Williams at Toynbee Hall was going at this for years before we got any further. Those are the types of intervention that would be allowed.
On the difference at the ground level, I could go through a few more parliamentary constituencies. For example, tackling the insurance poverty premium would make a huge difference of £500 million to your constituents, James; it would make a difference of one million three hundred for your constituents, Emma. I could go on.
One other quick thing is that, when we talk to people in the community, they do not have a clue why the market is why it is. People like me can say, “Cost to serve—it’s a rational way the market is working.” But if you ring up and say, “I want car insurance,” they say, “We don’t serve you—it’s your postcode.” I have had people say, “If I cross the road in Glasgow, my life expectancy goes down by this much. The same applies in terms of my insurance going up.” People say they are lying on their insurance forms by putting different postcodes on, because they need their car because they are disabled. This is how consumers react to a system that does not work for them.
Emma Hardy
Q
Martin Coppack: No. We have Martin Lewis on board, for example. That might surprise some people. We have Andy Briggs, chief executive of Phoenix Group. We have Lord Holmes of Richmond, from the House of Lords. We have the Legal & General Group chief executive. That is as well as other organisations that you might expect, such as Citizens Advice. There are about 70. This is not a niche area. People see it and see the need for it. It is not just Fair by Design.
Martin Docherty-Hughes
Q
Natalie Ceeney: Yes.
Martin Docherty-Hughes
Q
Natalie Ceeney: I think that is absolutely true. One thing I would say, perhaps to connect to the points that Martin has made, is, “Wouldn’t it be nice if everybody could participate in a digital society?” There is a risk that we talk about protecting cash for its own end. The reason why we are talking about protecting cash is that the most vulnerable need it, because it works better for them than digital.
We also, in parallel, need to work to a society where everyone is included in a digital economy. If you are dependent on cash, you shop locally; you cannot shop online. That means that you pay more for your goods and services. You cannot do direct debits. You probably have a prepayment meter. Actually, your costs of living, if you live on cash, are much higher. But the people who use cash are not stupid. They are not doing it because they have not worked that out; they are doing it because they have not got a choice, so I think that in parallel—this is not covered by this Bill, but it should be something that we collectively work on post the Bill—we need to work on how we include everyone in a digital society.
That is broader than financial services. In Britain, 4.5 million people do not have any kind of smartphone; 1.5 million people do not have any broadband or mobile connectivity; and 1.3 million people do not have a bank account. There are some bigger societal issues to tackle, but we have to really make sure that this is an inclusion debate.
Stephen Hammond (Wimbledon) (Con)
Q
Martin Coppack: I am sorry: I just do not feel quite qualified to answer that one.
Gareth Davies (Grantham and Stamford) (Con)
Q
Martin Coppack: What do you mean by “best case”?
Gareth Davies
Q
Martin Coppack: We have a whole list. We deal with Bristol University. We do a range. We work out an average. And then we have figures that go much higher. If it is one in 10 of people who are in poverty, we would have a higher one. We have a whole range that we can present to you.
Gareth Davies
Q
Martin Coppack: I am not quite sure what you mean by “best case”.
Gareth Davies
Q
Emma Hardy
How they have worked it out is on the website.
Martin Coppack: It is published by the Bristol University Personal Finance Research Centre.
Gareth Davies
That still does not answer my question. If you are going to come to a Committee such as this, please provide your data.
The Chair
Order. I am afraid that brings us to the end of our allotted time for this panel. On behalf of the Committee, I thank our witnesses.
Examination of Witness
William Wright gave evidence.
The Chair
We will now hear from William Wright. We have until 3.25 pm for this panel. Would the witness please introduce himself for the record?
William Wright: My name is William Wright. I am the founder and managing director of New Financial, a capital markets think-tank.
Andrew Griffith
Q
William Wright: Thank you for the question and for the invitation to join you. Overall, the Bill gets just about the right balance between, on the one hand, the opportunity to reframe, tailor and recalibrate the framework for UK banking and finance, and on the other, to address the post-Brexit imperative to do so.
Inevitably, now that the UK has left the EU, we have to rework the financial architecture around regulation—the processes—now that it no longer goes through the European Parliament, the European Commission, the ECON committee and so on. The FCA, PRA and the supervisory architecture need to change to reflect that. I would add that the Bill draws the right balance, broadly speaking, in terms of not going too far, not trying to intervene too much in the specific legislative briefs in different sectors, and focusing much more on setting the framework.
On the second part of your question, on competitors, it is important to divide—for want of a better word—the City into two; it is a tale of two Cities. There is no competitor to the UK domestic side of the City, which is all about providing the right support and finance for UK companies and investors, and oiling the wheels of the UK economy. On the international side, of course, the competitive environment has changed quite radically over the past few years. We are now competing simultaneously with the US, with rapidly growing markets in Asia, and with renewed competition—some of it motivated perhaps more from a regulatory perspective than a competitive perspective—from European financial centres.
Tulip Siddiq
Q
William Wright: Part of that question relies on how you measure it, so I can only speak to how we at New Financial have measured it. We recently looked at and reviewed green finance activity—more specifically, green capital markets activity—in the UK and the EU. We found that, on two key measures, the UK is actually significantly behind the EU, which suggests that there is a disconnect between the widely accepted and widely stated position that the UK is already a global leader in green finance, and the widely received ambition to become the leading international green finance centre.
We looked at it in two ways. First, when you look at the UK’s market share of European activity in green finance, across equity bond and loan markets, it is about 14% of all EU plus UK activity. That is significantly lower—significantly lower—than the UK’s share of other capital markets and financial services activity. On a narrow definition of capital markets, the UK has a share of about 20% or 22% of EU 28 activity; on a broader definition of banking and finance, it has a share of just over 30%. Strictly in green finance, the UK has a share of half to two thirds of where you would expect it to be.
We also looked at the penetration: what percentage of equity capital raising—loan market and bond market capital raising—is green, in both the UK and the EU? In every single sector that we looked at, the UK lags behind in terms of green capital raising as a proportion of total capital raising. To give an indication of scale, last year roughly 20% of all capital markets activity in the EU was green; in the UK it was 9%.
There is a disconnect. I think there is an opportunity for the UK to catch up, but there is, shall we say, quite a lot of catching up to be done.
Tulip Siddiq
Q
William Wright: There is certainly a role for legislation; I am not sure that the right place for that role is this Bill in particular. It is important to step back and look at the huge amount of work that has already been done and is being done in and around green finance from a legislative perspective. The latest addition to that is the net zero review, and the green finance strategy is expected from BEIS early next year, maybe. There are sustainability disclosure requirements, the UK green taxonomy and the transition plan taskforce. That work, which is coming down the pipeline towards us, could contain a lot of the legislative impetus for the UK to close the gap.
More importantly, I think the industry is already beginning to fill the gap. Where the UK has a real opportunity in green finance in future is not so much in the level of capital raising by UK companies, but in the fact that it is in pole position to benefit from its existing expertise in markets such as risk management, derivatives and trading, as we see the emergence of a more sophisticated carbon market of green derivatives and green risk management, and in playing to its existing strengths, many of which have not been harmed or damaged in any significant way by Brexit.
Peter Grant
Q
William Wright: On the substance of that question, I will have to put my hands up and say it is not an area that we have done a huge amount of work on, although we have recently hosted some events on that theme—for example with Edward Lucas, talking about Russia, Ukraine and links back to the City.
One point I will make is that back in 2007, in a previous life as a financial journalist, I was at the official launch of NYSE Euronext—this was the merger of the New York stock exchange and Euronext, the European-based stock exchange. The founding chief executive, John Thain, who was then chief executive officer of NYSE, said he thought that London would come to regret its campaign in the previous five or six years to attract Russian companies to list on the London stock exchange. If we look back on those comments with the benefit of 15 years of hindsight, he was probably correct.
Peter Grant
Q
William Wright: I will have to fall back on saying that it is not something I have specific expertise on. I have opinions and views. I have recently read some of the works by Oliver Bullough on different aspects of this—“Butler to the World” and “Moneyland”—and it made me quite angry to read them, but it is not an area where I can claim any professional expertise to answer a question in this setting.
Sally-Ann Hart
Q
William Wright: That is sort of the trillion-dollar question, isn’t it? On EU rules, the Bill and the huge amount of work that the Treasury and others have done over the past three years address the obvious low-hanging fruit—the obvious areas of EU regulation and the framework that were not appropriate for the UK market, which has a unique dynamic within the EU. Most of those areas have been well addressed in the Bill.
On looking ahead at competitiveness, the Bill does create a more agile and nimble framework. By definition, one would hope that the UK can act more swiftly than the EU, and we are already seeing some signs of that. Again, it gets the right balance by making competitiveness a secondary objective and not a primary objective. It gets the right balance to ensure that it is something considered by supervisors and regulators but not something that overrides the fundamental purpose of supervisors to ensure a stable financial system that is competitive within itself, and where customers get appropriate protections.
We need to be very careful, in the debate on competitiveness, about assuming that competitiveness is a mechanical outcome of regulation and tax. One of the lessons we can take from the last few weeks is that a very important element of competitiveness is credibility, predictability and the robustness of independent institutions. It is important to bear that in mind when we talk about competitiveness.
In the short term, the biggest competitiveness threat to the UK—this comes back to the Minister’s opening question—is probably from additional pushback and pressure from the EU as it requires more EU business to be conducted inside the EU. We have this interesting dynamic: the UK is increasingly focusing on making people want to do business in the UK because it is an attractive environment, whereas the EU in many areas is trying to attract business by requiring people to do it there. We also need to be very careful in this debate—
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank our witness on behalf of the Committee.
William Wright: Thank you.
Examination of Witnesses
Robert Kelly and Robin Fieth gave evidence.
The Chair
Q
Robin Fieth: My name is Robin Fieth and I am chief executive of the Building Societies Association. We represent the UK’s 43 mutual building societies and seven of the large credit unions.
Robert Kelly: Good afternoon, everyone. My name is Robert Kelly and I am CEO of the Association of British Credit Unions Ltd. We represent 157 credit unions across Great Britain—roughly 62% of the market.
Andrew Griffith
Q
I would like to ask questions in both directions, if I may. First, does this legislation go far enough to meet your objectives? When I was in front of the Treasury Committee a week ago, I was challenged on the fact that it might give a greater ability to sell a broader range of products. That question came specifically in the context of co-operatives and credit unions. Do you have the necessary expertise and the regulatory rulebook to do that without prejudicing consumers? Sorry, there is a lot there, but hopefully that gives you something to open up with, and we will then hand the questioning to colleagues.
Robin Fieth: Shall I go first? We will try not to talk over each other. Thank you very much for the question, Minister, and thank you for inviting us this afternoon. From the very start we have been a strong supporter of the financial services framework review, and particularly of adherence to the original FSMA principles of setting a framework in legislation and delegating the vast majority of the detailed work to regulators.
On the first part of your question, the Bill largely achieves that objective. We can always ask for more. The areas in the framework side where we may be looking for further advancement are around, for example, the terms of reference or the operation of the Financial Ombudsman Service, as the third part of the regulatory framework. Within that, we have been very strong supporters of the PRA’s “strong and simple” initiative, which is a manifest example of how we move away from the single banking rulebook—the EU body of legislation —in a way that fosters real diversity in financial services and allows us to have a far more proportionate approach to the smaller, simpler, UK-based domestic organisations, like building societies and smaller banks.
On the third part of your question on enabling services, I would observe that the UK’s traditional approach to credit union legislation has been very much on a permissive basis: credit unions are permitted by legislation and regulation to do specific things and specifically not to do anything else. Perhaps the question that the Committee might like to consider more is the extent to which we can empower credit unions better to achieve their service to society and the communities that they are there to service, recognising that there is a regulator to make sure they do not stray too far. Those are my introductory comments.
Robert Kelly: Thank you for the opportunity to contribute today. I echo Robin’s comments in the round, in terms of the general objectives of the Bill. I welcome the opportunity to see, in a post-Brexit world for the United Kingdom, that there is a movement towards regulation and a legislative framework that is proportionate and delivers excellent consumer outcomes. That is certainly something we would echo every day of the week, so it is to be welcomed.
In terms of whether the legislation goes far enough, to echo Robin’s comments again, we have engaged on additional items with HM Treasury officials and regulators in recent times. We respect the fact that we are on a journey and that we have to ensure that a proportionality clause is applied. To go back to the Minister’s comment about whether we have all the expertise and whether the Bill goes far enough, I think those two things go hand in hand. We need to make sure that we continue to showcase the ability of the credit union sector to be a genuine competitor within financial services, that our mutuality and co-operative values shine through, and that we deliver excellent consumer member outcomes.
There are a couple of particular items that we referenced in recent conversations. We have to remember that the legislative reform agenda for the Credit Unions Act 1979 has been going on for a long time. We respect the fact that this is the most significant change since the Act itself in 1979. We are on an innovation journey and we firmly respect the fact that we need to continue to engage with all stakeholders, so we are delighted to see the possibility of additional new products and services being available to the credit unions that want to take advantage of the opportunity to provide them. Hopefully, credit unions can garner a wider share of financial wallets across households throughout the country and make sure that we serve more than the 2 million people we currently serve—that that number continues to increase.
There are a couple of examples that we have talked about. We believe there is a need for a future conversation around the common bond field of membership reform—something we have flagged to HMT already—and also around the possibility of innovation for credit union service organisations. That model is so prominent in and brings many, many advantages to the North American credit union system.
Lastly, in terms of the question about expertise, on the basis that we have had a long-standing conversation around legislative reform, we have been proactive in the background to make sure that we talk to our member credit unions, in conjunction with the BSA and other trade bodies and interested parties, to make sure we have the relevant conversation behind the scenes. We are preparing the ground for credit unions to understand that with the opportunity for new products and services come additional requirements around good consumer outcomes, compliance requirements and in-house training and development. That is something we have been doing in tandem with the legislative reform agenda.
I am firmly confident that we will be able to hit the ground running quickly as and when the legislation goes through both Houses, and that we have the ability then to expand our product and service range and make sure we can serve many more people with ethical finance across the UK.
Tulip Siddiq
Q
Robin Fieth: The first thing is to look at the tradition—the tradition of the UK has been that our regional mutual financial institutions have either been insurers or building societies, traditionally, or, in the last 30 or 40 years, credit unions—compared with the United States or large parts of Europe, where there is a very long tradition of mutually-owned community banks, co-operative banks, lifelines and so forth. Our tradition is very different. Apart from the Co-operative bank, we have never had a large, mutual, fully general-purpose bank. Nationwide is a full retail bank, but it does not do business lending, for example. We have never had that tradition.
As some of you will know, there are a number of small community banks in the mobilisation phase or coming to mobilisation phase. On the second part of your question, the Bank of England’s new banks team has been very good at helping challenger banks to get through the process and start up, and we have seen so many start up. I am not sure that they have the same experience and expertise in respect of what the mutual model looks like and why it is different. If you talk to any challenger bank, they will say it was much more difficult to get through mobilisation than it should be. If you talk to the community banks, they say it is very difficult to get through mobilisation. There are at least three that we are working with on the side, if you like, that are going through that process.
The real challenge, where perhaps there is a role for Government, is in creating the forms of capital that mutual start-ups can follow, because they cannot be venture-capital backed, so you need some form of mutual capital. We have suggested to both the main parties, for example, that whichever version of the British Business Bank you want, it could have a mandate for part of its capital being mutual capital.
Robert Kelly: Robin has covered the vast majority of the salient points, and we would agree with his comments. In terms of taking it maybe a step further or down in respect of the community banking model, as Robin mentioned there is a development agenda in a few areas of the country. There is certainly space for innovation and competition in SME lending and around transactional activity and transactional accounts and making sure there is something different from a competition perspective —maybe where the bigger banks are not necessarily in those spaces or where there is perhaps an opportunity for some more partnership and co-operation. We have talked to some of the community banking models about what space they and the credit union sector could co-exist in. We acknowledge that credit unions are already able to do corporate lending and SME lending, and some have done so. I think around 20 or 21 credit unions across the country have taken advantage of that. The ongoing PRA consultation on the future supervision and regulation of the credit union sector has some reference to that, in terms of additional checks and balances.
We recognise that there is opportunity for the credit union sector to do more. A big part of the legislative reform package that will ultimately impact credit unions can be described as an enabling factor that allows product and service innovation and development. Alongside the community banking and mutual banking model, the development that we have seen, and all the background that Robin has already mentioned, it should be made clear that we in the credit union sector believe that we can also fill some of that space. If the overall objective is around competitiveness and enabling competition, we should be ready to act, and to respond to the needs of communities and small businesses across the country.
Peter Grant
Q
Robin Fieth: Whether the term is “corporate takeover” or “demutualisation”, which was very much encouraged by the Government of the day, is a moot point, but you are absolutely right: there is or was a very proud trustee savings bank tradition, and of course it started in the lowlands—well, the borders—of Scotland. Sadly, the last trustee savings bank went into run-off within the last five or six years. That was the Airdrie Savings Bank. It is a tradition that we no longer have. Again, those institutions were not a full service of the kind that the shadow Economic Secretary was talking about. They were not a full service model. They were very much a savings and loans model, largely for retail purposes. That is the tradition we had, yes, but it is now sadly part of our economic history.
Peter Grant
Q
Robert Kelly: Yes, of course; thank you for the question. Credit unions play a unique role in the economic infrastructure of this country. I mentioned that we serve 2 million people, but we have huge aspirations to make sure that that goes much further. After this session, I am joining a call on the cost of living crisis and the impact that the credit union sector is having in different parts of the country. A really good example is Bradford District Credit Union, which is working in tandem with the local authority on a range of products and initiatives that have built financial resilience and financial inclusion in that part of the country. There are many more examples across the UK.
The financial inclusion agenda chimes perfectly with our objectives, our ethics and the co-operation and mutual model that credit unions are built on. The important point to state is that we believe that that work can be accelerated and amplified in a significant way. We can do much more. The phrase that we would use is that we manage to put in place a balanced demographic of membership. The credit union should be seen as a safe and innovative place for any member of society, any consumer, to go to. It goes back to the comment that Robin made on full service. We believe the legislative reform package that is on the table for the credit union sector will allow us to do that. It will allow us to be more competitive, to look at risk-based pricing and to make sure that we are seen as more mainstream—and to serve a wider part of the population. Doing that creates an environment where additional financial inclusion initiatives and objectives are made possible, because we are building sustainability and the strength of balance sheets for credit unions across the country; those things go in tandem.
We have worked closely with a range of Governments over many years to deliver great value, and also financial inclusion objectives, but we need to make sure that there is a balance of products and services, and a balanced demographic that allows us to do much more of that. We have said that in the past, credit unions have unfortunately been seen as the poor person’s bank. We have worked incredibly hard to move away from that area—with, I think, great success. The legislative reform package that is on the table for the credit union sector will allow us to do much more, and it should be seen as very positive.
Peter Grant
Q
Robert Kelly: I will give two examples. Credit unions will have, for the first time, the ability to offer car finance under personal contract purchase or hire purchase—conditional sale activity. We can also be immersed back into the general insurance mediation process. That means that we can diversify our product range. It should mean that we can diversify our income lines, which should result in greater sustainability for the sector. Those are two examples where we were very firmly part of the legislative programme that has been developed for the credit union sector.
On competition, we recognise that we are a small player overall in the financial services landscape, but we can do more, and have huge aspirations. We have that wider product and service range. Investment in technology will allow us to be seen as being more mainstream. A bigger part of the financial wallet for many households across the country could be maintained by the credit union sector. The Bill certainly has its elements there.
We talked about credit union service organisations. It is important that we continue to have that conversation with all relevant stakeholders, look at where in the sector there is innovation in the overall infrastructure, and consider how we can learn from the successes of the model used in North American and other parts of the world. The Bill goes a long way to allowing us to diversify, and to become more competitive and more mainstream. That is to be welcomed. There are certainly follow-on elements that we will undoubtedly talk to officials and regulators about in the weeks and months ahead.
Peter Grant
Q
Robert Kelly: We recognise the difficulties in terms of reputational risk, and the challenges that failure brings. We are working tirelessly with our member base. We are a very broad church. Our members have asset sizes from a couple of hundred thousand to well over £220 million, and everything in between. We recognise that failure is difficult and painful. We are working extremely hard behind the scenes collaboratively with the BSA and other interested parties. Credit unions that fail often have a couple of items in common. There tends to be a lack of good governance, and sometimes there is key person risk. Covid has exacerbated some of that, just in terms of volunteer burnout and sustainability challenges, demand for lending and bad debts. We have been impacted by insolvency and mis-selling in many cases as well. We have identified that it can be difficult to maintain a smaller asset range using a volunteer base—not always, but sometimes. We are working tirelessly behind the scenes to make sure that credit unions look at their business plans and numbers on a regular basis, and take the tough decisions.
Let me bring that to life, very quickly. The original development of the fiscal principles was in 2002. In that year, we had 698 credit unions in GB; we are now down to fewer than 250. Most of that reduction in numbers came through consolidation and mergers or acquisitions. Some of it has been failure. We certainly believe that the number will continue to come down. It would be appropriate to find solutions that allow credit unions to come together as part of mergers or acquisitions and maintain services in their local communities.
Siobhain McDonagh
Q
Robin Fieth: That is a great question; thank you very much. We are already part of the way there with the PRA. It has had a secondary competition objective since the 2014 Act, and it was subsequently enhanced at the BSA’s behest. Every time it consults, it has an obligation and a requirement to determine whether there are specific aspects that disproportionately affect the mutual sector, and that has been welcome. We have seen a real change in the PRA’s approach to the financial mutuals since the financial crisis, and it has been largely positive.
There is a very important question as far as the FCA is concerned. We saw it last year with the proposed demutualisation of LV. It was apparent that the FCA was entirely agnostic on the business model, in terms of their competition objective and the good competition that achieves better customer outcomes on the conduct side. There is certainly a case for the FCA to consider that far more closely. I am always very careful when we talk about conduct outcomes with the FCA because, as a consumer, you should not have a different outcome, but you might experience a different journey. There are some nuances in there. As to how it best achieves that without adding ever more reports and burdens, that is in its annual reports, which are obviously open to examination and scrutiny. In the regulator’s annual reports, it should report back on that; that would be the most straightforward way to achieve that.
Robert Kelly: Thank you again for the question. I echo Robin’s comments, but I will try not to duplicate them. Credit unions have an ongoing consultation with the PRA on future supervision and the regulatory environment. We have a long track record of working in tandem with the PRA, and there is a move towards making sure that the supervision model is in tandem with the legislative reform agenda, which seems eminently sensible. It also allows us to take cognisance of the fact that there are many more larger, asset-based credit unions than there were five or 10 years ago—we have to factor in whether that comes through consolidation, or just through business growth—which is hugely beneficial for all parties.
In terms of the FCA, obviously the credit union sector is dual-regulated. We have a relationship from the conduct side. It will be interesting to see how that approach develops. Again, I would echo Robin’s view: the FCA has such a broad remit, in terms of the firms that it looks after, and we are always championing the cause of proportionality. Consumer duties are an example of where we have to work in collaboration with all relevant stakeholders and interested parties to make sure that the good consumer outcomes that credit unions provide can be evidenced, and that we can go on that journey. There are live examples of those on both sides of the regulatory environment taking steps to be innovative and to future-proof the business development that we expect to see through this legislative programme. That is to be welcomed, but we are on a journey, and we are not yet at the end.
The Chair
Order. I am afraid that brings us to the end of the allotted time for this panel. On behalf of the Committee, I thank our witnesses.
Examination of Witness
Mike Haley gave evidence.
The Chair
We have until 4.10 pm for this panel. Would the witness please introduce himself for the record?
Mike Haley: Good afternoon. I am Mike Haley, chief executive officer of CIFAS, the UK’s fraud prevention service. We are a not-for-profit membership organisation of 600 members. Member organisations are, in the main, financial services—banks, fintechs, alternative lenders and mortgage providers. We also share data and intelligence on fraud and financial crime.
Sally-Ann Hart
Q
Mike Haley: Yes. One of the issues with a contingent reimbursement model in any compensation scheme is that it is not a fraud prevention initiative in itself; it really just says who suffers the risk of the fraud. It passes the individual loss on to the banks. The emphasis is on a large amount that you could get away with without thinking that you have taken it out of an individual’s pockets; a faceless bank will pay up to £1 million. Any limit of that size reduces any moral questions a fraudster might have about who they are stealing money from.
Tulip Siddiq
Q
Mike Haley: There are three interconnected reasons why scams have reached such frightening proportions. First, the reach of social media and online platforms means that scammers and fraudsters can reach millions of people—marks and vulnerable people—much more effectively.
Secondly, we have seen organised crime turn its hand to fraud because it is a low-risk, high-return crime. Their skills have grown in something called social engineering, which is how they to persuade someone that they are calling from the bank or from the police by impersonating others. They have become very skilled in that.
Thirdly, faster and instant payments mean that once a fraud has been successful, and you mandate a payment through your bank account, it is very hard for banks to tell that that is a fraudulent transaction, because it has been mandated by the customer. Then, there is a network of money mule accounts, which are either accounts that have been set up for those proceeds to go through, or accounts belonging to people who have been duped into allowing their accounts to be used for that money to go through. Instant payments mean that that is untraceable very quickly. I remember investigating a mass fraud—[Interruption.]
The Chair
Order. We resume our session. I think a question was put to you. Do you want it repeated?
Mike Haley: I do not need the question repeated.
On the question of what has created the significant increase in frauds—particularly authorised push payment frauds, known as scams—I was saying that there are three interconnected issues. First, there is the reach of social media. Secondly, organised crime has turned its attention to fraud. Thirdly, the faster payments regime has enabled fraudsters to quickly dissipate the scam funds.
One of the things we have seen with the dissipation of scam funds is that they often go into cryptoassets and crypto exchanges. That is why, as part of the Bill, we welcome extending the regulatory perimeter to cryptoassets—digital settlement assets—so long as, in that authorisation process, there is a risk assessment around economic crime. Authorised crypto firms should meet the same standards as banks, in terms of know your customer—customer due diligence—and should have in place the anti-money laundering, counter-terrorist financing and fraud operational standards that we expect from the other financial service players so that it is a level playing field.
Emma Hardy
Q
Mike Haley: I will take those in reverse order. Provisions that facilitate greater data and intelligence sharing, particularly on suspicions of fraud and financial crime, would have the biggest impact in helping to prevent this type of crime. It is a crime that is at scale and at speed in the online environment. To be able to share the mobile numbers that are being used, the devices and the IP addresses at speed across the whole of the environment—payment providers, fintechs and telcos—would be enormously powerful. This is a volume crime, and we need to have prevention at the core of any national strategy. That would have a massive positive impact.
I would like to see it go further. I would like it to be mandatory, because why should an organisation sit on knowledge about fraud or financial crime, and not share that with others to protect the whole of the financial services industry? There should certainly be strong leadership saying it should be done. For those who do not, I would like it to be mandatory, but it should certainly be facilitated. There should be something in the Bill that facilitates that sharing.
Emma Hardy
Q
Mike Haley: And that they can. A lot of the time, organisations feel, rightly or wrongly, that they cannot share this type of data and intelligence. They might quote the General Data Protection Regulation, but in my view the GDPR says that it is in the legitimate interests of businesses to share data to protect their services and consumers. There is a lack of confidence in doing that, so we should have something very explicit that says not only that it is allowable but that it is expected, because we are all part of the same ecosystem, in which people are being scammed and organisations are losing literally billions of pounds.
Absolutely, there should be a national strategy, and prevention should be at its core. We are looking forward to the Home Office publishing a national strategy; it has been much delayed, and it is very much anticipated. From what I have seen, I would like it to be more ambitious, and to cover the public and private sectors, as well as law enforcement. Fraudsters do not decide one day, “We only go after bounce back loans because that is a public sector fraud.” They will go after a loan from the Nat West bank, or a mortgage. A lot of data is not being shared between the public and private sectors and law enforcement. That would be a powerful set of data and intelligence, which would make us more effective as a country in defeating fraud.
Emma Hardy
Q
Mike Haley: If we are looking at some of the regulators’ new rule-making powers, and also with the panels that have been suggested, with any rule or policy change they should be thinking about what the economic crime impact will be.
Emma Hardy
Q
Mike Haley: Yes, because there can be unintended consequences some way down the line that were not thought of at the start. Faster payments are a really good example; they put the UK in a competitive position and most people would support faster payments. However, we find that they have been exploited. There could have been some thought about, for example, in what circumstances we slow that journey down to prevent fraud. With any new rule changes we should ask what the impact could be, and what unintended consequences there could be—does it open a gateway for fraudsters or criminals to exploit? I think that would strengthen the Bill and also give some real teeth to a regulator—to be held to account about whether they thought about it at the outset.
Andrew Griffith
Q
Mike Haley: Yes, I think we have seen in the past that regulators have not moved quick enough when there has been widespread harm. We might look at payment protection insurance, for example, where consumers brought plenty of reports into MPs’ and Government in-trays, and yet the regulator was rather slow in intervening in a market—a market that had been abused. I think that an intervention power could be very powerful.
Martin Docherty-Hughes
Q
Mike Haley: I think one of the problems of all legislation is how quickly it keeps up with changes in technology, and it being broad around principles. As I mentioned, with the authorisation of anyone who becomes a regulated entity dealing with digital settlement assets, it is important to have clear criteria for the onboarding—know your customer—and to know who the accounts are opened by. I find that already we are looking at money laundering through coin swap services, for which you do not need an account and may not be under this regulation. There are cross-chain bridges, where someone can move from one blockchain to another. I am not an expert on whether clauses 21 and 22 cover some of those services that have been created, which were probably not in the thinking when the Bill was starting to be drafted.
Martin Docherty-Hughes
Q
Mike Haley: There are a number of questions there. One is whether the legislation is broad enough to ensure that the regulator can act on some of those services. They need to be included in the perimeter. I do not think that some of these services—I talk about those coin swap services—are actually in the purview. There are cryptoassets and cryptocurrency exchanges, but some of these other services have been created, and from my reading of those provisions, I do not think they are covered.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank our witness on behalf of the Committee.
Examination of Witness
Adam Jackson gave evidence
The Chair
Q
Adam Jackson: I am Adam Jackson, director of policy and regulatory affairs at Innovate Finance. We are the trade association for fintech in the UK, representing, if you like, all of the new technology-based financial services that have emerged, maybe in the past 10 to 12 years, including payments, challenger banks, consumer credit and personal management tools—and crypto are part of that.
Andrew Griffith
Q
Adam Jackson: I think that is a good phrasing, Minister, of looking ahead. I think we have in the UK a great 10 years. We are No. 2 for investment in fintech in the world, and have been consistently. The question is, how do we maintain that at a time when we are on the cusp or in the middle of a new wave of financial technology?
The first wave of fintech was very much about consumer interfaces. I think what we are then seeing, and will see over the next 10 years, is the application of technology to the whole of financial services—to the financial systems—to the plumbing, if you like, of financial markets, not just that consumer interface. The question is, how do we build on our superb record until now to ensure that we are at the forefront of what will be digital financial markets? That then becomes not just, “How do we maintain our lead in fintech?” but “How do we ensure that we are a global leader in finance?”
If I then look at the Bill and think about what is needed, I tend to categorise it in three ways. First, is there regulation that needs updating? Is the regulatory rules system fit for purpose? Does it enable—or actually open up—innovation? Is how we regulate agile enough, particularly as technology and the economy move quickly?
Looking at the Bill and “fit for purpose”, the proposals, particularly on stablecoin, are really welcome. They tackle an issue that we have seen in the market this year and bring into scope that new technology.
Does it enable innovation? I think, there, the financial markets infrastructure sandbox is important for looking at how we support different ways of regulating. That gets into the agile regulators as well. Then, when we look at systemic stablecoin, that is about enabling innovation. We will only see stablecoin really developing as a fundamental part of payments systems, and therefore only see the UK maintain its lead in payment innovation, if we have new provisions around systemic stablecoins. The Bill covers all those.
Are there other areas that we would like to see? In terms of the regulatory behaviours, the competitiveness objective is very welcome. On the secondary objective, we would love to see it extended to the Payment Systems Regulator. We have heard quite a bit today about the Bill providing new powers to the PSR so there is a strong case for applying the competitiveness objective to them, as well as some of the other bits of the financial future regulatory framework.
On the question whether we could apply a competition objective to the Bank of England, when we think about things such as central bank digital currency, how that is implemented—as well as if—becomes really important. Central bank digital currency could crowd out innovation and stablecoin unless it is designed in a way that promotes competition. Sir Jon Cunliffe talked about how he absolutely sees a place for stablecoin and a CBDC alongside, but is thinking about some protections around that.
Then, two final pieces would be looking at whether there is scope to strengthen the competitiveness objective, moving from facilitate to promote, and finally, thinking about the Financial Ombudsman Service. A lot of our members raise concerns with us that they have agreed approaches with the FCA, only to find that FOS caselaw rules against things that they have already agreed with the FCA. So more to ensure that consistency, and if there is a way of ensuring that the FOS refers to the FCA for rulings on certain issues, that would help.
Tulip Siddiq
Q
The other thing I wanted to ask about is investment in the UK fintech industry, which was down to £9.6 billion in the first six months of this year, which is three times less than exactly the same period last year. Do you want to comment on the reason for that decline? What should we be doing as politicians to try and help with that?
Adam Jackson: Taking your first question, it is worth looking at the EU MiCA regulation and possibly the approach of a territory such as Singapore. It links a bit to the investment. We did some analysis of investment in just crypto alone, looking at that as a vertical within fintech, and again, the UK has always been the second location for crypto investment in the world, after the US, until the first half of this year, when we fell behind to Singapore. That might be a blip, but when you then look at regulatory mapping, you will see that Singapore possibly has the most forward regulatory system, particularly for stablecoin. The EU has a very comprehensive approach, but is has not come into force yet. Singapore has an established system, so I think that shows that if you get it right and have a proportionate regime, you attract the industry and the investment.
Is the EU approach right? There are strong arguments to say that it is possibly too comprehensive, and we come back to the notion that trying to find something that works for all 27 does not fit our circumstances. The UK is right to take a more iterative approach. We obviously have a common law approach as well, which means there are certain things we can do through case law. It is absolutely right that we are focusing on stablecoin and that is where some of the biggest volatility in the market was this year. The Bill addresses that, which will be really important in providing confidence for consumers and, critically, for investors in technology firms in that space.
The EU rule applies to not just stablecoin but cryptocurrencies more generally and exchanges, so should we also have a regulatory regime for other cryptoassets? I think the answer is yes. The question is how it fits within the Bill. The Government have said that they will introduce proposals for wider regulation of other cryptoassets. We expect something at some point, possibly soon.
That begs the question whether the Bill already enables the introduction of regulations. We probably need to ask Treasury counsel about the definition of a digital settlement asset. The Bill allows for the definition to be changed. Do the rules enable it to cover other cryptoassets? If it does, the powers are there to enable regulators to introduce systems subject to the proposals. If not, will we have to wait another 20 years before regulators are given the powers to regulate cryptoassets?
On cryptoassets, the important things that our members, including exchanges and cryptoasset firms, emphasise are an authorisations regime, a set of rules for initial coin offering—essentially, clear guidance on what information should be provided to consumers about individual assets—and custody. The Bill provides for applying rules on custody for stablecoin. If we do not have a parallel system, we will start to see some question marks over why those custody rules do not apply to cryptoassets as well.
On investment, there are different ways of looking at the figures from the first half of this year. Some investment, particularly VC, has really held up, but we know that globally we can expect a fall in investment, and we are just starting to see that trickle through. It is therefore a question of how the UK holds up against other countries. We might even see more mergers and acquisitions. At the moment, the pound makes the UK a nice place to come to buy fintech firms, so there may be a bit of difference there. It comes back to maintaining that competitiveness. Our members tell us that the most important thing is to get the Bill through. It provides important powers. If we can strengthen it in some of the areas that I mentioned to the Minister, that is also critical.
The other thing that I would flag is that there are two other pieces of legislation that are either before the House or slightly in limbo. They are also important for the competitiveness of fintech. One is the Data Protection and Digital Information Bill, introducing digital ID and open data, which will really transform the open banking we have into open finance. Australia already has that, so there is a risk of us falling behind. That Bill is also really important.
We have heard a lot about fraud. The provisions in the Online Safety Bill around making the places where frauds are advertised—the social media platforms and search engines—responsible for fraud, as well as requiring banks to reimburse, are critical. That is starting to be a factor in investment decisions. Whatever happens to that Bill, ensuring that those provisions are introduced as soon as possible is key.
Martin Docherty-Hughes
Q
Adam Jackson: I was not suggesting that we should necessarily compare the exact regulatory regime—the economy is a very different size—but I would take the wider point that a territory that has been seen to introduce some regulatory rules, as opposed to having none, is seeing increased investment.
The other place to look is the US. I was in Washington last month talking to policymakers, and the area where there is most likely to be a bipartisan Bill next year is regulating stablecoin. In terms of our international competitiveness, others are moving, and the Bill enables the UK to keep up.
The Chair
I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank our witness on behalf of the Committee.
Examination of Witness
Martin Taylor gave evidence.
The Chair
We will now hear oral evidence from Martin Taylor, former external member of the Bank of England’s Financial Policy Committee. For this panel we have until 4.55 pm. Will the witness please introduce himself for the record?
Martin Taylor: I am Martin Taylor. I have spent a lot of my life in finance and in policymaking work for the Government. What probably most interests you is that I spent seven years—until the end of March 2020—as a member of the Financial Policy Committee at the Bank of England, which is to do with macroprudential policy.
Andrew Griffith
Q
Martin Taylor: None.
Andrew Griffith
Q
Martin Taylor: I have acted as an adviser to Gordon Brown, Alistair Darling and George Osborne—eclectic, you might say.
Tulip Siddiq
Q
Martin Taylor: Let me speak plainly, because it is late in the afternoon. I think this is a shockingly bad idea. I think it will certainly undermine regulatory independence —without any doubt—simply because regulators who are subject to the whim of Treasury officials or Ministers are not independent. It is a major erosion of the institutional framework. One could even say it is a corruption of the framework. For me, the institutional framework is hard-won and very precious. I can only suppose that those proposing the powers either do not understand it or do not care about it.
Stephen Hammond
Q
Martin Taylor: The wording that I have seen is of course not final, but what I find strange is that it suggests the regulators are not acting in the public interest. If they have to be overruled in the public interest, clearly you think they are acting in some other interest. For me, the regulators are the public interest made flesh.
Stephen Hammond
Q
Martin Taylor: The Government have enormous influence over the regulatory process. Sometimes people characterise the regulators as living in an ivory tower or something like that, as if they are academics who sit, removed from the real world, and think up rules without any feeling for what impact they might have. In fact, if you think about it, first of all, the independence of the regulators, such as it is, is circumscribed—it is set by Parliament. It is all set by primary legislation; that is No. 1.
Secondly, the wider Government and particularly the Treasury have tremendous powers to influence regulation. The Treasury appoints all the independent members of committees. The Governor and the deputy governors of the Bank of England are Crown appointments, so effectively No. 10 and the Chancellor have a certain say. The Treasury representatives sit on these committees and let the regulators know the Chancellor’s view. The Chancellor, whoever it may be at the time, writes to the committee and sets out their views on the things they ought to take into account.
There are very close working relationships between the Governor, the Chancellor and the permanent secretary, and then all the way down the chain at the Bank of England. The regulators swim in the soup like everybody else.
Stephen Hammond
Q
May I ask your views on the secondary objective?
Martin Taylor: The new secondary objective?
Stephen Hammond
Yes, the new secondary objective as proposed in the Bill.
Martin Taylor: I have a curious view that the fewer objectives you have the better, because the more likely you are to hit them. I have no objection to the secondary objective, if I can put it that way. It does not seem to me offensive. I was very pleased to hear the then Chancellor say in the Mansion House speech that there was a clear hierarchy of objectives, and that seemed to me to be fine. I don’t worry about that.
Stephen Hammond
Q
Martin Taylor: If that can be done, I would certainly welcome it. One of the difficulties that the Financial Policy Committee has always had is that if your job is maintaining financial stability, it is not always very easy to see if you are succeeding. One can see that recently, for example, the Monetary Policy Committee has not been meeting its inflation objective. That is an objective in hard numbers, and for the FPC and for other regulatory bodies it is harder.
Emma Hardy
Q
Martin Taylor: I do not want to exaggerate. I said this was a corruption of the system and corruptions work slowly, so it does not make us into Argentina or Turkey overnight but that is the direction of travel, if I can put it that way. Independent regulation is not an aesthetic choice; it is a practical one. I think the transparency of the regulatory process in London—the need for the regulators to explain themselves and especially the scrutiny by Parliament—is one of the cornerstones, along with the legal system and various other things we are familiar with, of London’s attraction as a financial centre. The UK’s reputation needs a bit of tender loving care at the moment, I would say, and bringing in unnecessary measures that risk damaging it seems to me unintelligible.
Emma Hardy
Q
Martin Taylor: Completely—just knock it out. I see no advantage in its existence.
Emma Hardy
Q
Martin Taylor: One of the problems that led to the recent turmoil—a very English description of what has just happened—was that the Prime Minister and the former Chancellor chose not to subject the mini-Budget to the scrutiny of the Office for Budget Responsibility. Had they done so, the OBR might of course have objected to various parts of it, which is perhaps why they did not do so.
However, international investors looking at London will have noted this and it has a bad smell, if I can put it that way. I am not worried about the bond traders who price the market day by day. The volatility was extreme and very dangerous. It has been settled by the Bank for the moment, I hope. I am much more worried about the people running really big blocks of money—big foreign sovereign wealth funds or big institutional investors—who look at London and say, “Is it worth having an allocation to gilt-edged stock? Do we want to be exposed to sterling if this is the sort of thing that goes on?”.
These are the strangers on whose kindness Mark Carney told us we relied and we antagonise them at our peril. That is what worries me more than anything else: that we suppose that foreigners will always want to buy gilts. Why should they? You could run a huge international portfolio and have zero allocation to sterling at the moment. If you were in Singapore or New York, you might be more tempted to do that than you would have been a month ago. We should not do anything else to make this worse. Everything is being done by the new Chancellor to steady the ship—thank goodness—but moves like this proposed measure just go in entirely the wrong direction as far as I am concerned. I think it is very dangerous.
Peter Grant
Q
Martin Taylor: I do not know. I probably have the same suspicions that you have. London has a huge financial sector and dirty money is easier to hide in places where there is lots of money than in places where there is not very much. I have never worked in, or with, the Financial Conduct Authority, but sometimes it gets blamed when things go wrong, which is a bit like blaming the police for crime, if you know what I mean. There is a lot of dirty money in the world and a lot of it will try to come here. I think the regulators do their best.
Peter Grant
Q
Martin Taylor: I would rather not accept the premise. We have to ensure that the world is happy to invest clean money in the United Kingdom. It is extremely important that we do that. No, I do not see us becoming a sort of sewer market—I mean, God forbid—but we have to be careful and we have to keep standards up. In taking out some European regulation—which we ought to do, because not all European regulation is good and valuable, and I am glad that the Bill allows us to do that—we need to be very careful. There are babies in the bathwater.
Peter Grant
Q
Martin Taylor: The FPC, for every quarter that I was a member of it—and I think it is still doing it—was saying that the intention was that the regulatory framework, when Britain left the European Union, would be a least as rigorous as the EU’s. In one or two places, it probably needs to be more rigorous than the EU’s, because there is some lowest common denominator there. In others, the EU has unnecessarily gold-plated things, but it needs to be done very precisely and carefully.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions. I thank the witness on behalf of the Committee. The Committee will meet again at 9.25 am on Tuesday 25 October to begin line-by-line consideration of the Bill.
Ordered, That further consideration be now adjourned. —(Joy Morrissey.)
Westminster Hall
(2 years, 1 month ago)
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Scottish Devolution Settlement: Retained EU Law
(2 years, 1 month ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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This information is provided by Parallel Parliament and does not comprise part of the offical record
Mrs Sheryll Murray (in the Chair)
I wish to make a short statement about the sub judice resolution. The question whether provisions in the draft Independence Referendum Bill relate to reserved matters under the Scotland Act 1998 has been referred to the Supreme Court and a judgment is anticipated in the coming months. I am exercising the discretion given to the Chair to allow reference to the issues concerned, given their national importance.
Brendan O'Hara (Argyll and Bute) (SNP)
I beg to move,
That this House has considered the impact of retained EU law on the Scottish devolution settlement.
It is a pleasure to see you in the Chair for this morning’s debate, Mrs Murray, and I welcome the Minister to his new post.
Should this shambles of a Government manage to stumble on past the weekend, we are being told that their Retained EU Law (Revocation and Reform) Bill will come before the House on 25 October. The Brexit freedoms Bill, as the Government like to call it, will give UK Ministers unprecedented powers to rewrite and replace almost 2,500 pieces of domestic law covering matters such as environment and nature, consumer protection, workers’ rights, product safety and agriculture, and that will be done with the bare minimum of parliamentary scrutiny. It is, in short, an ideologically driven deregulatory race to the bottom that will do enormous damage to our society and our economy.
The Bill, taken in conjunction with the United Kingdom Internal Market Act 2020, will fundamentally undermine and alter the devolution settlement by giving primacy to UK law in areas that are wholly devolved, such as environmental health, food standards and animal welfare. Today, I thought it would be useful to consider the Bill to examine what it could mean for Scotland and for the devolution settlement. I believe that any objective analysis would see not only that it puts at risk many of the high standards and protections that the people of Scotland have enjoyed and come to expect from more than four decades of EU membership, but that it is part of the Government’s long-term plan to undermine the devolution settlement and weaken our Scottish Parliament.
Under the Bill, and with the 2020 Act already in place, any legislation passed by the Scottish Parliament could be undermined by a Government here in Westminster whom we did not elect, even in matters that are wholly devolved. I will give a few examples. In the area of food standards, if the Scottish Parliament decided that we would remain aligned with the European Union and would ban the sale of chlorinated chicken, but this place decided that cheap, imported, chlorine-washed chicken was acceptable, there would be almost nothing the Scottish Parliament could do to stop lorryloads of chlorine-washed poultry crossing the border, with that chicken then appearing on our supermarket shelves.
Similarly, if the UK agreed a trade deal that saw the UK flooded with cheap, factory-farmed, hormone-injected meat, but the Scottish Parliament decided to protect Scottish consumers and Scottish farmers by adhering to the standards and protections that we have up to now enjoyed, under the terms of the Bill—again, backed by the 2020 Act—Westminster could override that and Scotland’s supermarkets could be inundated with inferior-quality cheap cuts of meat that under existing EU law would get nowhere near our supermarket shelves.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Is it not the case that this is not just about standards? On farming and farmers, we have only to look at the trade deal signed by the UK with Australia and New Zealand, which allows them a higher quota for importing lambs to the UK than is allowed for the entire EU. The EU is protecting our farmers whereas the UK Government are throwing them to the wind.
Brendan O'Hara
I thank my hon. Friend for his intervention. He is correct, and I will expand on his point in a moment.
This Government and the Bill are an existential threat to Scottish agriculture. Scotland could decide to stick to long-established best practice in the welfare and treatment of animals, and retain the stringent checks on animals entering the food chain. However, if this place decides to deregulate, animals whose provenance is unknown, and whose welfare history is unaccounted for, can and almost certainly will enter the food chain. Most worryingly, if the Government decide to change food labelling standards, Scottish consumers not only could be subjected to chlorine-washed chicken, hormone-injected beef, genetically modified crops and animals of questionable provenance, but will probably not be able to tell what they are eating. The labelling regulations could be so diminished that the protections consumers now enjoy could be completely removed.
On Friday, I met with the Argyll and Bute regional board of the National Farmers Union Scotland. Its message was stark: farmers feel forgotten and undervalued. They have been battered by Brexit. They are barely surviving the energy crisis. At a time of falling incomes, they are at a loss as to how they will cope with the skyrocketing costs of feed and fertiliser.
Farmers know, too, that the Retained EU Law (Revocation and Reform) Bill is a potential death sentence for an agricultural sector that requires a hefty subsidy. It needs that subsidy because it manages the land, keeps the lights on in our hills and glens, provides employment in rural communities, and helps stem the tide of rural depopulation while producing high-quality, high-value beef, lamb and dairy products. They know—we all know—that the lowering of food standards, the relaxation of rules on labelling and animal welfare, and the mass importation of inferior products will be an unmitigated disaster for Scottish agriculture. They are also painfully aware, as we are, that there is precious little that their democratically elected Scottish Parliament can do about it.
Jim Shannon (Strangford) (DUP)
The hon. Member will know that his opinion and mine greatly differ on this precious Union. I understand that, but it does not make us friends any the less; we are dear friends, and work on many things together. One of the reasons for that difference of opinion is seeing the impact that being slightly removed has had on constituents, which he has referred to. Undoubtedly there are some businesses that will thrive in dealing with the EU, but for the vast majority, basics are more expensive to come by. It is simply wrong to have no representative to speak on our behalf on EU legislation. We are painfully aware of that in Northern Ireland. It goes against everything we in a democracy hold so dearly and believe. Does he agree that no nation can knowingly subject itself to law with no voice?
Brendan O'Hara
I thank my dear hon. Friend, and reciprocate the feelings that he has expressed. Every community needs a voice, and his community and farmers need a voice. His farmers need protection. I would caution that his farmers will look at the situation and also be extremely worried that, if the Retained EU Law (Revocation and Reform) Bill and the United Kingdom Internal Market Act 2020 are spread across into Northern Ireland, as they may well be, they will face the same threats as Scottish farmers.
Angus Robertson MSP, Cabinet Secretary for the Constitution, External Affairs and Culture, has already raised the Scottish Government’s serious concerns with the Secretary of State. The Minister will be aware that if the UK Government act in wholly devolved policy areas, they will do so without the consent of Scottish Ministers or the Scottish Parliament, and that will significantly undermine the devolution settlement.
As I said earlier, we will be in a deregulatory race to the bottom, a race in which individual citizens will surely lose out to the spivs and the speculators—and no doubt to the politically connected, who will be fast-tracked into making a quick buck at citizens’ expense. The Government say that the Bill will give the UK the opportunity to be bolder and go further than the EU in securing consumer rights and environmental protections, but there are clauses in the Bill that actively prevent Ministers from imposing any new regulatory burden, including any “administrative inconvenience”, on anyone.
Those clauses suggest very strongly that this is headed in one direction only, towards deregulation, and that that deregulation will make it easier to circumvent our legal obligations on food labelling for allergens, or not to pay holiday pay, or to roll back on the safe limits on working hours, or to change hard-won rights to parental leave. The Government will be aware of the fury that will follow should they move to weaken existing controls on polluting substances, or attempt to lower existing water or air quality standards, or dare to dilute the essential protections that defend our natural habitat and our wildlife.
Let me stress again: this is not a road that Scotland has chosen to go down. Rather, it is a road that Scotland is being dragged down. Our nation rejected this Tory Brexit fantasy, but our democratic wishes have been ignored at every turn. This is not of Scotland’s doing, but because of the constitutional straitjacket we find ourselves in, we are having this done to us by a Government that we did not elect.
The Minister cannot dismiss this as SNP scaremongering, because organisations as diverse as the Scottish Trades Union Congress, Food Standards Scotland and the Royal Society for the Protection of Birds have all warned about the adverse impact that the Bill will have. Frances O’Grady, Trades Union Congress general secretary, has described the Bill as “reckless” and said that
“vital protections could disappear overnight”.
The RSPB has warned that if the Government push ahead, they will be undermining the long-established and vital laws that are in place to protect nature. Food Standards Scotland said that the Bill poses
“a significant risk to Scotland’s ability to uphold high safety and food standards.”
Yet it seems that, in their desperate, deluded pursuit of the mirage of a Brexit Shangri-La, this Government are prepared to put at risk our natural environment, our food and animal welfare standards, consumer protections and workers’ rights. That is why the SNP will oppose the Bill every step of the way.
Not only are this Government coming for those rights and protections that we have enjoyed for decades, they are also coming for our Parliament. I repeat the call from the Scottish Government for the UK Government, even at this late stage, to perform one of their trademark—almost legendary—U-turns, and abandon this disastrous Bill. The Bill not only undermines the devolution settlement, it also diminishes the role of MPs here, with the plan to deal with everything via secondary legislation, conveniently avoiding the intense parliamentary scrutiny that the measures require. The Secretary of State claimed in his letter that this was about “taking back control”, but I have to ask: who is taking back control? It is not this Parliament.
As the Government have already gleefully announced to the press, the amount of parliamentary time required has been dramatically reduced. It seems that, for this Government, taking back control means putting a group of hand-picked party loyalists on to a delegated legislation Committee—a Committee with a built-in Government majority, which will be able to bulldoze through change after change after change, as instructed by the Government. The history of delegated legislation Committees is not particularly encouraging. In the past 65 years, only 17 statutory instruments have been voted down in DL committees. The last time that happened was in 1979. While there is certainly a role for DL Committees, I do not believe it extends to making wholesale and fundamental changes to vast swathes of the law on everything from environment and nature to consumer protection, workers’ rights, product safety and agriculture, just to help this Government avoid proper parliamentary scrutiny.
Of course, the reason the Government are avoiding scrutiny is because, in their fervour to rid themselves of any lingering European influence, the zealots at the heart of this collapsing Government have arbitrarily put a sunset clause of 31 December 2023 in the Bill. Unless 2,500 pieces of legislation are removed and replaced—unless the Government give themselves an extension, of course—they will simply disappear off the statute book, leaving huge holes in UK law. It is a tactic fraught with danger as it once again introduces another totally unnecessary Brexit cliff edge that will be welcomed by nobody outside the inner sanctum of the European Research Group—sorry, I mean the Cabinet. It is further evidence of the panic at the heart of the Brexit project. They know the wheels have come off and that the Government are disintegrating before their eyes. Thankfully, Scotland has a way out and we will, as soon as possible, rejoin the European Union as an independent nation. I sincerely hope that the rest of the United Kingdom will find its way back to the European Union as well.
I will conclude with a number of questions for the Minister. Will he confirm that, should the Scottish Government decide to preserve all retained EU law, that would be respected and upheld by the Government here in Westminster? Does he accept that, as it is currently written, the Bill threatens sweeping controls here in Westminster over areas that are wholly devolved? Can he explain why, despite issues raised over the summer by the Scottish Government, the Bill was published with powers to undermine devolution? What impact assessment has been carried out on how the Bill will affect the sectors of the economy that will be most affected by it, particularly farmers in remote, rural, economically fragile areas? Will the Government accept and honour the legislative consent motion from the Scottish Parliament? If they do not, why will they not?
Finally, does the Minister agree that by allowing the UK Government to act in policy areas that are wholly devolved, and to do so without the consent of Scottish Ministers or the Scottish Parliament, that is in direct contradiction to the 1998 devolution settlement and particularly the Sewel convention, which was given a statutory footing in 2016?
Patrick Grady (Glasgow North) (Ind)
It is a pleasure to serve under your chairmanship, Mrs Murray, and to welcome the Minister to his post. He will be missed from the Speaker’s Advisory Committee on Works of Art, which he has chaired so ably for the past few months or more. It is a pity he is not enjoying the solidarity of his colleagues from the Scottish Conservatives, who might have wanted to show an interest in this issue, stand up to defend the Government and extol the virtues of Brexit, which so few people in Scotland supported—but, apparently, there is no sign of them.
I congratulate my hon. Friend the Member for Argyll and Bute (Brendan O'Hara) on securing the debate. It is particularly important, given the chaos engulfing the Conservative Government and Westminster more generally right now, that we take this opportunity to shine a spotlight on an issue that might risk going under the radar. Perhaps that is what the Government—and particularly the Secretary of State—are hoping for: to dress it up as a relatively technocratic, legalistic reform of the statute book and hope that nobody pays too much attention.
However, as my hon. Friend the Member for Argyll and Bute has said, many stakeholders—not just those who might be dismissed as part of the anti-growth coalition, which now appears to include the President of the United States and the Chancellor—and a whole range of financial services are particularly concerned about the impact of so much regulation simply dropping off the statute book without any clear mechanism for its being replaced. As we have heard, it is not a technocratic, legalistic reform of the statute book. The Government’s proposals to reform retained EU law represent an Executive power grab on a colossal scale: a power grab from Parliament, from the devolved legislatures—particularly Scotland—and a complete mockery of the claims that Brexit was ever about the House of Commons taking back control of anything.
The concept of EU retained law was created by the European Union (Withdrawal) Act 2018. Members might recall that the vast majority of MPs from Scotland took quite a bit of exception to that Bill when it was progressing through the House. I looked back at Hansard and, although the Minister will not remember because he was not here at the time, the House was detained on multiple points of order on 12 June 2018, when the Government railroaded through amendments to the Bill that undermined the powers of the Scottish Parliament. The next day, my right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) led the majority of Scotland’s MPs out of the Chamber during Prime Minister’s Questions in protest at the power grab that had been enacted.
The precariousness of the Government’s position during the 2017-19 Parliament meant that they were forced to make certain concessions in passing the Act, including the establishment of the European Statutory Instruments Committee, which made a nod in the direction of enhanced parliamentary scrutiny. In reality, the EUWA itself represented a significant power grab, with the UK Government taking on powers over legislation that would otherwise have been subject to scrutiny across the EU institutions by our representatives in the European Parliament, and by this Parliament and the devolved legislatures. That is why the Act also enacted a significant undermining of the devolution settlement by reserving powers for Westminster that should otherwise have been devolved to Scotland and the other devolved institutions as the UK left the European Union.
Of course, as my hon. Friend the Member for Argyll and Bute said, Scotland never voted to leave the European Union in the first place. The blatant disregard shown by the UK Government of the differential in results across these islands, their unwillingness to compromise on issues such as membership of the single market, instead rushing headlong into the hardest of Brexits that nobody could have had evidence to vote for and did not represent what had been proposed by several of the Leave campaigns; all of that demonstrated a contempt for devolution and any notion of a respect agenda.
Now, having invented the concept of retained EU law, the UK Government want to abolish it. They want to introduce a concept of assimilated law, which to the “Star Trek” fans among us will probably have a particularly sinister overtone—the legislative distinctiveness will be added to our own, as the Borg queen may or may not say. They think that by introducing this concept they can erase the legacy of the UK’s time in the EU. Of course, it is not by some strange doublethink that they want to erase the legacy of EU membership: they literally want to sunset every provision accumulated over the past 50 years if it is not reviewed or retained by the end of next year. Never mind that we do not know who the Prime Minister will be at the end of next week, or that the House has sat for little more than four weeks since July; the Government seem to expect us to believe that they can effectively and efficiently revise and update this entire corpus of law in less than 12 months.
They do not pretend that there will be much of a role for this House. As my hon. Friend the Member for Argyll and Bute said, they want to create massive powers to railroad through statutory instruments and other secondary legislation, or let retained EU regulations drop off of the statute book completely. Never mind if they provide fundamental protection for workers’ rights, food standards or the natural environment across all of these islands; the arbitrary deadline from the Secretary of State cannot be met, so off they will go, without any consideration of the consequences for businesses or organisations that are trying to operate or trade in a legislative vacuum. The Secretary of State was previously the Minister for Government efficiency, but this is not efficiency: this is ideology.
That brings us to the specific impact on Scotland and the other devolved administrations. The Northern Ireland Assembly is barely functioning, so it has practically no path of resistance or opposition to this. Sensible voices are already calling for the expansion of the capacity and powers of Senedd Cymru, but the Tories seem determined to stand in the way. That leaves Scotland; because Scotland already has the greatest degree of devolution on these islands, it faces the biggest power grab of all from the Retained EU Law (Revocation and Reform) Bill. As my hon. Friend the Member for Argyll and Bute said, the UK Government asserted primacy over a whole suite of policy areas that were previously understood to be devolved. All of the concerns about the capacity and time available for scrutiny in this place apply equally to Scotland’s Parliament. The Scottish Government already have their work cut out trying to mitigate the most devastating impacts of Tory economic and social policies in Scotland, and now they need to find time and space to deal with everything coming down or coming up the road in this Bill.
The Scottish Government have committed to remaining aligned with European Union regulation wherever possible. Alignment makes trade in goods and services easier and more beneficial for all. It will also make the process of Scotland rejoining the European Union as an independent country much more straightforward. Perhaps it is not surprising that the UK Government want to ensure that as much of the UK as possible diverges as much as possible from the EU acquis as quickly as possible.
Surely the whole point of Brexit freedom, if that is what the Government think this is, should be to identify naturally and organically where reform of retained law was needed, through the usual processes of engagement with our constituents, consultation with stakeholders and the small matter of political debate and deliberation in Parliament. Instead, what we see exposed is the ideological determination of this Government to erase the UK’s membership of the EU from history, irrespective of the outcomes.
We heard from my hon. Friend the Member for Argyll and Bute that the Second Reading of the Bill might take place as early as next week. Will the Minister tell us whether it is the Government’s intention to commit that Bill to a Public Bill Committee for scrutiny, or whether, like the European Union (Withdrawal) Act 2018, it will be committed to the whole House for scrutiny? That Act received eight days of scrutiny in a Committee of the whole House and two days on Report, because the Government recognised its constitutional significance.
If this Bill is as significant as the Government try to claim, it should be subject to the scrutiny of the whole House through all its stages. In reality, I do not think that is what the Government are interested in. The explanatory notes are always a riveting read, and I pay tribute to the civil servants who pull them together for the benefit of those of us trying to get our head round the legislation. The explanatory notes say it all. Paragraph 28 says:
“There is no definitive list of general principles recognised in the Court of Justice of the European Union case law, but examples include the protection of fundamental rights, and the equality principle.”
Paragraph 30 says:
“This Bill abolishes these general principles in UK law by the end of 2023, so that they no longer influence the interpretation of legislation on the UK statute book.”
That is the abolition of fundamental rights and the abolition of the equality principle. Brexit really does mean Brexit after all.
Among the Westminster chaos, the people of Scotland can see what is happening and want no part of it. Their chance for a different kind of repeal Bill—repeal of the Act of Union 1707—is coming very soon indeed.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship, Mrs Murray. I congratulate my hon. Friend the Member for Argyll and Bute (Brendan O'Hara) on introducing the debate. It is incredible, in an hour-and-half debate on such an important subject, that I am standing to sum up less than half an hour after it began. That shows a lack of care from many Conservatives, particularly the Scottish Tories.
As my hon. Friend the Member for Glasgow North (Patrick Grady) said, where are the Scottish Tories? They continually challenge the SNP when we talk about power grabs by the Westminster Government. They always ask us to name one power that has been taken away from the Scottish Parliament. As we have heard, this abolition of EU retained law is not a single power grab, it is a carte blanche undoing of devolution. It allows the UK Government to force standards in Scotland. When trade deals are signed and Westminster wants to diverge from the EU, the Internal Market Bill, for example, can be used to railroad and force those standards on Scotland. It is disgraceful that the Scottish Tories are not here to make a case for the Government and why they want to do this.
It could be argued that Scotland did not technically have full powers in all these remits because it was EU law, but the point of EU law in regulations is that it was agreed by member states. Scotland will no longer have the facility to keep EU retained law and that alignment, if the Westminster Government have their say. We have to remember that the EU single market is the biggest single market in the world. Why do the UK Government want to diverge from standards that allow access to the biggest market in the world? It makes no sense, but again it is a throwback to the British empire and bringing back British sovereignty. It is a falsehood—a fallacy.
We previously heard from Brexiteers that the good thing about being able to diverge from the EU is that we can improve environmental standards. I spoke last week in a debate about sewage discharges into watercourses and on beaches. Before coming to this place, I was a sewerage civil engineer, and I saw at first hand how the Tory Government back then resisted EU legislation to clean up beaches. The UK was known as the dirty man of Europe, and it is no surprise that, now that we have left the EU, the rest of the UK is having a problem with sewage discharges. It cannot be a coincidence. Given that you represent a coastal community, Mrs Murray, you must have concerns about water quality and the sewage discharges that this Government seem to be allowing.
Another Brexit falsehood is the so-called sea of opportunity. Fishing communities were told that they were going to benefit from Brexit, but unfortunately they were sold a pup, to mix my metaphors. That again is proof that whatever the Brexiteers promise never comes to fruition—they are just false promises.
As my hon. Friend the Member for Argyll and Bute pointed out, it is ridiculous that we are looking at overturning almost 2,500 pieces of legislation by some false 2023 deadline when we do not even have a functioning Government. That process is retained under the control of the Secretary of State. Previously, he was all about parliamentary sovereignty and scrutiny, but that seems to have gone out the window now that he is a member of the Cabinet. We only have to look at the Henry VIII powers inserted into the Energy Prices Bill on Monday to see that the Government are taking back control on one level—they are taking back control from MPs in the House of Commons. I have grave concerns about that.
As my hon. Friend said, this is about food standards and animal welfare. It is about maintaining standards and having checks in place. Another Brexit dividend is that we do not have enough vets because we have ended freedom of movement—it is ridiculous, and it just shows Brexiteers’ blinkeredness. As my hon. Friend said, this is an existential threat to Scottish agriculture. It is actually an existential threat to the devolution settlement.
On deregulation, I mentioned workers’ rights, and Frances O’Grady of the TUC has highlighted concerns about that. In his speech on the ten-minute rule Bill yesterday, the hon. Member for Christchurch (Sir Christopher Chope) attacked workers’ rights and said that the EU working time directive has allowed idleness. That is the attitude. I am sure you have read “Britannia Unchained”, Mrs Murray, which was co-authored by the Prime Minister, who attacked British workers for being lazy, idle and unproductive. That is the attitude at the top of the Government, so what hope do we have when EU retained law is completely abolished?
That brings me to the official Opposition. Of course, Labour has promised to make Brexit work. It is also in favour of a hard Brexit. It does not want freedom of movement or to be in the single market, so what does it stand for when it comes to EU retained law? What is Labour’s vision for the future? It seems to me that it mirrors the Tory vision.
My hon. Friend the Member for Glasgow North rightly pointed out that the European Union (Withdrawal) Act 2018 was forced on Scotland, but at the time we were reassured that the idea of retained EU law was somehow going to give us some continuity. It was going to give us protections, and it was shown that we were not going to diverge from the EU. Now the Government’s motives are absolutely clear: that was just another Brexit falsehood, and it is all about divergence and free market opportunities. Who cares about standards as long as it is a free market and prices come down? That is all they care about, not protecting workers’ rights, agriculture and food standards and hygiene.
Another silly example of this Government’s obsession with divergence from the EU is the weights and measures consultation. Why would we want to go back to imperial weights and measures? Scotland exports more manufactured goods to the rest of the world than to England, and weights and measures are important in that. Alignment with metric measurements is the way we do things. Why would we want to change? Last week, an article in New Civil Engineer magazine noted that using thumb measurements or inches might have been fine for a 16th-century carpenter, but today we have alignment with the biggest single market. Even the United States, despite being one of the few countries that still uses imperial measurements, aligns measurements for its exported goods with the metric system. Why would we want to go back on that? How much money would it cost to rip up what we do now? Again, it just shows the Brexit fantasy and falsehoods.
Ian Murray (Edinburgh South) (Lab)
I am grateful to the hon. Gentleman for giving way and for raising this, because it is a fallacy that people would want to go back to those kinds of measurements. What the Business Secretary is trying to claim about going back to those measurements is just farcical. Could we perhaps talk about this matter in the bar tonight over 568 ml of beer?
Alan Brown
The hon. Gentleman is being slightly flippant, but he makes a good point. That is the thing: the EU did not force the UK to go metric. It was done willingly. The EU allowed pints and other things to be retained as measurements because it was not about the EU imposing its will, but about a sensible way forward over alignment. Of course, it is a rare thing for me to enjoy a 568 ml drink—or a pint—but I might come back and do that at some point.
I look forward to the hon. Gentleman, who is the shadow Secretary of State for Scotland, telling us about Labour’s vision for making Brexit work, and why it will not align with the EU, why it does not want to rejoin the single market and why it does not want freedom of movement. I shall conclude there, because I really do want to hear from him and from the new Minister, whom I welcome to his place. Who knows how long he will be in his post, given the current chaos? I hope he will address these serious points and explain this Government’s rationale.
Ian Murray (Edinburgh South) (Lab)
It is a great pleasure to serve with you in the Chair for the first time, Mrs Murray. I congratulate the hon. Member for Argyll and Bute (Brendan O’Hara) on bringing this debate. We never know during these debates which Minister will actually turn up, because we are never quite sure who the Minister is. We are always online trying to search the departmental webpages, if they are ever updated properly, to find out who the Ministers are. I welcome the Minister present to his place.
It is very strange that no Scottish Conservative MPs are here to take part in this important debate, but maybe this is a vision of the future after the next general election, where there will be no Scottish Conservative MPs available to be here. I am very disappointed that it was not put on record earlier that the entire contribution of the Scottish Labour party is here participating in this debate, unlike the SNP—only a small fraction of that entire party is present. I think Labour wins that particular battle.
I want to say a few words about this particular debate, which is similar to a debate we had in this Chamber a few weeks ago on the devolution to Scotland of employment law. The hon. Member for Argyll and Bute can correct me if I am wrong, but I think that this matter boils down to two things: one is an ideological attack on the rights and protections we have all enjoyed, whether in or out of the EU; the other is the Conservative Government who are putting these changes through. My contention in the previous debate was that this matter is not about two Parliaments up against each other, but about a UK Conservative Government making decisions that we find to be deplorable and not in line with what we would like to see. Perhaps a change of Government would make these things an awful lot easier to achieve.
Brendan O'Hara
Does the hon. Member agree with my substantive point that this is actually a power grab from this place against the Scottish Parliament? It is a power grab that gives primacy in law to what happens in Westminster, as opposed to areas that have hitherto been wholly devolved.
Ian Murray
The powers argument is a consequence of what the UK Government are trying to do. They want to get rid of all this EU law and this is the way they want to do it, so it is an ideologically driven piece of legislation and policy. The consequences of that are all the consequences he laid out in his speech.
There is one thing I want to say about power grabs. We have an argument—whether it be in the United Kingdom Internal Market Act 2020, which is now on the statute book, or in this debate—where the Minister stands up and says, “This is a powers bonanza” and the SNP says, “It is a power grab”. It is probably neither, and it will depend on the decisions made by both Governments about what will happen, which is driven by the desire of the Scottish people. In the past few polls, nearly 70% of Scottish people want both Governments to work together. It surprises me that when the Scottish Government were talking about a power grab in the Internal Market Act, they were hiring all these new civil servants to deal with the new powers that were about to arrive. Of the 157 powers that have been repatriated from the European Union, 130 or 135 of them currently sit with the Scottish Government. These bland statements about power grabs and power bonanzas are rather unfortunate and are probably not of any use to the debate.
I agree with the hon. Member about the consequences that could happen if decisions in Westminster are made in line with how we think they will be made. We only have to look at our inboxes over the past few weeks to see the emails from all the nature organisations, such as the RSPB, as the hon. Member mentioned, Greenpeace and others, which were apoplectic at the possible consequences for protections from this attack on nature across the whole of the UK. The Minister has to tell us the driving force behind this. I think the Minister or the Secretary of State said that the reason for this piece of legislation is that if it was not in place removing or amended outdated EU laws could take several years. I ask the Minister to give us an example—if we did not have this Bill—of a piece of EU law that would take several years to repeal. I bet he cannot give us one because it is just another line from the Secretary of State’s speech that makes no reference to the reality of the situation.
The key point is that we were all told at the Brexit referendum that EU law would be repatriated to the EU, but it would be the minimum standard and it would be built on. We seem to have a bonfire of regulation and a clumsy drive from this Govt and the previous two Conservative Governments since the EU referendum to rip up regulations and turn the UK into the Singapore of Europe. Rather than working in the national interest, it is always about what is in the party’s interests.
Hon. Members have asked some questions. The hon. Member for Glasgow North (Patrick Grady) rightly talked about the impact on devolution. All these things have an impact on devolution. Asymmetric devolution across the United Kingdom gives us these kinds of issues, and it is driven by a Government that wishes to create them. We have a situation where the UK Government and the Scottish Government want to rip up the devolution settlement. That is just a fact. Whether the Government realise it, every time they bring a piece of retained EU legislation to this House, they just give succour to the nationalists who wish to rip up the devolution settlement to deliver independence.
While we have just had a huge discussion about this Conservative Government wrenching the UK out of the European Union with a hard Brexit, we have the hard Scexiteers here, who want to do exactly the same. [Interruption.] They like that, don’t they? They are hard Scexiteers who wish to do exactly the same, and it is not my words: it is the words of the economic paper that the First Minister launched on Monday. There would be a hard border between Scotland and England for goods, services and probably people. They want to seamlessly rejoin the EU with a 12% deficit, using someone else’s currency with no central bank as a lender of last resort with no money. The paper itself has been trashed by the Institute for Fiscal Studies. It was trashed by Robert McAlpine, who is a massive supporter of independence, who asks, “How do we get out of this crazy mess?” While we have a discussion about hard Brexiteers, we have three hard Scexiteers here—I will give way to one of them.
Alan Brown
I am trying not to bite here, but I will go back to the question I posed. The hon. Member mentioned a hard Brexit and said it is what the Tories are doing. Is it not the case that Labour favours a hard Brexit? The hon. Member has not mentioned why Labour is against re-joining the single market, nor defended why Labour is against freedom of movement. Does the hon. Member agree with the shadow Chancellor who thinks that the UK needs to process and deport people back to their countries more quickly? That seems to be the Labour view, and it is no different from the Government.
Ian Murray
That is more fantasy from the SNP. I find it strange that, when we have a Government on their knees bringing forward a piece of legislation that ultimately could undermine devolution, the main part of the hon. Member’s speech was an attack on the Labour party. That maybe tells us that our ascendancy in Scotland is worrying the SNP.
Let me say what would have happened. The hon. Member calls the Labour party hard Brexiteers; had the SNP not abstained on the amendment for the customs union it would have passed in Parliament—a matter of public record. The SNP spent less on the EU referendum than it did on the Shetland Scottish parliamentary byelection—to win 3,400 votes. The SNP asks about where we are as a country at the moment. It is perfectly practical for the Labour party, who wish to be the next Government, to try and make Brexit work. The first day that my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) walks into No. 10 as the Prime Minister, he is going to face the circumstances of the day, not those that we may wish to find. The first task will be to make what we have got work, the second task will be to build and deepen that relationship with Europe, and the third task, which overarches all of that, is to do what is in the national interest. That is clear.
That shadow Chancellor was actually saying that part of the problem we have in this country with the immigration system is the Home Office not processing applications for asylum quickly enough, which leaves the massive backlog of tens of thousands that we have at the moment. If hon. Members had listened to what she actually said, that is what she was referring to—which I think is SNP policy? If the Home Office was processing applications in a timely manner, and in a humane way, we could get through applications much quicker, lessening those issues.
Where was I with the hard Scexiteers? I think we had gone through that. I will get on to some of the issues raised about what the Retained EU Law (Revocation and Reform) Bill will do. I hope the Minister will tell us what the Government’s plans are, because this is essentially a theoretical Bill about trashing, amending, or otherwise, EU retained law in this country. The Government always have those grand phrases, but they do not tell us what they are going to do. Can the Minister answer my first question: what would take several years if it was not in the Bill? Will the Minister give us an example about what he wishes to do with some of those regulations? I would be happy to listen to that.
The Labour party wants to use that platform to put in a new deal for working people. That is a prime policy example. That would give people workers’ rights from day one and it would build on EU regulations that we have already had. Incidentally, the UK has always gold-plated EU regulations. In fact, Conservative Governments have always gold-plated EU regulations. The Labour party would end fire and rehire and zero-hour contracts—is that part of the Government’s strategy? We would make work more family friendly and flexible. We would strengthen trade union rights, which would raise pay and conditions. We would roll out fair pay agreements, and we would use Government procurement to ensure that we could lift standards, pay, conditions and skills right across the country.
Our new deal for working people is a practical example of what we would do with regulations, rather than a Bill that says we will rip up every piece of EU regulation without saying what we would do instead, while, at the same time, undermining devolution.
I will ask one final, two-part question to the Minister. What discussions is he having with the devolved Administrations about the Bill, and about trying to achieve a consensus so that legislative consent motions can be passed? The Sewel convention—which was right—was put on a statutory footing under the Scotland Act 2016 by an amendment brought forward by the Labour party. We cannot just disregard that; the Sewel convention is clear that the UK Government will not legislate in devolved areas where they do not need to. If they do, a legislative consent motion must be positively passed by the Scottish Parliament—not the Scottish Government. What discussions is he having to make sure those legislative consent motions can come forward?
I am grateful that the debate has been brought forward, and that we have had the hard Scexiteers and hard Brexiteers arguing over the EU. However, yet again we have had a combined 37 minutes from three SNP Members, and they have not told us one iota about how they can get back into the European Union with the huge deficits they have, no currency, no central bank, no lender of last resort and no immigration policy—[Interruption.] Now they are claiming that I am slagging them off, but they spent a lot of their speeches slagging off the Labour party. I look forward to the Minister answering some questions, and maybe at some point in the future we will get some answers from the SNP as well.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Dean Russell)
It is an absolute pleasure to serve under your chairmanship, Mrs Murray. I have to say, I have quite enjoyed this debate. I will respond to as many of the questions as possible. Given the fact that the Leader of the Opposition is likely to push to form a coalition with the SNP, I do not quite know how the divide that has been so clearly created today will be filled.
I congratulate the hon. Member for Argyll and Bute (Brendan O’Hara) on securing this important debate. I am grateful to him for the opportunity to debate this very important topic ahead of the Second Reading of the Retained EU Law (Revocation and Reform) Bill. I look forward to continuing discourse with him, his SNP colleagues and others during the passage of the Bill. I intend to cover as many of the points raised by the hon. Members for Glasgow North (Patrick Grady), for Kilmarnock and Loudoun (Alan Brown), for Strangford (Jim Shannon) and for Edinburgh South (Ian Murray) as possible.
I will start with a clear message: the Government are absolutely committed to the devolution settlements and to safeguarding the Union. It is our mission to deliver economic prosperity for every citizen in every part of the UK. As my colleagues are undoubtedly aware, the Government are committed to devolution and to working collaboratively and constructively with the devolved Governments. That is the way to deliver better outcomes for citizens across the UK. The people of Scotland rightly expect both the UK and Scottish Governments to work together and focus on the issues that really matter to them.
We have the backdrop of the war in Ukraine and global economic slowdown, which has created incredible challenges for the UK—for Scottish, English, Welsh and Northern Irish citizens. The Government are committed to working towards economic and legislative solutions that work for the whole of the UK. Accordingly, the Government remain fully committed to the Sewel convention and the associated practices for seeking consent for the devolved legislatures.
Retained EU law, the subject of today’s debate, was brought on to the statute book as a bridging measure to ensure continuity as we left the European Union. It was never intended to sit on the statue book indefinitely. Its existence has created legislative anomalies that we must now address. On 31 January, the Government announced plans to bring forward the Retained EU Law (Revocation and Reform) Bill. It is a culmination of the Government’s journey to untangle ourselves from nearly 50 years of EU membership, and it will provide the tools for the Government to fully realise the benefits of Brexit. We realise that those benefits for citizens are paramount, especially for businesses across all four great nations of the UK.
Alan Brown
Can the Minister actually explain the brilliant benefits of untangling the UK from EU legislation? What are those benefits?
Dean Russell
I thank the hon. Member for asking that very clear question. There are many benefits. In fact, on the EU dashboard there are over 2,500 pieces of legislation that we can start to look at. The key point of this Bill is to create a framework to enable us to look forward at how we can get the best out of Brexit. It will affect every citizen across the UK, and the Bill will make sure that we are covering that. I will come to points raised earlier, if I may.
Alan Brown
I thank the Minister for giving way again; I appreciate it. Please will he name one EU law that will be abolished that will benefit the lives of my constituents in Kilmarnock and Loudoun?
Dean Russell
I thank the hon. Member for that question. The key point about the Bill today is to talk about the framework, and what we are trying to ensure is that as the framework goes through, we will then be able to look at the individual pieces of regulation and legislation—all of those pieces that will then be looked at.
There are many, many, many, but I will not be drawn on the specifics today, because it is, of course, important that the conversation happens for the UK Government, the Scottish Government, the Welsh Government and the Northern Ireland Government, to make sure that we are getting the right output from this, and it would be wrong of me to pre-empt that. However, I am sure that within the coming weeks and months we will have lots of conversations, and I am sure that the hon. Gentleman will himself be listening to many of them in the coming years.
Dean Russell
Thank you.
The Bill will abolish the constitutional and outdated special status that retained EU law currently has on our statute book by 31 December 2023. It will empower the UK and devolved Governments to amend, repeal and replace their retained EU law more quickly. It will also include a sunset date by which all remaining retained EU law will either be repealed or, if a decision is made to keep it, stripped of interpretive provisions associated with retained EU law, and assimilated. I noted the comment of the hon. Member for Glasgow North, being a fellow “Star Trek” fan; although I disagree with his analogy, I understood the concept of the Borg, which probably has not been mentioned in Parliament very often. The key point is that any retained EU law that we keep will be assimilated into domestic law.
The Bill will enable the Government and, where appropriate, the devolved Governments to take back control of the UK statute book. The powers in the Bill will enable swift reform of the laws—more than 2,500 in total—derived from the UK’s membership of the EU. Many of those laws are outdated; some are even inoperable or not fit for the UK’s economic circumstances. That is why reform is needed.
Without the Bill, there is a risk that retained EU law becomes an immutable category of law on the statute book. The European Union (Withdrawal) Act 2018 preserved EU laws as if they had effect in domestic law immediately before the end of the transition period following the UK’s withdrawal from the EU. It is manifestly sensible that we all have the power to repeal or reform those laws and that we do so without delay.
Patrick Grady
Surely the point is that if this Parliament has regained sovereignty, in the way that the Brexiteers claimed it has, it has that power and can do it on a case-by-case, piece-by-piece basis, as people come forward with allegedly sensible improvements to the retained EU law. Having the end of next year as a sunset clause is just completely arbitrary; it is not necessary. The whole point of the Brexit case, as I understood it, was that this Parliament could take its time and assert its sovereignty, and change these hangover regulations as and when it saw fit, and not with an arbitrary sunset clause.
Dean Russell
I thank the hon. Member for his comments, but no—we need to make sure that there is certainty on this issue. Having that date is absolutely essential to make sure that we are working towards it and ensuring that there is commonality in the way we work across these regulations and laws. Ultimately, however, this is what the British people—people across the United Kingdom—voted for. I appreciate that saying that may open up a whole load of new interventions, so I will hesitate to go down that rabbit hole.
This Bill will provide both the UK Government and the devolved Governments with the powers to amend, repeal and replace these laws more quickly and more easily than before. It will enable the devolved Governments to establish a more nimble, innovative and UK-specific regulatory approach, in order to go further and faster to seize the opportunities of Brexit.
The hon. Member for Argyll and Bute mentioned devolved Governments quite a few times and I understand the reasons for that. I just want to make it absolutely clear, and I will reiterate this because it is so important, that the decisions for those in devolved Governments to make—the choice to preserve, amend or repeal retained EU law in their areas—are theirs to make. I will come on to this again a bit later in my comments.
The measures in the Bill are UK-wide. This will ensure that citizens and businesses across all four nations of the UK are able to realise the benefits of Brexit. Nothing in our proposed legislation affects the devolution settlements. The proposed legislation will not restrict the competence of either the devolved legislatures or the devolved Governments. In fact, the powers in the Bill will give the devolved Governments greater flexibility to decide how they should regulate those areas that are currently governed by retained EU law in the future.
Ian Murray
Perhaps the hon. Member for Argyll and Bute (Brendan O'Hara) wants to make the same point. The Minister is refusing to give us examples, so let us give him an example and he can tell us whether it would be allowable. Say food regulations were reduced and chlorinated chicken in this country was allowed. What would stop a Scottish supermarket selling chlorinated chicken even if the Scottish Government, under those rules, would not allow that to happen in terms of their food safety responsibilities under devolution?
Dean Russell
I shall assume that the hon. Member for Argyll and Bute wanted to make the same point. To be absolutely clear, the premise of the Bill is to enable the conversations to happen among the UK Government and the devolved Governments and to enable us to look at the best way to ensure that we have very high standards in our approach around a whole load of areas. It is not about trying to reduce the quality of food or any of those things. The UK has always had very high standards. I will come to that later in my speech.
Dean Russell
I want to make progress if I may, because I will come to those points—
Dean Russell
Okay, I will take an intervention, but I am going to come to those points later.
Brendan O'Hara
The Minister has failed to answer the question, which is very specific. He talks about conversations being had, but this is not about conversations. It is about where decision making and power lie. If the Scottish Parliament decided that chlorinated chicken was banned, but the UK Parliament decided that chlorinated chicken was okay, what would stop chlorinated chicken appearing on supermarket shelves in Scotland? That is a very specific question.
Dean Russell
I take the intervention. The key point here is that this is about the Bill, and the conversations between the UK Government, through devolution, with the Scottish Government and others are yet to be had. We have to have those conversations, and the Bill will enable them to be had and to look at how we put those regulations in place. The idea that the UK is somehow going to start to reduce quality with respect to food or any other area is a rehash of old, proven-to-be-untrue Brexit arguments, and it is not the case here. I am going to make progress and I will come to some of those points later.
The majority of the powers in the Bill will be conferred on the devolved Governments. Conferring those powers will provide the devolved Governments with the tools to reform retained EU law in areas of devolved competence. That will enable the Scottish Government to make active decisions about the retained EU law that is within their devolved competence, for the benefit of citizens and businesses throughout Scotland. When using the powers of the Bill, the Government will use the appropriate mechanisms, such as the common frameworks, to engage with the devolved Governments. That will enable us to take account of wider context and allow for joined-up decision making across the UK.
The Government believe that a sunset provision is the quickest and most effective way to remove or amend all retained EU law on the UK statute book. That will incentivise genuine reform of retained EU law. The reform is needed, and it will help to drive economic growth. It will also enable us to capitalise on the rich vein of opportunity afforded to us via Brexit.
The sunset provision will of course not include Acts of Parliament, or indeed Acts of the devolved legislatures. It is right that an Act that has received proper parliamentary scrutiny should be the highest law of the land. Most retained EU law, however, sits on our statute book as a constitutional anomaly—somewhere between primary legislation and secondary, neither here nor there. It never received proper parliamentary scrutiny, and unless we actively want it, it ought to be removed.
The power to preserve specified pieces of retained EU law will also be conferred on the devolved Governments. That will enable the Scottish Government to decide which retained EU law they wish to preserve and assimilate, and which they wish to allow to sunset within their devolved competence.
Brendan O'Hara
Time is pressing, so I appreciate the Minister giving way. Given what he has just said, will he confirm now that should the Scottish Government decide to preserve all retained EU law, that would be respected and upheld by the Government here at Westminster?
Dean Russell
I will come to that later, so the hon. Gentleman will get his answer. Ultimately, we are saying that where there is devolved competence and where there is engagement on that, absolutely we will work together on it.
I want to assure the House that the Government are committed to ensuring that the Bill works for all parts of the UK. We have carefully considered how it will impact each of the four nations, in close discussion with the devolved Governments, and it is of paramount importance that our legislatures function in a way that makes certain that we can continue to work together as one.
The Government recognise the importance of ensuring that the Bill is consistent with the devolved arrangements, and we remain committed to respecting the devolution settlements and the Sewel convention. Indeed, the Business Secretary has made that commitment clear in his engagement with Scotland’s Cabinet Secretary for the Constitution, External Affairs and Culture, Angus Robertson. The Government have sought legislative consent from the devolved legislatures for the provisions in the Bill that engage the legislative consent motion process. Both I and the Business Secretary look forward to engaging with the devolved Governments on the process of seeking legislative consent as the Bill progresses through Parliament. Alongside that, the Business Secretary and I remain committed to engaging with our devolved counterparts as the Bill moves through. We will work together to address any concerns and ensure that the Bill works for all parts of the UK.
The hon. Member for Argyll and Bute asked about devolved settlements. We are not changing the constitutional settlement. The Scottish Government will still have control of areas within devolved competence, including food standards. On workers’ rights, the UK has one of the best records on workers’ rights—those high standards were never dependent on the EU—and we intend to continue them. Environmental protections will not be weakened. We want to ensure that environmental law is fit for purpose and able to drive improved environmental outcomes.
Ian Murray
The Minister has been hugely generous in taking interventions—he is a friendly Minister—but he is not quite answering the questions. He is pretending to answer the questions, but is not quite doing so. Let me give him a practical example. Before 31 December 2023, the EU law on food standards is revoked. The UK Government decide that chlorinated chicken is allowed into our food system in this country—currently, under EU retained law, it is not—and the Scottish Government, under their food standards devolved powers, decide that they will not allow that to happen. What happens? Do we end up with chlorinated chicken in Scotland? Or, with the Scottish Parliament having made that decision, will there be no chlorinated chicken on the shelves of Scottish supermarkets?
Dean Russell
To be clear, as I understand it, the preservation will be respected. If the Scottish Government want to preserve legislation within their competency, the UK will respect it. I think there is clarity on that. I am happy to write to hon. Members to confirm in more detail, but that is my understanding of the Bill. The premise at the moment is that we have to make sure that we get the Bill through to enable those activities to happen—to enable the work between the Governments and to deliver on those benefits for our citizens and businesses.
On food standards, the Government made a clear manifesto commitment that, in all trade negotiations, we will not compromise on our high environmental protection, animal welfare and food standards. In any case, that is always going to be a high bar that we will deliver on.
The hon. Member for Argyll and Bute asked about impact assessments. There will be an impact assessment of the measures in the Bill during the passage of the Bill. The Bill is an enabling Bill. Further work will be done by Departments, while reviewing specific rules. That is why I am not getting drawn into specifics, because this is the framework for those conversations to be had and those conversations will then have impact assessments aligned to them.
The hon. Member for Kilmarnock and Loudoun made some comments about sewage. I want to be clear: we will not weaken protections. The UK is a world leader in environmental protections and we are committed to delivering our legally binding targets to halt nature’s decline by 2030. The Government have a clear environmental and climate goals set out in the 25-year environment plan and the net zero strategy. Any changes to environmental regulation will need to support the goals. This whole nonsense is repeatedly put out—that somehow we have voted as a Government to put more sewage in waterways. We have put more protections in place to stop it happening and we are the first Government to do that in decades. We have to be really clear in the accuracy of the language we use in Parliament. We have not voted to do that; we have actually improved measures around the environment.
The hon. Member for Glasgow North—I consider him a friend and would address him as my honourable friend—asked about the Public Bill Committee. I cannot say at the moment whether there will be a PBC or not. I am sure that will be decided in a matter of weeks.
For me, this is about ensuring that we help growth and that businesses can focus on doing business and not filling out forms. Ultimately, we need to ensure that individuals across the country know where they stand and that when they vote for their parliamentarian—their MP—they know that they have the right to change the rules and the law and do not have to wait for unelected bureaucrats elsewhere to do so.
The Bill is an essential piece of legislation. It will enable all four nations of the UK to capitalise on the regulatory autonomy offered by our departure from the EU and fully realise the opportunities of Brexit. I hope that I have been able to demonstrate in this debate that the Government are committed to devolution and working collaboratively and constructively with the devolved Governments. We need to make sure we are moving on and that the UK has the ability to make the laws that we were elected to do. We have an opportunity collectively to seize the opportunities of Brexit and cement ourselves as a leader in the global world.
Brendan O'Hara
I thank everyone who has taken part this morning. What we lacked in numbers we certainly made up for in quality. I thank the hon. Members for Strangford (Jim Shannon) and for Glasgow North (Patrick Grady), my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown), and even the hon. Member for Edinburgh South (Ian Murray), who, despite his best efforts to go on a fishing expedition very early on this Tuesday morning, will have noticed that I and my colleagues are far too long in the tooth to bite, particularly this early in the morning.
I thank the Minister for what he said. I am delighted that he confirmed that, should the Scottish Government decide to preserve all retained EU law, that would be respected and upheld by the Government here in Westminster. But nothing that he has said has altered the fact that on the rights and protections—
Dean Russell
I just want to be clear on the wording that the hon. Member used. I said that if the Scottish Government want to preserve all areas within their competency, the UK Government will respect that. I want to be clear that that is what was being repeated back.
Brendan O'Hara
Okay—as we dance on the head of a pin this early in the morning. What it does not change is the fact that our rights and protections that we have enjoyed for 40-odd years in the areas of food standards, animal welfare and environmental protections are under threat. As my hon. Friend the Member for Kilmarnock and Loudoun says, why would the Government legislate to ensure that we cannot get access to the biggest market in the world sitting on our doorstep? Nothing the Minister has said changes my position that they are coming for our Parliament. The sooner we are out of this Union and rejoin the European Union, the better.
Question put and agreed to.
Resolved,
That this House has considered the impact of retained EU law on the Scottish devolution settlement.
Off-grid Homes: Energy Support
(2 years, 1 month ago)
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Mrs Sheryll Murray (in the Chair)
I will call Fay Jones to move the motion and then I will call the Minister to respond. There will not be an opportunity for the Member in charge to wind up the debate, as is the convention in 30-minute debates. I can see that a lot of Members want to make interventions, but I ask them to keep them snappy to be fair to the Member leading the debate.
Fay Jones (Brecon and Radnorshire) (Con)
I beg to move,
That this House has considered energy support for off-grid homes.
It is lovely to see you in the Chair, Mrs Murray. I am delighted to see the Minister here; I welcome him to his place. He and I have a history of working together; the last time we did a double act was in moving the Loyal Address back in May. There are many Members present, and I intend to be as generous as possible in taking interventions, as I want the Minister to be fully aware of the strength of feeling on this issue. It is evident that this subject has cross-party support.
As a country, we have faced a multitude of challenges over the past few years. Although we often faced bleak forecasts, the Government have done well to steer us through the obstacles, and the global energy crisis is no different a challenge. Russia’s aggressive and brutal invasion of Ukraine shocks us with its barbarity, and it has had very real impacts on our energy markets. As we and others adjust and rightly manoeuvre away from dependence on Russian energy, we must overcome the logistical challenges in our way.
We are fortunate in this country that our dependence on Russian gas was minimal. However, global supply disruptions, high energy prices, geopolitical turmoil and an as yet unrealised transition away from carbon-intensive energy sources are causing real concerns for my constituents and many others across the United Kingdom.
Jim Shannon (Strangford) (DUP)
The fact that so many Members are here is an indication of how important the issue is. The hon. Lady asked me before whether this issue will affect Northern Ireland—of course it will. Some 68% of people in Northern Ireland are oil-dependent. I live in a rural constituency, and on its outskirts, “off grid” refers to those who depend on coal. I appreciate that the Government have taken massive steps to help, but does the hon. Lady think that they need to monitor the situation over the next few months to ensure that the people who need help most get it?
Claire Hanna (Belfast South) (SDLP)
I thank the hon. Lady for bringing this important issue to the House. As the hon. Member for Strangford (Jim Shannon) said, two thirds of Northern Irish homes are on oil, and half of the remaining third use keypad meters. My Assembly colleagues have brought forward a proposal to issue a voucher, consistent with the support we are giving to gas customers and based on the Northern Ireland high street voucher scheme, which we used last year. Is the hon. Lady aware of any modelling being done to allow the Government to issue support directly to households that they can use with oil suppliers in their area?
Fay Jones
As I say, we discussed this in great depth on the Northern Ireland Affairs Committee, and I hope we continue to do so. I am not aware of any modelling, but I am keen for the Government to explore all options to see how this can be rectified. All hon. Members are keen to ensure parity.
There is a feeling of unfairness among the many rural households across the country that we collectively represent.
Richard Foord (Tiverton and Honiton) (LD)
It is vital that those who live off grid, of whom there are 12,000 in my part of the west country, get additional support to reflect their increased vulnerability to price rises. That includes those who use heating oil, those who live in park homes and those who use solid fuels. The £100 offered by the Government simply does not come close to the scale of price increases we have seen, but I am concerned about the speed—
Mrs Sheryll Murray (in the Chair)
Order. The hon. Gentleman should be making a short intervention, not a speech.
Richard Foord
Any additional support should reach households quickly. Does the hon. Lady agree?
Fay Jones
I think the Government have done extremely well—the issue of park homes has been rectified, and I firmly commend them for that—but I want to see further support for off-gas-grid homes.
The Government mobilised a rapid response to the energy crisis earlier this autumn and are supporting all households through a variety of means. This is the right thing to do and I commend the Government for their approach. However, I am concerned that not enough is being done to support rural households.
Dr Neil Hudson (Penrith and The Border) (Con)
Will my hon. Friend give way?
Fay Jones
I will make a touch more progress, and then I promise I will bring my hon. Friend in.
The cost of heating oil has skyrocketed this year. Consumers are experiencing a 21% increase from two months ago, and a nearly 60% increase compared with prices before the war in Ukraine. That is unsustainable for many households. People in rural areas are, on average, five years older than the national average in urban areas. They are often vulnerable and especially susceptible to changes in energy prices.
Dr Hudson
I congratulate my hon. Friend on securing this debate about a very important issue for all our areas. In her part of the world, and in rural Cumbria, off-grid households and businesses rely on heating oil, liquefied petroleum gas, biomass, wood and so on. We welcome that the Government have recognised that, but does she agree that the £100 support must be looked at? People often have to make minimum orders of 500 litres. We urge the Government to do more to address the issue.
Fay Jones
My hon. Friend’s constituency is much like mine, with often challenging topography and older housing stock that leaks energy. He and I share the same concern, and I want the Government to look at the amount of support offered to rural areas.
The Government have so far introduced a series of short-term measures designed to assist the lowest-income households through extraordinary times. It is an ambitious and comprehensive package of support, necessitated by the severity of the situation, and it rightly supports the most vulnerable in the short term; however, for rural homes, it is lacking. Only £100 has been announced so far. I am confident that the Government can go further.
On Monday, the Chancellor announced a review of the energy price guarantee, so that it will apply not for two years but for six months; in April, we will look to introduce a targeted system of support. My concern is that, if we do not do more now, we will increase the number of people who are considered more vulnerable later this year.
Several hon. Members rose—
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Member is making an excellent speech. It would be very well received in my vast and very remote constituency if a Government Minister agreed to come north and meet with citizens advice organisations. That would mean a huge amount to people. I am willing to offer bed and breakfast—and maybe a dram—to any visiting Minister.
Fay Jones
I thank the hon. Gentleman for that intervention; I am sure that the Minister will cover it in his speech. I will talk about some of the groups that can input into this debate once I have taken the intervention from my hon. Friend the Member for Faversham and Mid Kent (Helen Whately).
Helen Whately (Faversham and Mid Kent) (Con)
I commend my hon. Friend for securing the debate. Many of my constituents, particularly those who use heating oil and those who live in park homes, are extremely worried about how they will cope with costs. I am grateful to the Government for the support that has been announced, but it is not enough. We need more clarity and further certainty about the protections that will be available for these residents.
Fay Jones
My hon. Friend hits the nail on the head. The Government have taken some extraordinary, comprehensive steps, but there are some gaps, which she is right to highlight.
On the point made by the hon. Member for Caithness, Sutherland and Easter Ross, in the past few days I have met Liquid Gas UK and National Energy Action. It is apparent that the Government’s short-term approach is universally welcomed, but there is more to do. NEA was quick to outline that my constituency of Brecon and Radnorshire has one of the highest levels of off-gas-grid properties in the UK: up to two thirds of my constituents are dependent on heating oil to heat their homes.
Julian Sturdy (York Outer) (Con)
I congratulate my hon. Friend on securing this important debate. A lot of Members are talking about very rural constituencies. Mine, which lies on the edge of York, is not amazingly rural, but we still have a lot of off-grid communities that are reliant on off-grid energy support. Does that add weight to her argument? We are not talking just about remote rural communities; the issue affects vast areas of the country.
Fay Jones
My hon. Friend is absolutely right, and I am glad that he made that very important point. My constituency is heavily rural, but people need only live half a mile or a mile outside one of its larger towns to be off the gas grid. This is not a remote rural problem; it affects a huge amount of the population. I would be remiss not to say, Mrs Murray, that it probably affects a large number of your constituents too, which gives us even more reason to be delighted to see you in the Chair.
The Country Land and Business Association reports that 70% of rural housing across the United Kingdom is off the gas grid and has to use alternative heating methods, such as oil. We must not forget those heating their homes using LPG or wood pellets. They are currently not receiving equity of support with more urban households or those on the gas grid.
Edward Timpson (Eddisbury) (Con)
Like many others here, I am delighted that my hon. Friend has secured the debate. My constituency of Eddisbury is like hers, with a high proportion of people off the grid. There is a particular issue with how dual-purpose properties, where a farmhouse might provide accommodation or there is accommodation above a pub, could be supported by the Government’s welcome scheme. It would be helpful if the Minister addressed that point.
Fay Jones
I have never had such a workout in Westminster Hall! I thank my hon. and learned Friend for his intervention; the Minister will have heard his point. It is also important to consider the commercial aspect of this issue, because a lot of businesses heat premises via heating oil, LPG or pellets. We forget the rural economy at our peril.
I want to mention the case of a constituent who contacted me about the cost and availability of heating oil. She lives high up in the Black Mountains, where the weather is colder and more severe. Her home is in a beautiful place, but it is in an austere position, without a connection to mains gas. She told me earlier this month that she had bought 500 litres of oil, costing £500. That will barely last her through the winter. She is deeply concerned about how she will afford to heat her home this winter and the remainder of the year.
Between May 2020 and May 2022, the average price of heating oil in the UK increased almost 250%. Some communities are reporting increases in LPG costs of around 200%. The price of logs has more than doubled for many. It is therefore vital that off-grid homes in rural areas do not lose out on this support.
Virginia Crosbie (Ynys Môn) (Con)
I thank my hon. Friend for leading this debate. I have had many constituents on Ynys Môn write to me, as 60% of them rely on off-grid energy for heating. The average cost of filling an oil tank has almost doubled this year. Although they are grateful for the £100 heating oil payment, that is simply not enough. On behalf of my constituents and those of other rural constituencies across the UK, I ask whether the Minister agrees that a price cap should be applied to off-grid heating oil and LPG, mirroring that applied to gas and electricity.
Fay Jones
I thank my hon. Friend for her intervention. I, too, hope that the Minister addresses that point. It is important to remember that those living off the gas grid are not subject to the protection of the energy price cap. I hope the Minister acknowledges that point.
I want to allow some time for the Minister to respond, but a point I would like to press this morning is that rural areas are not wealthy. It is misleading to think that, because we live in beautiful homes, we do not suffer some of the social pressures that the rest of the country does. Rural poverty is often masked by the relative affluence of rural areas, and by a culture of self-reliance in rural communities, but self-reliance cannot be how my constituents stay warm this winter. Rural homes are often older, damper, draughtier and more poorly insulated than those in urban areas. In the long term, it is right that those issues are addressed, to improve overall energy efficiency, decarbonise our homes and save money for our constituents. However, the short-term needs of people who live in rural areas need to be addressed now.
Dave Doogan (Angus) (SNP)
I thank the hon. Member for giving way just before she reaches her conclusion. Her constituency, albeit in Wales, will be similar to mine in Angus, where the 3,500 houses that rely on oil are in the more remote places, further up the glen where the weather is much colder. It is a double whammy for people. Does she agree that, when the Government review the situation, they should accept that £100 does not cut it and that we need a far more significant intervention in the oil market?
Fay Jones
I do. We have heard a chorus of unanimity this morning, and I hope that the Minister has heard that message. The hon. Gentleman underlines my great concern that if we do not do more now, we will create a bigger cost for the Treasury later in the year, when the Chancellor moves to a targeted package of support for the most vulnerable. We will increase the number of those people if we do not do more now. I am very concerned, and I look to the Government to take more urgent action.
It is clear from the debate that there is unanimity right across the House. It is imperative that we speak for rural communities and ensure that we deliver equity between those who live in rural homes and those who live in urban homes. I urge the Government to reconsider whether more could be done to support rural households. Perhaps the Minister will also outline how the £100 payment will be delivered. We do not yet have that detail from the Department, and I would like to see that uncertainty ended.
Victoria Atkins (Louth and Horncastle) (Con)
I am so grateful to my hon. Friend, who is doing a wonderful job of representing the interests of millions of rural and urban residents around the country who are not on the grid. Last Friday, I held a winter support summit in my constituency, where I brought together all the organisations that can help people, from charities and businesses to schools and councils. To help the Minister, there are some schemes that large energy companies are running to help the most vulnerable. I encourage hon. Members to look into that, because there is some help that can support the work that I am sure the Minister will tell us about.
Fay Jones
I thank my hon. Friend for her intervention, which gives me the opportunity to pay tribute to all those supporting vulnerable individuals through this winter, whether in rural or urban areas. We could not get by without the support of many of the charities and social organisations that are supporting those who deal with fuel poverty issues.
I will sit down shortly—I hope that I have allowed all Members to speak—but I hope that the Minister is clear about the strength of feeling on this issue. It is imperative that the Government come forward with a package of measures that matches their ambitious and comprehensive support for those who live on the gas grid; I would like to see that replicated for my constituents who live off the grid.
The Minister for Climate (Graham Stuart)
It is a great pleasure and privilege to serve under your chairmanship, Mrs Murray—for the first time, I think. I congratulate my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) on securing the debate. We can see how motivated rural colleagues are across the House; we have the Liberal Democrats here, we have Plaid Cymru, the SNP, the SDLP and of course a large mass of Conservative Members. It is pretty shocking, given the importance and topicality of the issue, that His Majesty’s Opposition did not even bother to turn up. I thank everyone else for doing so, and for taking this issue seriously.
Colleagues will know that I have long been involved in this issue. My constituency has a lot of people who are off grid; I have spent a lot of time fighting the inequities of Government systems of support, which too often are shaped around urban needs and ignore or try to fit the rural into some urban pattern. That does not work, and too often the system, under successive Governments, has failed properly to recognise the needs of rural areas that, because of their natural grittiness, put up with it more than they should.
James Cartlidge (South Suffolk) (Con)
I welcome the Minister to his position, and congratulate my hon. Friend the Member for Brecon and Radnorshire (Fay Jones) on a brilliant debate. The Minister talked about the equity between off grid and those who have access to the grid. For people in South Suffolk on heating oil who have contacted me, one of the key issues is that it is not regulated; there is no cap and so on. Is it not the case that in practice that may be difficult because of the size of the producers, and therefore the issue is competition? Can he assure us that he keeps the competitiveness of the market under review? The worry I have is that as it gets tougher, we get more agglomeration, and that is how we get higher prices in the long run.
Graham Stuart
As ever, my hon. Friend is absolutely right, and has gone to the heart of the issue. The Government recognise and understand the pressures that people are facing with the cost of living. This is a deeply worrying time for many of our constituents, and we will continue to listen to their concerns, which have been well expressed by many colleagues today.
Wholesale energy prices have been rising due to global pressures, and the UK is hardly alone in feeling the pinch. It is important to recognise how significantly this Government have stepped in. Back in May, £37 billion of support was announced, which altogether means that the most vulnerable households are receiving £1,200 a year—£100 a month—before we get to the energy price guarantee and the alternative fuel payments. It is important to put that on the record. There is a lot of support for all of our more vulnerable and rural constituents. The hare that is running—and this has been repeated by my hon. Friend the Member for Brecon and Radnorshire today—is that it is inequitable. On the face of it, that £100 intuitively does not feel right. However, I will take colleagues through the numbers and explain why there is equity, while also recognising the issue of monitoring. That is important, and the Government are going to monitor the situation going forward.
Heating oil prices have risen more than prices for other alternative fuels such as coal, biomass and others. The Government have picked a point in time; we looked at what the situation was going into winter last year and compared it with this year—then we have sought to provide protection. We have looked at the numbers for September last year to September this year. LPG, coal and biomass have risen less than heating oil. The average price of heating oil in September 2021 was 40.6p per litre in Great Britain. A year later, that average price is 100.3p. For those colleagues who have talked about a 60% rise, it actually comes to a 147% rise. The average use of heating oil over a year is 1,514 litres; that used to cost £615, but has gone up to £1,415. That has a serious impact on those with the least. I have already talked through the £37 billion package. The difference in the current bill is around £100—that has been the rise.
The cost of heating for the average on-grid home would have increased by approximately 220% in that same year to October. The energy price guarantee lowers that increase, through unparalleled Government intervention to support people, which I think we can be proud of and should do a better job of trumpeting. Over the same period the price of heating oil rose by 150%. It has been dampened by the EPG for on-grid homes to 130%. Probably due to market competition and lack of Government intervention—I am not saying that that is the only explanation—heating oil rose by 150%. That is where the £100 comes in. I beg colleagues on all side of the House to stop the hare running; there is comparable support. I can say that as someone with many oil-heated and LPG homes in my constituency; it is comparable.
The question is about going forward—what if prices spike? That is why, quite rightly, colleagues have pressed me and the Government to monitor the situation and to be prepared to intervene if necessary. I cannot pledge precisely that that intervention would happen, but we are going to monitor the situation with a view to being able to intervene if necessary and maintain the equity that I assure colleagues is in place.
Victoria Atkins
I thank my right hon. Friend for putting that explanation on the record. The £100 figure has been totemic. As that is a very technical response, it would be ideal if he were able—with his copious free time—to provide us with a “Dear colleague” letter that we could all share with our constituents. I also acknowledge the enormous help that the Government have provided to people on the grid. The energy price guarantee and the vulnerable household payments that the Minister set out are incredibly helpful. The next question I am bound to ask—I sense some parliamentary questions—
Graham Stuart
Let me return to my scripted speech, which I seem to have entirely ignored so far, and hope to get to that answer. The energy bill support scheme—there are so many; I struggle with the acronyms myself, and I am responsible for them—provides £400 per household to assist with the cost of rising energy prices and in most cases is being delivered automatically through domestic energy suppliers.
There is a small proportion of households, including off-grid homes, that will experience increased energy costs but do not have those domestic energy supply contracts. I assure hon. Members that the Government are committed to ensuring that they receive support for energy costs. We are working rapidly to ensure that off-grid households will be able to apply for the scheme. We do not have a centrally controlled society. We do not have a database of everybody—they are not forced to register—so we are finding practical ways and looking to find designated parties to help to administer the scheme, and to do so in real time, this winter; having a perfect system next winter is of no help to people who need help now.
Graham Stuart
I am going to press on as I have so little time left. The alternative fuel payment is an additional one-off payment of £100, which is provided equally. Both schemes will be delivered across the UK and we have been working with devolved Administrations to understand how best to deliver it. It is important that all households receive support from the Government this winter, including harder-to-reach households that are not benefiting from the energy price guarantee or automatic energy bill support.
There were questions earlier about park homes and farmers. Our aim would be a system that ensures that each household receives the support. We are looking to find the right counterparties in Northern Ireland and GB to make sure that that is in place. Some forms of delivery will be more burdensome administratively than others, but for the most part, where we are able to do things automatically, consumers have to do nothing.
Graham Stuart
Will the hon. Gentleman bear with me? I have so little time left and I would like to get these points on the record.
The Government are seeking to ensure that nobody is inadvertently excluded from the generous package of support that is being provided. As the Chancellor emphasised in his statement on Wednesday, the Government’s priority will always be to support the most vulnerable. That is why we are ensuring that individuals not covered by other schemes will be able to apply for the £400 of energy bill support and, if relevant, the additional £100 alternative fuel payment.
Helen Whately
I looked at these schemes as Exchequer Secretary in the Treasury, and my right hon. Friend is absolutely right about the complexity of helping people who are off grid, as well as about the competition in the heating oil market. It is very helpful that he has set out the figures and the rationale for that help. Can I push him to address the need for reassurance on what happens if prices go up further, and on the need for clarity, for people in park homes for instance?
Graham Stuart
I completely agree with my hon. Friend. As well as getting the policy right, a lot of government is about communication and I hope there will be a “Dear colleague” letter, working with colleagues, to get those messages out. I am sure no one would want to say that maintaining something was not fair, when it in fact was—we have to get the information out there and it is our responsibility to do that.
Graham Stuart
The hon. Gentleman is absolutely right and there are two parts to our interventions, one for business and one for homes. If the homes scheme is complex, the business one is even more so. There is a vast variety of contracts. Coming into this Department from elsewhere in Government, I have been amazed at the quality of work done by officials. They have been working nights and weekends, day after day. I am just on the receiving end of the submissions and feel a bit knocked down; they are producing the schemes succinctly, and dealing with very complex issues and delicate balancing acts, to make sure that we balance timely intervention against perfection. Perfection is not possible. What we can do and what we will work on, with the help of colleagues, is to be transparent.
Dave Doogan
Is the fact that oil customers pay for their oil up front factored into the support?
Graham Stuart
We are trying to get payment to those who have bought ahead. In terms of timing, we cannot time payment exactly with when they are purchasing. What we can seek to do is to make sure that they are getting comparable levels of support and that we are monitoring the situation going forward.
Motion lapsed (Standing Order No. 10(6)).
Transport in Nottinghamshire
(2 years, 1 month ago)
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Tom Randall (Gedling) (Con)
I beg to move,
That this House has considered Transport in Nottinghamshire.
It is a pleasure to serve under your chairmanship, Sir George. I congratulate the Minister on her inaugural Westminster Hall debate. I thank colleagues from across our great county for attending this debate, and I look forward to hearing their contributions. I know that there are other county colleagues who would be here had their ministerial obligations allowed them.
If I may, Sir George, I want to take you on a journey to the heart of England, to a place where the English civil war began and ended. It gave the world Boots the chemist, D. H. Lawrence, Alan Sillitoe, Nicholas Hawksmoor, Sir Paul Smith, Torvill and Dean, Ken Clarke and Ed Balls. The strapline of Nottingham City Council used to be “Our style is legendary”. I submit that, across the arts and sciences, from medicine to sport, from politics to business and literature, Nottingham and Nottinghamshire compete on not only a national but an international stage.
In a global world, connectivity is key. It is therefore appropriate to talk about transport in Nottingham and Nottinghamshire. I will talk about recent successes and what more we need to do. Our great county is not one of forests and bows and arrows; its legendary style is taking us into the future. Nottinghamshire is to host the world’s first fusion energy power plant at a site near Retford, bringing billions of pounds and thousands of jobs to the region. The East Midlands freeport, including the Ratcliffe-on-Soar power station site in Rushcliffe, is the UK’s only inland freeport and promises to position the region as a green tech trailblazer, driving significant new job growth in the region as well as local and international trade.
But we need the funding to match those ambitions. The East Midlands Chamber and east midlands councils analysed the Treasury’s latest public expenditure statistical analysis for 2021. They found that there was a particular deficit in transport infrastructure spending, at just 64.7% of the UK average for 2020-21—the joint lowest of any UK region or nation. If the east midlands were funded at a level equivalent to the national average, it would have an extra £1.26 billion a year to spend on transport.
Over the past 10 years, there has been a growing gap in transport spend between the east midlands and the west midlands, where spend has been rising. In 2016-17, the £217 per head spent on transport in the east midlands was two thirds of the £322 received by the west midlands, and by 2019-20 that proportion had declined to 61%.
Before speaking about how we might remedy that, I want to praise the good news. I welcomed the publication of the integrated rail plan in 2021, which offered a £96 billion package. The Sun newspaper described the east midlands as the big winners of the plan, and I am particularly keen to see High Speed 2 come to Nottinghamshire to reduce not only travel times to London but the journey time from Nottingham to Birmingham from 74 minutes to 26 minutes. John Lewis might have closed its store in central Birmingham, but residents of Edgbaston and Selly Oak will have no trouble coming to Nottingham to shop.
I also welcome the integrated rail plan’s inclusion of the full electrification of the midland main line. It has been a long time coming. I remember as an 18-year-old attending my first Conservative parliamentary selection meeting for the 2001 general election and hearing the campaign hopefuls talking about it then. We seem finally to be making progress on that. I ask the Minister to confirm that the Government remain committed to delivering the integrated rail plan in full, including the plans for the east midlands generally and Nottinghamshire in particular, and that recent announcements about Northern Powerhouse Rail will not affect the county.
Lilian Greenwood (Nottingham South) (Lab)
I thank the hon. Gentleman for securing this debate on such an important topic. Does he share my concern that we have been promised investment in east midlands transport many times, only to be disappointed? Schemes such as the electrification of the midland main line have been promised and then withdrawn. Does he share my concern that we are having to wait longer and longer for the improved transport services that our region needs? Does he share my hope that the Minister will commit to some timescales for the completion of the electrification and the HS2 link to the east midlands?
Tom Randall
The hon. Lady comes to this debate with more experience than me of being a Nottinghamshire MP, having been in this House for some time. Also, as a former Chair of the Transport Committee, she speaks with some experience of this issue in particular. However, I come here optimistic and hopeful that we will see the progress that has perhaps eluded us for too long.
Our railways are not just about inter-city travel; getting into and out of cities from suburbs, towns and villages is equally important. The integrated rail plan offered, business case permitting, investment in the Robin Hood and Maid Marian lines. Can the Minister say whether these schemes are included in the Department’s acceleration unit’s portfolio of projects?
In my constituency of Gedling, we have three railway stations—Burton Joyce, Carlton and Netherfield—that are not being used to their full potential. They are pleasant stations, but local residents complain that if they have a train to take them to work in the morning, they will not necessarily have one to take them home. Too many trains pass through Gedling stations without stopping and rail services do not run late enough for the train to be an option for those travelling to the city of Nottingham for leisure.
This can and must be remedied. Improvements on the lines between Nottingham, Lincoln and Grantham can help to make rail journeys competitive with car journeys. I know that the Minister will receive a business case from Midlands Connect in the new year on how to make improvements on this line. Can she make a quick determination on that proposal? If she would like to visit any of those stations to help her to understand the problem, she is more than welcome to visit.
Netherfield station stands on the Grantham line, which runs south from Nottingham, which brings me to another serious topic: crossing the river. In “Henry IV, Part One”, Hotspur speaks of
“the smug and silver Trent”.
I would not describe the Trent as “silver” these days, but perhaps the river had reason to fill “smug” in February 2020, when it succeeded in bringing gridlock to Nottingham. There are three bridges across the River Trent in Greater Nottingham. The latest was opened to traffic in the early 1980s, having originally been built as a railway bridge in the 1870s. Over time, the growing city has had to rely on these existing connections, which lie in the centre of the western city.
In February 2020, it was discovered that water damage had corroded steelwork under the Clifton bridge, which is the only dual carriageway crossing in Greater Nottingham. That caused the temporary closure of the east bridge, which carries all eastbound traffic and one lane of westbound traffic, while the bridge was repaired. The closure of the Clifton bridge brought large parts of the city to a standstill at rush hour, including traffic on the A612 in Gedling, which is on the other side of Greater Nottingham. Natalie Fahy, editor of The Nottingham Post, wrote at the time:
“The closure of Clifton Bridge means traffic has been chaotic, with journeys of just a few miles taking people hours to complete. The QMC has been hard to reach, being stuck right at the epicentre of the crisis. Throw into the mix a high-stakes Forest game at home and you’ve got a big Nottingham problem.”
She concluded:
“The problem we’ve got is that there is no slack in our traffic system. We are incredibly vulnerable.”
Ms Fahy’s analysis is, I submit, entirely right. One remedy would be to construct a fourth crossing for road traffic across the River Trent in Greater Nottingham. A fourth Trent crossing to the east of the city would relieve the pressure on the existing system. If it was constructed in, for example, Colwick, that would complement the recently built Gedling access road, while also providing better services and better access to the A46 for residents in the eastern side of Nottingham.
Midlands Connect has described the A46, which runs from Somerset to Lincolnshire, as one of the country’s most important trade routes, performing an important local, regional and national function. The Government have previously signalled their commitment to the importance of the A46 in Nottinghamshire by widening the single carriageway section between Newark and Widmerpool, and there are plans for an A46 Newark bypass. A fourth Trent crossing would connect Gedling to the A46 corridor. I spoke earlier about the East Midlands freeport and the thousands of green jobs that it is destined to create. I want my constituents to be able to access those jobs, which a fourth Trent crossing would help them to do.
A full bridge would be costly, and I appreciate that infrastructure projects take time and need to progress step by step. However, I would be grateful if the Minister signalled her support for a strategic outline business case for such a project, which even in these financially straitened times would come in at a much more manageable £150,000.
I must resist the temptation to be too Gedling-focused in any debate about Nottinghamshire. As my hon. Friend the Member for Broxtowe (Darren Henry) cannot contribute to today’s debate, let me also mention Nottinghamshire County Council’s £40 million levelling-up bid to finance the planned Toton link road. The new link road would consist of a one-mile, single carriageway track between the A52 east of Bardills island and Stapleford lane, taking the form of a high-quality, landscaped boulevard with significant tree planting and walking and cycling routes. I know from the recently opened Gedling access road, which cost a similar amount, how transformative such a scheme can be. The Minister will be instinctively coy about commenting on levelling-up funding, but I gently ask whether the Department for Levelling Up, Housing and Communities is aware of the merits of these proposals.
My hon. Friend the Member for Broxtowe would have also mentioned bus services and the vital lifeline they provide for elderly and vulnerable constituents, citing particular concern about the withdrawal of the L10 and L11 services in Bramcote, and now the withdrawal of the number 21. Other Members will likely also mention bus services, but locally in Gedling, I welcome the Government’s support for the bus service improvement plan, which will support a number of routes, including the 39, 53 and Lime Line services from Arnold to the city of Nottingham.
So far, I have focused on the south of the county. As someone who was born in Nottingham and lives in Arnold, I hope that is forgivable—I have tried to speak about what I know. I have also covered projects that might be considered high level. However, in any discussion about transport in Nottinghamshire, I ought to mention the concern of the average road user: potholes. It is no secret that Nottinghamshire’s roads need a bit of tender loving care, and the issue has been the subject of numerous local newspaper reports.
I will highlight two recent developments. The county council decided to replace—where possible—the much-hated, temporary “tarmac out of a bag” pothole repairs, which seemed to disintegrate as soon as workmen had tended to them, with a new patch repair way of cutting and filling, which works much better, lasts longer and is much neater. I also applaud the Conservative-run Nottinghamshire County Council’s decision to spend an extra £15 million on road repairs. Residents in and around Westdale lane in Carlton, to give one example of many, will much appreciate that forthcoming transformative investment.
We will hear shortly from the leader of Nottinghamshire County Council, my hon. Friend the Member for Mansfield (Ben Bradley), and others who will speak knowledgeably about the entire county, particularly the north. In general, I am positive about the future possibilities for transport in Nottinghamshire, and the forthcoming Nottinghamshire and Derbyshire devolution deal, which will see transport decisions made more locally. Nottingham and Nottinghamshire’s leaders have worked in partnership with the Government to deliver a series of announcements for our region. I look forward to hearing colleagues’ contributions on how we can make sure that not only our style, but our transport, is made legendary.
Ruth Edwards (Rushcliffe) (Con)
I congratulate my hon. Friend the Member for Gedling (Tom Randall) on securing this timely debate and welcome my hon. Friend the Minister. I feel sure that our transport woes are about to be magicked into thin air as she takes hold of her brief. I thank her for being here today.
The 20th century will be remembered for many things: the telephone, the television, the internet, two world wars, one World cup, Beatlemania, Winston Churchill, Margaret Thatcher and the second Elizabethan age. But it will also be remembered as the century where our public transport policy—pardon the pun—lost its way. Convinced as we were that the car was king, public transport infrastructure was neglected or destroyed. From Beeching to Blair, railways bore the brunt. Buses were brushed aside, and cycling and walking were relegated to the second division of transport choices.
It is only since the Conservative Government came into office in 2010 that this 20th-century, feet-of-clay thinking has been replaced with 21st-century, forward-looking optimism. That optimism reimagines our transport system around car-free journeys and reinvests in our public transport system. It is behind the Government’s drive to make record investment in transport to and from Nottinghamshire.
As my hon. Friend the Member for Gedling mentioned, last autumn the integrated rail plan confirmed the delivery of HS2 right into the heart of Rushcliffe, to East Midlands Parkway station. That is also the heart of the new East Midlands freeport. We will get up and down our country faster. Train times from Nottingham to London will be cut by two thirds. We will get across our country faster. Train times from Nottingham to Birmingham will also be slashed by two thirds. It is a package worth more than £10 billion for the east midlands.
The arrival of HS2 will help to level up a region that has historically suffered from one of the lowest transport spending rates per head anywhere in country, and that is not all. We are also powering ahead with the electrification of the midland main line. As a result of that investment, travel to and from Nottinghamshire will be much faster than before. The Government’s vision for building big infrastructure is impressive, but smaller and—crucially, in the current climate—much cheaper investment is also needed to improve people’s daily journeys.
Lilian Greenwood
I am quite surprised to hear the hon. Member talking as if there were no investment in transport in Nottinghamshire under the last Labour Government, because of course Nottingham City Council was able to create its tram lines in that period, which have obviously been expanded in recent years. Does she share my concern, however, that I will have retired, and perhaps she will have too, before future improvements such as the electrification of the midland main line and HS2 actually appear in our constituencies?
Ruth Edwards
Not at all. I looked up the last Labour Government’s delivery of miles of track, and it was something absolutely pathetic—something like 63 miles—so I have every faith that the delivery of the midland main line electrification and HS2 will come a lot faster than they would if Labour were in charge.
For my constituents, getting around Rushcliffe and into Nottingham, Loughborough and Melton is also key, and there are two issues I want to touch on in this debate. One is the train service from Radcliffe-on-Trent to Nottingham; the second is the issue of rural buses, which my hon. Friend the Member for Gedling highlighted.
In Radcliffe-on-Trent, we need a more reliable, frequent train service on the Poacher line, with trains every hour between 6.30 am and 10 pm, and every half an hour at peak times. Constituents have told me that the early finish to train services and the long gaps between trains mean they are not a realistic option for commuting, or for going into Nottingham in the evenings. There is also only step-free access on one side of the station for customers going into Nottingham. How those who cannot use steps are supposed to cross the railway tracks once they get back to Radcliffe is not entirely clear. We applied to the restoring your railway fund, but were refused on the grounds that our railway was already up and running. That is fair, but it seems a shame not to invest what must be a fraction of the cost of restoring a derelict track in order to enable more people to use an existing one.
I have been working with the Department for Transport and with East Midlands Railway, and we have made some good progress. Earlier morning services have been introduced, as has an additional peak service and evening service, and we have more services on Saturday and Sunday. However, we are still short of the regular service we need. DFT is working on a business case to extend the service, and East Midlands Railway has told us how popular the new services have been. I have been fortunate to have great support from previous rail Ministers, especially my right hon. Friend the Member for Daventry (Chris Heaton-Harris). I would be grateful if the Minister confirmed that the new ministerial team at the Department will continue to support the project to get more trains running to and from Nottingham and Radcliffe-on-Trent, serving this fast-growing community in my constituency.
Many of my constituents also rely on rural bus services to go to work, doctors’ appointments and the shops, and to visit friends and family. Last month, out of the blue, Trentbarton announced that it would be cutting the Skylink bus service between Nottingham and Loughborough. That service links many of my constituents in villages such as Sutton Bonington and Normanton-on-Soar to vital services in those centres. I would like to share with Members a couple of stories from constituents who rely on that service. Carol Payne says:
“I live on my own in a housing association property in the village and don’t drive. I also have a son with SEN who has recently started uni at Brackenhurst NTU, we chose this so that if he needed support we could meet in Nottingham. This is now not the case as the weekend service is cancelled and there is the worry the service could be cancelled altogether…I myself work in Loughborough”,
at the college,
“and rely on the bus to get to work and back. Without this service I cannot work which ultimately means I could lose my job and possibly my home if I can’t pay my bills. I cannot afford to move to Loughborough, as I would need to rent privately…I travel on this service twice a day…people use this particular service for work but it is also used by several young people who are using it to access Loughborough college and some schools.”
Jodie Warrington writes:
“I for one, and I know many other residents, use the bus to get to QMC for hospital appointments on a regular basis. I also use the bus to get into Loughborough to do the shopping. With two villages only having one corner shop and two very small community shops, how are we meant to shop cheaply with the cost of living? As far as residents are aware, no consultation has been sent regarding losing this bus service. I can’t afford taxis everywhere. How do we get to doctor’s appointments, hospital appointments, food shopping, top up gas and electric? I can’t walk the mile there and back to Pasture Lane stores in Sutton Bonington from Normanton with my disabilities. I have no family that I can really rely on.”
I am extremely grateful to Nottinghamshire County Council and the leader of said council, my hon. Friend the Member for Mansfield (Ben Bradley), who is sitting next to me, for stepping in to provide the funding for this service until April, while a review of bus services across the county is undertaken. I know that work patterns have changed for many people since the pandemic. Many routes that used to be commercially viable and could cross-subsidise those that were not, no longer make enough money.
We need to look at new ways to provide these services, such as the on-demand bus model being trialled in Nottinghamshire. We also need to address the issue of shortage of labour, because Trentbarton is struggling to get enough drivers to maintain its timetable. Buses have become irregular to the point where the timetable is part fact and part fiction. It is making daily tasks and journeys very difficult for my constituents. Just this morning, constituents from Cotgrave told me that last night lots of people were unable to get home as all the buses were suddenly cancelled, due to a lack of drivers.
Trentbarton is not the only bus company facing this problem. Having spoken to them, I understand that the main issues in recruiting drivers are people no longer wanting to work unsociable hours after the break over the pandemic, and the higher wages being offered to HGV drivers. Businesses up and down Rushcliffe in all sorts of sectors—transport, farming, hospitality and social care—all tell me of their difficulty in recruiting and retaining staff.
The tight labour market is one of the biggest supply-side issues facing businesses and inhibiting growth at the moment. I urge the Minister to take that feedback to colleagues, and also ensure that we have strong plans to encourage more people into careers across our transport sector. I also hope the Minister will be able to commit to a meeting with Nottinghamshire colleagues and Nottinghamshire County Council to discuss how we can continue to fund and deliver a strong rural bus network, right across the county.
We are getting funding but, as my hon. Friend the Member for Mansfield will set out in more detail in his speech, it comes with caveats, such as that the funding must be spent on bus lanes. On many of Rushcliffe’s rural roads there is no space for bus lanes—we would rather have the buses in the first place, please. Reliable buses and regular trains, accessible stations and timetables that mean that people who took the train to work can also get home: I accept those are not the sexy announcements that make the front page, but they are the vital bread-and-butter services that enable our constituents to use public transport to get to work, to take their family on an outing, to do their weekly shop, or to visit their doctor, dentist, hairdresser or dog groomer. Get the picture: it is important.
If we want to promote the use of public transport, it needs to be regular, reliable and convenient. Otherwise, why would people use it? The Government are trying to encourage more car-free journeys, so it is vital that investment is made in the local transport that people use every day, if we want to encourage people to use that instead of the car. I met a gentleman at a parish meeting in Keyworth last week, who told me that he used to get the bus to work in Nottingham. The bus had become so irregular and unreliable that it was taking him longer than it took his partner to drive from Keyworth to Coventry. He no longer takes the bus.
Strong public transport networks become even more vital when we consider the record number of new homes being built. In Rushcliffe we have seen far more new homes and developments than the national constituency average. They have been built without the infrastructure to match. Reform of the planning system is an issue for another debate; I can hear the Minister breathing a huge sigh of relief at that. The wider issue that is relevant today is that resilient public transport networks and infrastructure are even more vital in areas with significant numbers of new houses being built—areas such as Rushcliffe.
That brings me to my fourth point, which is, happily, about the fourth bridge—the one over the Trent, that is, as showcased earlier by my hon. Friend the Member for Gedling. My hon. Friend described the chaos that rained down on Nottinghamshire the weekend when Clifton bridge was shut for emergency repairs. I think I remember reading at the time that, on that weekend, Nottingham was the most congested city in not only the UK and Europe, but the world.
In conclusion, at the moment our infrastructure for crossing the Trent is stretched to capacity. I really hope that the Minister will commit to delivering the initial assessment of proposals so that we can consider our options, including costs and timescales. We have made fantastic leaps forward with big infrastructure investments, but we now need to focus on the issues that affect people getting around our constituencies every single day. Buses and trains need to be reliable and frequent; if they are, I am sure people will use them more and more.
Ben Bradley (Mansfield) (Con)
It is a pleasure to serve under your chairmanship, Sir George. I congratulate my hon. Friend the Member for Gedling (Tom Randall) on securing this important debate. I echo his words about the fourth Trent crossing; he is a keen campaigner on this issue and has been lobbying hard for several years to bring forward an idea that he has discussed with me in my role as leader of the council. The project is well beyond our local budget, but I would welcome the opportunity to work with the Government and bring forward a business case in the way my hon. Friend has described. I also welcome my hon. Friend the Minister, who, even during our short seconds of conversation before this debate, has already made me decide that she is a breath of fresh air. I hope that will continue.
As colleagues have mentioned, I am the leader of the local transport authority, so I am pleased to have the opportunity to bang on at length about these issues—I think I have about an hour left to go through them all. I want to start with the very local and raise a couple of Mansfield-specific issues with the Minister. The first is the Robin Hood line. My right hon. Friend the Member for Sherwood (Mark Spencer) and I have been banging on about this now, in our various capacities, for about 12 years. We have made a lot of progress: the project has inched forward significantly, but it has only inched. We have had a commitment for a long time, but progress is slow. It was finally announced in the integrated rail plan, most recently, as part of the connections around Nottinghamshire in Toton, which are hugely important.
There is now further potential to link the existing Robin Hood line—it is still in place; it just needs upgrading—to projects such as STEP Fusion in the north of the locality. There is the opportunity to bring in billions in investment, jobs and growth and link all that together. We can improve on the issue and take local control over through our devolution deal, but should take any opportunity to accelerate the process or bring forward what is a smaller and perhaps less widely strategically vital project for the locality and the region, but hugely important to local communities, who just want to access work and leisure opportunities that they cannot at the minute without a car. Many cannot afford a car in those areas. The issue is hugely important to us and I welcome any opportunity to accelerate the project.
The second issue is the Sainsbury’s junction, as it is known locally, on the A60 in Mansfield. Frustratingly, at one point I had actually secured the funding the fix it. We worked hard prior to the pandemic to come up with a workable plan that we thought would improve the situation resulting from the district council’s helpful decision to put about 20 different businesses, including two supermarkets, into a retail site with one entrance and exit on to a busy trunk road. People can queue for up to an hour at Christmas to get out of it.
We came up with a plan and submitted it to the Government’s pinch point fund and were promptly told that we would get the money. That was the day before the pandemic hit, and the money was promptly—and quite understandably—reprioritised to other things. But the plan is there and the money was there. If we could get the money, we would crack on and do it. The issue is hugely important to my constituents. Does the Minister know whether such pinch point-type funding opportunities are likely to be revisited?
My final point, a positive one, is about the significant upgrades to the A614—the spine road up through the north of Nottinghamshire that allows many of my constituents to get to work—that are starting this year. We are keen to deliver those and accelerate the outcomes and the growth they will unlock around those communities. People will not be surprised to hear that inflationary pressures will have an impact. Are the Government minded to give support to deal with inflationary pressures around such projects? The good news is that work will commence later this year.
My colleagues, my hon. Friends the Members for Rushcliffe (Ruth Edwards) and for Gedling, have touched on the issues I want to raise, beyond Mansfield and into the county. The first is highways maintenance. A good quality highway network is absolutely key for residents in Nottinghamshire. It is always the number one thing that comes up in county council elections and in surveys; I imagine it will be the number one issue that people raise in our budget survey later this year. Although our care services are vital, they touch only a very small proportion of our residents, whereas everybody uses the roads.
We undertook a massive review about 12 months ago. It has now finished and has resulted in 50 different actions that we will take forward, including a longer-term programme of works and improving the way we repair local roads, including residential roads, with a move to a “right first time” approach where we make the more expensive, long-term repair that delivers the quality residents expect, instead of temporary repairs, wherever we can. We are also working hard to communicate better with residents to make sure they understand what is happening on their street and why and how long it will take, in advance of it happening, which has perhaps been lacking up to now. I am pleased we have been able to do that.
We have invested an additional £12 million over the next four years, on top of the £18.5 million annual DFT funding, to start to tackle the historic backlog of repairs. In truth, there is some £150 million-worth of repairs. If the Minister can find that down the back of the sofa, I can get it all sorted. It is a challenge. Dare I say that this is what happens when 32 years out of the last 40 have been Labour-led in the county? I knew Opposition Members would enjoy that remark.
The changes we have introduced are starting to make a real difference to residents on the ground. We have reduced the number of temporary repairs, which everybody hates to see, by nearly 60%, while doubling the number of square metres of high-quality repairs that we have been able to do over the past 12 months. Those outcomes are great, but we have thousands of miles of road to cover, so that is a really long-term project. We are making good progress. I welcome the announcement that the pothole element of the DFT funds will continue into next year. I hope we will get a good share to be able to tackle the backlog and continue to deliver this work.
On wider transport, and particularly buses, it is often forgotten how important they are—not just the local economy in terms of jobs, industry and the supply chain, but for connecting people to health and leisure opportunities and as support for my constituents in tackling health inequalities and having better lifestyles. That is hugely important to all of us.
We had a relatively good bus network around the county pre-covid, with high levels of satisfaction. The county council was consistently rated in the top three upper-tier authorities in the country. We annually invest more than £4 million into bus service provision, supporting 80 services that, pre-covid, carried nearly 2 million people. The commercial sector would not provide those services and we have worked really hard to sustain them and to provide lots of new infrastructure.
This year, we have provided further temporary support to another 20 services to help bus recovery. That is the thin line that prevents those services from being withdrawn, because they are not commercially viable. As with many parts of the country, there are increasing challenges for bus companies and the provision of services, including inflationary costs, driver shortages and passenger confidence, which has taken a massive hit, as my hon. Friend the Member for Rushcliffe described. It is increasingly difficult for bus companies to show up on time, or even at all, and deliver a service. We get a daily constituency report of all the different bus routes that have been cancelled that day, with less than a day’s notice. That makes it incredibly difficult for people to be able to get around and get to work.
Local bus companies have undertaken big recruitment campaigns and lots of new drivers are being trained, and hopefully we will get there in time, but the viability of the routes is a huge concern. I welcome the Government’s support for the sector. We have been able to prop up some of those services because of that support. We are also trialling on-demand responsive transport, which has to be part of the future of the networks to make them sustainable, so that we are not running empty buses around fixed routes all the time. We have been able to pilot that as a result of the national bus strategy rural mobility fund. That seems to be going really well, to the point that the residents who sit just outside the pilot areas are asking when they will get access to these new services, which is really good news.
We have been indicatively allocated £30 million under the bus service improvement plan, for which I am grateful. The truth is that many fixed-route services are not likely to be viable in the future if trends continue. There are really challenging times ahead for bus services. The current combined funding will not support them all from April next year. I have asked the Government to look at greater flexibility in BSIP funding to tackle services being withdrawn in rural areas and market towns. It is really difficult to justify investing in bus lanes and other infrastructure when at the same time services are being withdrawn.
I have recently written to the Secretary of State for Transport to ask for the flexibility to spend that money on a viable bus service, rather than on bus lanes for buses that I have not got. That would be really helpful, and I hope it would be common sense. I have written a very long letter to the Secretary of State for the Department for Levelling Up, Housing and Communities, laying out a number of ways we could use local money that already exists more flexibly, rather than having to splash the cash on lots of things. We could certainly make it simpler for ourselves.
The final thing I will touch on is the macro bit—the regional bit—which is where the good stuff is happening. It speaks to what the hon. Member for Nottingham South (Lilian Greenwood) said earlier on about the commitment to get these things done, and that is the devolution deal we secured this summer. It is massively meaningful, because it gives us local control over delivery of lots of these projects. As my hon. Friend the Member for Gedling touched on earlier, the figures around investment in the region make for stark reading, both in terms of transport and wider public spending and private sector spending. Even for the year 2020-2021, if we were to have the average level of national funding that would be an additional £1 billion into our region to support those services, so it is really meaningful.
That is why I am so pleased that we have been able to secure the largest gainshare investment fund in any devolution deal anywhere in the country ever, which is brilliant. It is worth just over £1.1 billion to our area, with a further transport pot yet to be determined. In the west midlands they recently got another £1 billion on top of that to invest in their local transport, which would be absolutely fantastic. I am grateful to my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) for signing off and making that commitment to Nottinghamshire, Derbyshire and the east midlands when he was Secretary of State.
It gives us the opportunity to do all sorts of really good things, such as joined-up ticketing across the network on all types of service. Someone should be able to get from Arnold or West Bridgford to the Peak District on one ticket, across bus, train and tram with one day rate in a really simple and joined-up way in the future, and that will be hugely meaningful and impactful to local residents. It also gives us the opportunity to lay out those key routes around employment in particular, to fill the gaps on that key route network and to link up our transport systems to the sites of future jobs and investments—I mentioned STEP fusion earlier on.
We have a £20 billion investment; we can not only build the skills pipelines and support that industry, but connect people into work from the surrounding villages and towns and ensure everybody has access to those opportunities. We can also accelerate long-awaited projects such as the Robin Hood line and the Maid Marian line.
Take the Toton site, for example, which I know the Minister knows well. It is the site of significant jobs and investment in coming years. It has been in the integrated rail plan, and there is new station investment and all sorts of commercial and housing investment going on there. We need a link road, which we put in a levelling-up fund bid for and which I hope the Government will look favourably on, but we then have the ability to install that road network and public transport network to deliver projects, such as the Maid Marian line, that connect surrounding towns and villages into Toton. We will have that in our local control for the first time; that is hugely important and meaningful, and tackles some of the concerns that the hon. Member for Nottingham South laid out earlier.
We will have responsibility for the wider area transport plan by March 2024. Being able to build a joined-up strategy across the whole area is really important, because it means that residents living in Broxtowe, Mansfield or Ashfield—who may just as well travel into Derbyshire as into Nottinghamshire for work and leisure—can have a joined-up system that actually works and connects them to the places they get to, and not be constrained by boundaries.
Lilian Greenwood
I agree with many of the points that the hon. Member has made, but if the region is to be successful in planning for the future and developing the transport network that we need in Nottinghamshire—and, indeed, those links across to Derbyshire and other parts of the east midlands—do we not need certainty from the Government about investment in the future? As he will know, we spent a great deal of time planning around an HS2 station at Toton, only for it to move to East Midlands Parkway. Would certainty about both timescales and locations not enable us to do a better job in the region?
Ben Bradley
I thank the hon. Lady for her intervention. As my hon. Friend the Member for Gedling said, she knows the area incredibly well and knows the transport issues incredibly well from her own experience. She is right, of course, that certainty would be hugely helpful; she pointed to the midland main line, where we perhaps have not had that in the past. I was really pleased to see that as one of the accelerated projects in the recent Budget announcement, which I am really grateful for.
What this devolution deal gives us is certainty; we know we will have that funding over the next 30 years, and we know it will be within our local control to deliver some of these projects. We have been given overall control over the integrated rail plan, which means that those HS2 stations, what we build around them and the transport connectivity to join it all together is, for the first time, within our local gift, instead of relying on Government to do that. That is a good thing because it means we can focus on our local priorities.
I totally get what the hon. Member for Nottingham South is saying, but there are some answers in this devolution settlement that can help us achieve our priorities. As I say, we will have that integrated rail plan and the HS2 element, so there is a huge growth potential. If we can get that right, that would be meaningful for investment, jobs and opportunities in our area, so I am excited about that.
I would welcome a conversation with the rail Minister, my hon. Friend the Member for Torbay (Kevin Foster), about the options and that certainty around HS2. So far, we have gotten to Parkway, Nottingham and Derby, and then Sheffield to Leeds, but there are still some options on the table for the bit in the middle. I have a view as to what those options should be, as I know many colleagues, Midlands Connect and others will have, but the timescales to make that decision are uncertain, so I would welcome the chance to have that conversation.
To summarise, there are significant challenges on a local level where we need support to maintain networks—not least bus networks, in the short term—to improve highways and to help our communities, but I welcome the long-term opportunities that come from that devolution settlement to deliver more investment and growth, to improve our transport links and to have more local say over how it all works.
I hope the Minister will take away the requirement to ensure those two things are joined up. That would enable us to sustain and protect local services while we put together those plans and strategies over the next 18 months before our devolution deal comes into force, and ensure that those things are not lost and we do not end up with a big gap in the middle. If the Department for Transport and wider Government can help us to overcome those challenges, the future for investment and transport links in our area is bright.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
It is a pleasure to serve under your chairmanship, Sir George. I am grateful to the hon. Member for Gedling (Tom Randall) for securing this important debate, and to all those hon. Members who have contributed. I also thank those who have listened intently; I allude to my hon. Friend the Member for Nottingham North (Alex Norris) and the new shadow transport Minister, my good Friend the Member for Wakefield (Simon Lightwood), who have a passion for the region and wider transport systems in our country. I welcome the Minister to her place; this is the first time we have met in a Westminster Hall debate since her appointment. I have been in my role for almost three years, and I seem to welcome a new opposite number most years, but I shall not take it personally.
It is a pleasure to contribute to this debate on transport in Nottinghamshire, and it seems appropriate, given the economic situation. Perhaps if the Government had adopted the economic principles of Robin Hood instead of doing the exact opposite, they might not be in this economic crisis. Although the area is nearly 150 miles from my Slough constituency and a few hours from it by train, I know that constituents in the region have suffered badly from the same mismanagement of our national transport system that my constituents have, as have countless communities across our country.
When it comes to transport, overpromising and underdelivering more than epitomise this Government’s policy direction. Trying to follow the recommitments, U-turns and cancellations is enough to make anyone dizzy. Northern Powerhouse Rail was launched, and then scrapped. Then the Prime Minister promised that it would be built in full, but that is being put into question by her new Chancellor. High Speed 2 was promised in full and then scaled back, and the Toton rail hub was removed. The east midlands is chronically underfunded and receives the lowest amount of public funding in the whole of England, and there is a lack of certainty for transport industries, which are eager to deliver on key transformative projects for the people of Nottinghamshire. It is an utter shambles.
Like the hon. Member for Gedling, I will try to decipher the ambiguities of the Government’s policies and to figure out exactly what their plan is for long-neglected midlands communities. As he rightly said, funding needs to match the ambitions of the people in the region, especially with regard to HS2. It is clear that for decades Nottinghamshire has been sidelined when it comes to funding viable transport solutions for residents. In spite of the excellent work of local leaders, organisations and local enterprise partnerships, the east midlands has consistently received the lowest public spending allocation in England, according to the Government’s own figures. The region ranks bottom or near the bottom for spending per head of population almost across the board.
The East Midlands Chamber and East Midlands Councils have produced a statistical analysis that shows that transport infrastructure spending in the region was just 64.7% of the UK average for 2020-21—the joint lowest of any UK region or nation. If the region had been funded properly and fairly, it would have had an extra £1.26 billion to spend on transport alone.
Sadly, that neglect is also reflected in national policy announcements. On rail, opportunities have been missed or delayed. HS2 commitments for the midlands have been vague or missed. Can the Minister provide clarity today? What are her Government’s proposals for HS2 in the midlands under the new leadership? How will she ensure that they are delivered on time, within budget and with minimal disruption to local residents? Is there an update on the proposed railway station at Toton?
I am becoming increasingly concerned that the draconian cuts that the Chancellor has confirmed will take place may include cuts to HS2 spending. Rowing back further on half-baked plans will not benefit Nottinghamshire, or any other region of our country. When the integrated rail plan was first published, Transport for the East Midlands noted:
“full delivery of the Eastern Leg of HS2 as originally proposed is the best way to connect the towns and cities of the Midlands and the North, address transport poverty and ‘level up’ the eastern side of Britain”.
HS2, including the eastern leg to Leeds, should be built in full. Fulfilment of that project would also open a door to improved rail services elsewhere, releasing much-needed capacity. When HS2 is running, it may be possible to double the number of services between Nottingham and Lincoln to two per hour. As the hon. Member for Rushcliffe (Ruth Edwards) noted, the region needs more train services. She also spoke about the criticality of bus services for rural areas, and gave some excellent examples from constituents. Under this Government, there have recently been 19,000 cuts to rail services and 5,000 cuts to bus services.
On Northern Powerhouse Rail, it seems that the Government do not know whether they are coming or going. Will the Minister confirm that a link to the midlands will be included in the Northern Powerhouse Rail proposals when the project is looked at again? We need reassurances that promises will be kept. The Prime Minister committed to the project in full; when will we have confirmation of that? When will the Minister be able to comment on the business case submitted in May 2021 for a line between Nottingham, Leicester and Coventry? That project is supported by 87% of local people, and has an initial delivery time of just four years. It would cut journey times and reinstate a direct rail link, so I hope that her Department looks at that proposal favourably.
The hon. Member for Mansfield (Ben Bradley) spoke about various local projects, including the Sainsbury’s junction, funding for local transport projects, the A64 and potholes, which are a perennial problem across our country. As the leader of Nottinghamshire County Council, he is looking to build on the good work of previous councils. Hopefully, there will be clarity from the Minister on those projects.
There has, however, been some progress. I am pleased that there has been progress on the electrification of the midlands main line. That must form part of a rolling annual programme of electrification that brings down costs, ensures a sustainable supply chain and helps us to tackle the climate crisis. What are the timescales for electrification? That question was highlighted by my hon. Friend the Member for Nottingham South (Lilian Greenwood), the former Chair of the Transport Select Committee, no less? She has vast experience. Many constituents in Nottinghamshire and beyond need certainty about the programme of electrification. Will the Minister elaborate and give us that certainty?
Transport can be transformative to people’s livelihoods and wellbeing, and can increase the opportunities available to them, particularly during a cost of living crisis. That is particularly true of bus services. In Nottingham, key services have been preserved, due to the hard-working, Labour-run local authority managing to secure much-needed funding. That is in the face of 5,000 services being lost nationally. Nationwide, almost 60% of areas missed out on funding altogether, which will do long-term damage to bus networks. Great Britain is the only country in the developed world where private bus operators set routes and fares with no say from the public.
The Labour party would put the public back in control of the public transport that they heavily depend on; they would have the power to set bus fares and routes, which is as it should be. Local communities and leaders know best when it comes to the transport services that they use every day, so I hope the Minister has heard what hon. Members have said today about the local council’s bid for the Toton link road. It would bring benefits to the tune of 400 jobs and 2,700 new homes, and has a potential completion date of 2026. Will the Minister look at the application very carefully and consider the significant benefits that it could bring?
We face impending cuts, and the Government have form on slashing transport commitments, but I remind Ministers that our commitments to net zero, a thriving economy and a levelled-up north and midlands cannot be achieved without transport investment. It is always the communities outside our capital hubs that get left behind, so I hope the Minister has positive news for the future of transport in Nottinghamshire.
The Parliamentary Under-Secretary of State for Transport (Katherine Fletcher)
It is a pleasure to serve for the first time under your chairmanship, Sir George. I thank my hon. Friend the Member for Gedling (Tom Randall) for securing this debate. He has demonstrated his passion for what has been his home county—man and boy? I see him nodding. It has been a thoughtful and interesting debate, and I thank everyone who has contributed.
I thank the hon. Member for Slough (Mr Dhesi) for his warm comments welcoming me. In many respects, his remarks have epitomised the debate. He highlighted the investment in London and the south-east in previous years. Perhaps, offline, he will let me know what the people of Slough and London would not have wanted to happen that would have allowed for investment in Nottingham. However, I want to stay positive.
Colleagues might not be aware, but Nottingham is close to my heart. It is where I went to university, and every Saturday I played amateur sport all over the county. As I listened to the contributions, I remembered the practicalities of trying to get from point A to point B in the county. I recognise many of the points that hon. Members have raised on behalf of their communities.
As a civil engineer’s daughter and a northern MP, I appreciate in both a practical and intellectual capacity what a positive impact good transport links have, and the need for certainty and investment to make them happen. The Department is committed to using transport to drive economic growth across the country. We are also determined to play our part in making transport greener—for example, through the electrification of rail lines. I am proud that this Government are investing in transport for people, including those in Nottinghamshire and the broader east midlands. Today’s debate highlights how crucial the interconnections are between transport modes. Responsibility for much transport connectivity in the area rests with Nottinghamshire County Council, working closely with the bus partnerships. There is a significant role for national operators such as Network Rail and National Highways, as well as regional transport. I was delighted to hear the emphasis that my hon. Friend and leader of Nottingham City Council, the hon. Member for Mansfield (Ben Bradley), placed on the devolution deal.
Ben Bradley
I just want to clarify that I am leader of Nottinghamshire County Council. I would not want to be associated with some of the challenging issues in the city.
Katherine Fletcher
I apologise profusely to the leader of Nottinghamshire County Council—of course, Robin Hood Energy is not something that he would have put in place. Perhaps some of that funding might helpfully have been used to improve transport, but that is a conversation for another day.
There is lots to be positive about in Nottinghamshire. The devolution deal that has been agreed with some of the authorities in the east midlands is great; the commitment of local leaders, not least my hon. Friend the Member for Mansfield, in agreeing that deal and working together to deliver it is really important. There is an exciting public consultation this year, in advance of formal proposals to Government. When implemented, that deal will see a new combined authority formed, with an elected Mayor and significantly greater transport freedoms, as has been highlighted. For example, the Mayor will have the power to decide whether to introduce bus franchising, or integrated ticketing across public transport areas to join up the multiple local authorities in the region. As a northern MP, joining up the dots in regional transport is, and will continue to be, a passion of mine.
We will also provide funding to the combined authority, so that it can create a new local transport plan that integrates transport in Nottinghamshire with transport in the surrounding authorities, and can target transport funding at the areas that need it most. Once the Mayor and the combined authority are in place, the deal will include a Government fund of £38 million a year over 30 years to be invested by the combined authority, so that it can drive growth and deliver its priorities. That will provide the region with the certainty regarding investment and the power that many Members have mentioned. That east midlands investment fund will be monitored to make sure it is driving economic growth and levelling up, but given the energy and ideas that have already been displayed in the Chamber, I am confident that it will do that.
I turn to issues raised in the debate, starting with the roads projects, as I am the roads Minister. Improving road connectivity, enhancing safety and reducing congestion are important priorities, which is why we are already investing in the roads around Nottinghamshire. We are boosting economic growth; we want to reduce delays and incidents by improving the A46 Newark bypass. National Highways will soon launch a public consultation on its latest plans, and I would be grateful for the input of anybody watching this debate and of Members present.
Another example of progress being made is the A614/A6097 corridor scheme—try saying that after a couple of beers—on the major road network. It was identified in the Chancellor’s recent economic growth plan as a scheme that the Government want to accelerate as fast as possible, because we recognise its importance. Those improvements are designed to deal with increasing traffic volumes, to relieve congestion, and to improve safety for all road users. That work will bring about important employment and, potentially, housing opportunities. Department for Transport officials will discuss with Nottinghamshire County Council how progress with the scheme’s business case might benefit from acceleration, potentially through planning reform, regulator reform and other improvements. I look forward to engaging with my hon. Friend the Member for Mansfield on that issue. The Government are investing over £24 million in that scheme, with approximately £4 million more coming from the county council and private developers. It is a real example of quick delivery; we need to get on with it.
A number of Members also mentioned the fourth Trent crossing—as someone who has got stuck in Nottingham when traffic grinds to a halt, I recognise the points they made. My hon. Friends the Members for Gedling, for Mansfield and for Rushcliffe (Ruth Edwards) all highlighted that issue and mentioned wanting to pull a business case together in order to go ahead with the investment and ease congestion. I am happy to take that away. The proposal is in its embryonic days, but perhaps I can write to Members with the routes and the opportunities there are to build an investment case locally and get that on to the DFT’s slate. I will follow that up with official help.
The Government recognise how important the issue of potholes is, not least for cyclists pursuing active travel. I am a cyclist myself, and when you go over a pothole, it can be painful—never mind the economic and practical damage that potholes do to cars. We have been investing £950 million per year, which has been committed for three years. Crucially, that is outside London and the mayoral combined authorities. The Department is committed to allocating this funding to local highways authorities so that they can spend it most effectively on maintaining and improving their respective networks, based on local knowledge and circumstances. Since 2015, the Government have allocated over about £110 million to Nottinghamshire County Council for local road maintenance. To answer the question from my hon. Friend the Member for Gedling directly, Nottinghamshire County Council will in the future receive over £18.6 million from a new fund to enable it to consider work on bridges, cycleways and lighting columns, as well as fixing potholes.
The Department has long advocated that highways authorities should go risk-based on their asset management plans and is committed to helping to support the production of those where possible for highways assets, including road resurfacing, because well-maintained roads are important for the safety and security of all road users. I recognise that Nottinghamshire County Council has worked hard in recent months and years to develop and deliver its highways improvement plan, and I hope it will reap significant benefits.
My hon. Friend the Member for Mansfield mentioned a number of specific schemes, not least the junction with access into the retail park. He will forgive me if I do not use my debut to riff on Government policy on specific schemes. I am happy to write to him with a little more detail.
Buses are a huge passion of mine. They are often the easiest and quickest piece of public transport to put in place. As set out in the national bus strategy, we are determined that everyone everywhere should, in time, have access to a great bus service. That is why £3 billion has already been committed in this Parliament to drive improvements, which is the largest investment in buses in a generation, highlighting their importance. More than £1 billion of that fund is going directly to local transport authorities such as Nottinghamshire County Council to support the delivery of their bus service improvement plans.
I am pleased that my hon. Friend the Member for Mansfield highlighted the substantial funding that the BSIPs across both Nottinghamshire County Council and Nottingham City Council received—a combined £30 million. I note his request for flexibility in the BSIP funding and, rather than answering from the Dispatch Box here, I will pass that on to Baroness Vere, who is the Minister responsible. I would comment that these were high-quality bus service improvement bids and that the £18.7 million and the £11.4 million allocated are a recognition of the quality of the work that has gone into them. The initial funding will support bus priority measures on key routes, such as the A60 in Mansfield and the route between West Bridgford and the city. That is important and will provide for better connections and integration, as well as bus stops—we should not forget the humble bus stop. It is all important.
The Government also recognise that the bus sector continues to face significant challenges. The pandemic had a massive effect on bus patronage across the country, and although it is now stabilising and steadily increasing, it still remains below pre-covid levels. The Government have therefore provided £2 billion of funding to bus operators and local transport authorities to mitigate the impact of the pandemic and to continue supporting services. My hon. Friend the Member for Mansfield highlighted the idea of a gap, and we are committing significant funding to prevent one.
This funding was due to end in October but, because of the challenges facing the sector and because many households are struggling with the rising cost of living, the Government have announced a further £130 million, six-month extension to the bus recovery grant to continue to support services until March 2023. That will help millions of people who rely on bus services, as highlighted so articulately by my hon. Friend the Member for Rushcliffe. Nottinghamshire County Council is allocating around £690,000 of that support between April 2022 and December 2022 alone, with further funding until March 2023 to be confirmed in due course.
We are also very aware that the needs of passengers in urban and rural areas differ, as highlighted by colleagues, and that traditional local bus routes may not be financially sustainable in rural settings. That was put beautifully during the debate: are fixed, empty buses beneficial for everybody?
I am delighted that my hon. Friend the Member for Mansfield referenced the rural mobility fund, worth £20 million, which we created to trial more demand-responsive services and allow people to have a different way of accessing the public transport they need. Nottinghamshire County Council was awarded nearly £1.5 million from the fund to launch its Nottsbus On Demand service, which started operating in August in the villages around Retford, Ollerton and Newark. It also provides an evening service to Mansfield and is due to be extended to the rural areas west of Rushcliffe in the coming months.
I note that my hon. Friend the Member for Rushcliffe invited me to a meeting. I am extremely happy to pass that on to Baroness Vere, as the Bus Minister, but I am happy to meet my hon. Friend in a private capacity to buy her a coffee for being nice to me at the start of the debate.
Ben Bradley
Would the Minister also pass on our thanks? I was talking to my hon. Friend the Member for Gedling (Tom Randall) about Gedling buses, and the funding that has been provided by the Government for the next six months through to April has genuinely saved routes in all our constituencies that would otherwise have been unviable. Various services, including Stagecoach and Trentbarton, announced the closure of many services prior to that funding, as they were unable to support them. As much as there is uncertainty into the future, that intervention has saved those routes in many of our communities.
Katherine Fletcher
I would be very happy to pass that on.
I will turn now to rail, which was the subject of much of the debate and which is another important component of the public transport system. My Department has been working on some exciting projects in Nottinghamshire. East Midlands Railway will be introducing the new bi-mode trains to the midland main line by late 2024, so passengers can expect a smoother, quieter and more reliable journey than those on diesel trains. The further electrification of that route, which was raised by a number of Members, is also under development. As announced in the recent integrated rail plan, it is planned to be completed by around 2030. That will directly address the points raised by the hon. Members for Nottingham South (Lilian Greenwood) and for Slough.
The hon. Member for Slough raised the HS2 proposals and commitments. The integrated rail plan is what is going to get delivered—that is the plan moving forward, and I think it is the appropriate one. With regard to East Midlands Railway, my hon. Friend the Member for Rushcliffe raised the importance of the Poacher line, and my hon. Friend the Member for Gedling mentioned the current service on East Midlands Railway. I am happy to reassure Members that East Midlands Railway services are being kept under review. The Department and EMR have the opportunity to improve the frequency of services, should the evidence base be there, and that is being kept under review. We want to have enough clean, reliable and punctual trains running where they are needed most. The integrated rail plan is a step towards making sure that that practical, on-the-ground delivery is there, and masthead projects.
I would also point out that work has begun on developing a new high-speed rail line to the east midlands. Unlike previous plans, this will enable HS2 trains to serve both East Midlands Parkway and the city centre of Nottingham directly, which is an improvement on the original proposals. It will also cut journey times and provide more seats for passengers.
During my time in Nottingham, I worked in Toton and cycled to and from the city centre, so I recognise the need for improved connections and the opportunity for regeneration and investment in the area, and I have had a close look at the map of the plans. I recognise that local leaders had plans for economic development around the previously proposed station at Toton, and that has been improved on in the integrated rail plan. The Government are committed to accelerating the transport improvements in Toton.
As for the request from my hon. Friend the Member for Mansfield for a meeting with the Rail Minister, I am happy to pass that on. Rail is not in my portfolio, but I will make sure my hon. Friend the Member for Torbay (Kevin Foster) is aware of the request.
Ben Bradley
I want to take the opportunity to thank the Government, because they have been really helpful. As my hon. Friend the Member for Gedling said, we are probably one of the places in the country that is happiest with the integrated rail plan, which delivers the connectivity that he talked about and includes an ongoing commitment to Toton. Our development corporation has since been given a huge amount of capacity funding to redo its plan on the basis of the integrated rail plan, and that work is progressing at pace. I want to put on the record my thanks for that investment, because the Government really are backing Nottinghamshire and the region with those long-term plans.
Katherine Fletcher
My hon. Friend is approximately five lines ahead of me in my remarks. I thank him for his contribution.
The mixture of options for local and regional rail services and the scope for capacity on high-speed services will attract significant private sector investment. With 50:50 match funding with the taxpayer, what my hon. Friend highlights sounds extremely exciting.
In addition to considering station options, we have committed resources to the study, as my hon. Friend highlights, to exploit the linkages with any other investment in Nottinghamshire, including proposals for reopening the Maid Marian line. We are continuing to develop the study and scope, and we are working closely with local railway stations. My hon. Friend the Member for Gedling kindly invited me to visit Nottingham railway stations, but in all honesty I should probably pass that invitation on to the Rail Minister, although I may be there shortly, in which case I will have a quick look myself.
My hon. Friend mentioned the levelling-up fund bids and tempts me to talk about an ongoing departmental process. I recognise his passion and commitment, but the bids are currently under evaluation and I cannot comment on them. I can assure him that Ministers’ evaluation of the shortlist stage is criteria-based and absolutely bias-blind. His passion is clear to see, and I am happy to pass on that enthusiasm, but I am not able to comment.
The East Midlands freeport is the most exciting project when talking about economic growth and thinking about regions holistically. When it is completed, it will be a national hub for global trade and investment and will promote regeneration and job creation. It is uniquely placed to capitalise and innovate on the region’s commercial and industrial strengths. Once operational, those three sites may be the best-connected freeport in the UK. It is exciting to see this all starting to come together in a regional debate.
I am pleased to have had the opportunity to debate the successes and aspirations of the transport sector in Nottinghamshire, of which there are clearly many. I hope I have answered hon. Members’ questions, but given that this is my first time out, if there are any that I have missed or further points that I have not fully addressed, I will be happy to review the debate and write to hon. Members afterwards.
It is clear that Nottinghamshire is a place with many excellent champions, including Ministers who could not attend the debate and the Members who have come and contributed so well, and organisations doing dedicated work, such as Nottinghamshire County Council, Transport for the East Midlands and East Midlands Connect. I leave this debate optimistic about the future of transport in the county, and I look forward to working with hon. Members further to improve connectivity for local people.
Tom Randall
I thank all hon. Members for their contributions. There was a bit of political back and forth with the hon. Member for Nottingham South (Lilian Greenwood), but despite a degree of political bickering, we all spoke passionately and with one voice to get the best for our city and county.
My hon. Friend the Member for Rushcliffe (Ruth Edwards) illustrated with vivid examples from her constituents some of the key transport issues affecting Rushcliffe. We are very much on the same page when it comes to improving train services and getting better stopping services. The examples she gave clearly set out the extent to which so many rely on the bus services, which can play a vital role in everyday life.
I am grateful to my hon. Friend the Member for Mansfield (Ben Bradley) for his contribution. With his wide-ranging and roving brief across multiple portfolios, he not only gave us a bird’s eye view of the east midlands, but went right down to the level of Sainsbury’s junction to talk about the issues there. I thank him for the progress report on highways maintenance, which has been a common thread and key issue in the debate.
I am grateful to the hon. Member for Slough (Mr Dhesi) for being a candid and critical friend in many respects and for the points the Opposition raised. I tried not to mention Robin Hood as an historical figure, because there is more to Nottinghamshire than Robin Hood. I regard him as fighting a corrupt regime to restore the status quo while Richard was fighting in the crusades, but I am not sure he was the socialist visionary that the Labour party would like him to be.
I again welcome the Minister to her place, and I welcome her commitment to join up the dots in transport, as she put it. I welcome the further discussion about road schemes, of which many have been mentioned during the debate. I particularly welcome her comments about exploring opportunities to build further crossings over the River Trent. I look forward to receiving further correspondence from her Department on that matter.
The comments the Minister made about potholes and bus stops vividly illustrate the point that we can talk about grand projects, but the issues that are important to a lot of people are the state of their own streets. We have to cover both of those. The Minister said that the Government are committed to using transport to drive economic growth, which we can all get on board with. The debate has been an opportunity to celebrate what we have achieved but also to start a conversation about further things that need to be done. I look forward to continuing that conversation in other forums.
Question put and agreed to.
Resolved,
That this House has considered Transport in Nottinghamshire.
Vehicle Taxation Reform
(2 years, 1 month ago)
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Sir George Howarth (in the Chair)
I will shortly call Wera Hobhouse to move the motion, and I will then call the Minister to respond. I remind hon. Members that there will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
Wera Hobhouse (Bath) (LD)
I beg to move,
That this House has considered reform of the vehicle taxation system.
I am delighted to bring this matter to Westminster Hall for debate. There is an urgent need for reform of our vehicle taxation system, for both fiscal and environmental reasons. The public understand that change must come; they look to the Government for clarity on the path to be followed. I hope that the Minister will be able to aid that process today. She will recognise that the future of travel is changing every year; Britain’s transport networks and habits are moving into the net zero era.
Electric vehicle ownership is rising, as people try to help the planet and their wallets. Battery electric vehicles, or EVs, made up 14% of the new cars sold so far this year, and more electric vehicles were sold last year than in the previous five years combined. 2030, the year in which polluting vehicles will no longer be produced or sold, is fast approaching. The Government must act to reform road tax if they are to avoid yet another huge black hole opening up in their finances.
No form of change will be easy, but the sooner change is made the easier it will be. The main form of vehicle tax in the UK is fuel duty, which is nearly 53% added to every litre of fuel paid for at the petrol pump. Fuel duty raises approximately £28 billion a year for the Treasury. That is alongside the 28% VAT that is paid on fuel sales.
Richard Foord (Tiverton and Honiton) (LD)
I thank my hon. Friend for securing this debate. The issue of how we tax road usage is very important, but I am deeply concerned about what is happening right now. In rural areas such as mine, where cars are essential to get around, we see people being hammered at the fuel pump. In part, that is due to limited competition and because there are fewer forecourts. Does she agree that we need to expand fuel duty relief for rural communities, so that it brings down prices immediately and eases the cost of living in the short term?
Wera Hobhouse
Absolutely. We see that people are facing great problems in rural communities and it is important to make short-term interventions to help them. However, I am really talking today about what vehicle taxation will look like in the long term, once we transition to net zero. Nevertheless, I fully take the point made by my hon. Friend.
On the other hand, drivers of electric vehicles pay no fuel duty. The Government need to continue incentivising the use of electric vehicles for environmental reasons. However, there are many ways in which that can be done without subsidising fuel duty. One option is to increase the number of public electric vehicle charging points. So far, the UK has only 31 electric vehicle charging points and only six rapid charging points per 100,000 people. If the Government are serious about encouraging the uptake of electric vehicles, they must ensure that the infrastructure is there. That would be of great benefit to my constituents in Bath and to the wider south-west, as our region is the second largest in the country for electric vehicle uptake.
Other incentives could include providing grants for electric car conversion. The conversion of old cars has significant benefits. For example, the carbon footprint of producing a new car is far higher than that created by continuing to use an old car. Currently, buying a new electric car is not an easy option for many people who do not have off-road parking or their own charging facilities. The conversion of older cars would help lower-income families who are struggling with the cost of living crisis, while also being part of the movement to less carbon-intensive transport options.
If we are to transition to net zero sustainably, the Government must find a way to fill the taxation income gap caused by declining fuel duty. The Government’s own net zero strategy from 2021 states that the taxation of motoring must keep pace with electric vehicles. I understand that the Treasury has said in the past that the level of income from motorists should stay about the same in future, but how can that be achieved?
Huw Merriman (Bexhill and Battle) (Con)
I congratulate the hon. Lady on securing this excellent debate. The Select Committee on Transport, which I chair, has put a series of recommendations to the Treasury, and we work closely with it. In advocating a form of road pricing, she rightly says that there will be a fiscal black hole. Some 4% of the entire tax take comes from motoring taxes. The evidence we received from the Treasury was that that figure would plummet to zero by 2040, so that means a loss of investment not just for roads, which account for just 20% of that total tax figure, but for schools and hospitals. Does she agree that the reason why we need road pricing is not just to fill the hole, but because devolved Mayors, in using their powers, are creating a patchwork of road-pricing schemes, and it will be difficult for the Government to get into that space with that patchwork already in place?
Wera Hobhouse
I totally agree. We need some clarity and something that motorists across the country can see as a coherent strategy, rather than the patchwork that the hon. Gentleman spoke about. One approach would be a scheme based on mileage. Other factors, such as emission levels or road type, could be added into the mix. Road pricing, as it is often referred to, is not a new idea. The Liberal Democrats proposed a version of it in our 2010 manifesto. It has been explored in depth many times. So far, no noticeable progress has been made towards its adoption and the hon. Gentleman is absolutely right that we need to act and find ways forward quickly.
Nearly 20 years ago, the then Transport Secretary said that road pricing was 10 years away, but we do not have another 10 years to waste. The motivation then was to cut pollution and reduce congestion, particularly in larger cities. Our most urgent need now is getting to net zero and, while doing that, looking at the immediate financial implications that I have mentioned.
I want to draw the Minister’s attention to an excellent report released just a few days ago by the Campaign for Better Transport. The report tested options for a national road pricing system with a large cross-section of the public. The good news is that the public appear to be open to the idea of road pricing, otherwise known as pay-as-you-drive. In the survey, nearly 50% of respondents felt that fuel duties were unfair. That is unsurprising. Low-income households are more likely to have older, more polluting and less fuel-efficient cars and to pay more fuel duty per mile travelled. That is in contrast to wealthier households with newer, more fuel-efficient vehicles. According to Policy Exchange research, someone with a new car could pay half the amount of fuel duty compared with the owner of an older car. Other findings from the report show that 65% of those surveyed believe that electric vehicle owners need to pay tax to use the road system. Drivers felt that people with electric vehicles are effectively driving tax free, while those who are unable to switch—largely for financial reasons—must pay.
We must encourage the take-up of electric vehicles to reach net zero. However, the public are acutely aware that Britain’s finances are under pressure after the recent economic shocks. Money must be found somewhere. There is evidence that the current vehicle taxation system is not fit for purpose, and the public agree. In the Campaign for Better Transport report, 60% of respondents agreed that there was a need to reform the vehicle taxation system. What options are available to Government and are these options fair in the eyes of constituents? Pay-as-you-go, or pay-as-you-drive, is worthy of consideration. It is widely regarded by experts as a progressive step forward. A pay-as-you-drive system could charge drivers directly per mile driven with a set distance charge. Another alternative could be smart road pricing, whereby the charge per mile varies depending on different factors. The Treasury would have the option of applying this equally to all vehicles. Alternatively, it could create a series of levels based on emitting status and/or the location where the person is driving.
The Climate Change Committee report to Parliament this year noted that road pricing “will be necessary” in the longer term. It recommended that the Government implement it “later this decade”. The Select Committee on Transport has recommended smart pricing, as has the Policy Exchange, the AA, and the Social Market Foundation.
For the first time in a long time, consensus is beginning to emerge. When pay-as-you-drive was initially pitched in the Campaign for Better Transport survey, 42% of respondents supported the idea, with 21% saying “No”. After the concept had been explained and questions answered, the percentage in favour rose to 49%, with opposition dropping to just 18%.
Pay-as-you-drive can come in many forms, but there are three options worth considering. One is a flat per-mile charge for electric vehicles. That would keep fuel duties as they are for existing petrol and diesel vehicles, and those duties would wither away as those cars disappear from our roads. Another option is replacing fuel duty and vehicle excise duty, with a set per-mile charge based on the emissions level of the vehicle. That could be estimated at the annual MOT mileage check. Lastly, we could replace fuel and excise duty with a smart per-mile charge that varies with vehicle type, emissions, location and time of day.
The main argument in favour of pay-as-you-drive comes from the need to reduce the number of people driving to lower congestion and reduce air pollution and carbon emissions. The transport sector is now the biggest source of domestic greenhouse gas emissions and accounts for 28% of all emissions. Cars make up 55% of that figure, while lorries and vans make up 32%. Buses, coaches, and rail collectively account for just less than 5%, according to Government figures.
A system based on rewarding those who drive less, rather than a flat rate, could lead many members of the public to use their cars less and use public transport more. The idea that drivers who drive more should pay more in tax, and that those who drive less should pay less, was popular in the survey and it is clearly the right direction to take.
There is no doubt that ensuring investment in public transport, including reforms to the integration of bus and rail ticketing systems, is critical to a functioning pay-as-you-drive system. Those reforms cannot exist in a vacuum and must be part of a wider conversation on how we move people away from private cars and on to environmentally friendly public transport.
In the Campaign for Better Transport survey, 69% of respondents stated that a key element of making the entire system fairer for drivers was to make public transport cheaper. The Liberal Democrats would seek to give new powers to local authorities and communities to improve transport in their areas. That would include the ability to introduce network-wide ticketing, like that in London, and greater powers to franchise bus services and simplify the franchise application system. We would also reverse the ban on local authorities setting up their own bus companies, which should give councils the tools to make transport accessible for everyone.
Reforming the system towards pay-as-you-go would also bring transparency to vehicle taxation. Many drivers are unaware of the level of fuel duty that exists within the price that they pay for fuel. It is important that we bring clarity and openness to the vehicle taxation system when we reform it.
We must do everything possible to reach our net zero targets. However, that transition needs to be sustainable and accessible. Pay-as-you-drive is a progressive way of solving the problem of declining fuel duty revenue. In particular, it would encourage much more sustainable transport habits. Clearly, pay-as-you-drive schemes must be combined with more investment in public transport and environmentally friendly infrastructure. I look forward to the Minister’s response.
The Exchequer Secretary to the Treasury (Felicity Buchan)
It is a pleasure to serve under your chairmanship, Sir George, on my first outing as a Treasury Minister in Westminster Hall. I will begin by congratulating the hon. Member for Bath (Wera Hobhouse) and thanking her for securing this important debate on vehicle taxation. As today’s discussion has demonstrated, it is a highly topical issue.
These taxes bring in some £35.5 billion to the Exchequer every year—money that is essential to fund high quality public services. That sum is worth about 4.3% of our total tax take, so it is critical. As the hon. Member for Bath said, the taxes have a crucial role to play in our transition to net zero, to which this Government are absolutely committed. Vehicle taxation and its future are a matter of great public interest. Road vehicles in Great Britain covered almost 300 billion miles in 2021, underscoring our need to maintain high-quality infrastructure while minimising emissions. As we transition to net zero, it is vital that we also consider how we continue to pay for our roads, as well as our schools, hospitals and armed forces.
Let me begin to outline the background by exploring the present system of vehicle taxation. We have two main vehicle taxes in this country: fuel duty and vehicle excise duty. Fuel duty is currently the largest yielding excise regime, raising £26 billion in 2021-22. Vehicle excise duty, or road tax as it is sometimes known, is worth a further £7 billion a year. Altogether, those revenues equate to just under 40% of the total education budget for this entire financial year, as we have an Education Minister, my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), present in the Chamber.
We also have other smaller taxes, most notably company car tax, which raises some £2.5 billion a year. That tax applies when a car is made available to an employee for private purposes, since that represents a taxable non-cash benefit. The funds raised from all those taxes contribute to both road maintenance and the resourcing of other vital public services. The Government have refined those taxes both to help families and businesses navigate cost of living pressures and to support our net zero ambitions.
At spring statement 2022, the Government announced a temporary 12-month cut of 5p to fuel duty on petrol and diesel, worth £2.4 billion. That is the largest ever cash-terms cut to fuel duty. Perhaps I can use this opportunity to address a few points made by the hon. Member for Tiverton and Honiton (Richard Foord). First, we asked the Competitions and Markets Authority to undertake an urgent review of the market for road fuel. Its findings suggest that the fuel duty cut was largely passed through, but Government have asked it to do a fuller market study on the supply of road fuel, and Government will react to those conclusions.
I draw the hon. Member’s attention to the rural fuel duty relief scheme, which gives support to motorists by compensating fuel retailers in some select rural areas that meet certain criteria. If they qualify, there is a 5p per litre reduction for the retailers. We have also adapted those taxes to incentivise take-up of electric vehicles. Road transport accounts for a massive 24% of UK carbon emissions, so reducing those emissions is essential to the UK’s transition to net zero.
Industry statistics suggest that more than 1 million battery and plug-in hybrid electric vehicles are now registered in the UK, which is a huge success, but we need to go further and faster. To support that, we will introduce a ZEV mandate in 2024, and end the sale of petrol and diesel-powered vehicles by 2030 and of hybrid vehicles by 2035. At that point, all vehicles sold will be zero emission. In all, the Government have committed £2.5 billion since 2020 to support the transition to electric vehicles, with targeted funding to offset the higher up-front costs and to accelerate the roll-out of charge point infrastructure. That includes £500 million to support local charge point provision, £950 million to support rapid charging on motorways and major A roads, and funding for charge points in homes and businesses.
In addition to those measures, the Government also use the vehicle tax system to incentivise the take-up of vehicles with lower carbon emissions. In 2017, the Government introduced a reformed vehicle excise duty system for new cars. Under that system, zero emission models pay nothing on first registration, while the most polluting pay more than £2,000. In subsequent years most cars move to a standard rate, currently set at £165 per year; meanwhile, zero emission vehicles pay nothing, either on first registration or subsequently. Company car tax, too, is adapted to the pursuit of net zero, and it has been effective in incentivising the uptake of electric vehicles and ultra-low emission vehicles. Company cars comprise a significant proportion of electric vehicles and ultra-low emission vehicles on the road today. Those cars will filter through to the second-hand market, increasing the supply of used electric vehicles and making the transition more affordable for consumers.
I will move on to the future of motoring taxes. I start by paying tribute to my hon. Friend the Member for Bexhill and Battle (Huw Merriman) who, as Chair of the Transport Committee, has done a lot of work on that topic. As more road users switch to electric vehicles, tax receipts from fuel duty and vehicle excise duty will decrease if the present system remains unchanged. The net zero review indicates that tax receipts from fossil fuel-related activity will eventually trend towards zero. Revenue from fuel duty is projected to decline from 1.2% of GDP in the middle of the decade to 0.2% by the 2040s, and revenues from vehicle excise duty will also fall. The Government are committed to ensuring that revenue from vehicle taxes keeps pace with that change, with taxation simultaneously remaining affordable for consumers. That will ensure that we can continue to fund the public services and infrastructure that people and families across the UK expect. In considering how to replace those lost tax revenues, the Government will also consider the secondary impacts of existing vehicle taxes, not least in reducing road congestion.
Wera Hobhouse
Does the Minister agree that the principle of all new taxation has to be that we disincentivise people from using their cars and incentivise more use of public transport? Ultimately, that is the most sustainable way to go forward.
Felicity Buchan
I am sure the hon. Lady will recognise that we have a medium-term fiscal plan coming up in about 10 days, and at this stage we will not commit to anything ahead of that plan.
I conclude by thanking the hon. Member for Bath for the opportunity to have a fruitful discussion about vehicle taxation. We are all aware of how important the issue is, given the fact that motoring taxes account for 4.3% of total tax take and £35 billion—a significant sum. We are also all aware that our constituents have a strong interest in any changes to vehicle taxation. I welcome the widespread support that hon. Members have expressed for using vehicle taxation to facilitate our transition to net zero, and I am grateful that so many hon. Members appreciate the need to reform vehicle taxation to maintain tax receipts while achieving net zero. We will listen to our constituents and to hon. Members as we continue to refine vehicle taxation and adapt it to the Britain of net zero, economic growth and fiscal responsibility.
Question put and agreed to.
Apprenticeships and Teacher Training
(2 years, 1 month ago)
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Mr Richard Holden (North West Durham) (Con)
I beg to move,
That this House has considered apprenticeships and teacher training.
I am looking forward to this very important debate about apprenticeships, specifically the role that I hope apprenticeships will play in our education sector in future. Expanding apprenticeships in a way that delivers for all our communities is going to be really important.
Apprenticeships are a vital but criminally underutilised part of our education mix. They drive productivity and growth in our economy, as well as allowing young people to earn while they learn. They have the ability to attract the widest cross-section of society, and they benefit disadvantaged young people more than any other group, making them a fundamental building block of levelling up and social mobility.
Today, I will talk about why apprenticeships are so important and how an increase in their number would benefit those outside London the most. Most critically, I will talk about why creating an undergraduate apprenticeship route into teaching is so important not only to the sector but to the enthusiastic young people it would attract and the wider economy.
Apprenticeships are a great part of individual development and are a unique route to gaining valuable skills. They cultivate knowledge, develop skills, allow young people to use their initiative to manage projects and develop good communicators who can make strong decisions and become role models to others. Importantly, apprentices can earn while they learn without acquiring university debt or a graduate tax, and they still get a degree qualification at the end of it. That means that apprenticeships can attract the widest possible pool of talent.
Better still, apprenticeships are great for employers. Hiring an apprentice is a productive and effective way to grow talent and develop a motivated, skilled and qualified workforce that can be moulded to an employer’s bespoke needs from day one. Furthermore, studies show that apprentices are far more loyal than university graduates. Perhaps our Prime Minister would welcome a few more coming through that route on to the Back Benches of the Conservative party.
Anthony Mangnall (Totnes) (Con)
My hon. Friend is making an excellent speech that I wholeheartedly agree with. It is deeply disappointing not to see a single Member of the Labour party, other than the shadow Minister, or of the Lib Dems in the Chamber. My hon. Friend is talking about the aspirational element of what apprenticeships can offer. Does he agree that it is essential that we ensure that local places of education are linked up with local businesses so that we can offer, present and platform those opportunities?
Mr Holden
My hon. Friend makes an excellent point. Studies show that more than half of young people looking to apply for higher education are interested in apprenticeships but they often find it difficult to access the relevant information. Some colleges and sixth forms are not interested in helping people pursue that option, and I will come to that later.
Apprenticeships are an effective means of achieving long-term growth and improved productivity—two of the core elements of what the Government are driving for. If we are truly to upskill our workforce while levelling up by turbocharging productivity and growth across the country, apprenticeships are absolutely key, especially in the education sector.
My successful apprenticeships fair with Derwentside College last year was attended by my hon. Friend the Member for Brentwood and Ongar (Alex Burghart)—the predecessor of the Under-Secretary of State for Education, my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis). Prior to that, he attended Parkside Academy in my constituency to talk to the young people there about apprenticeships as an alternative route to academic sixth form.
I recently held another apprenticeships and jobs fair at Crook in North West Durham to help forge connections between young constituents looking at post-school options and local employers. Derwentside College in my constituency is one of the best examples, and I urge the Minister to come and visit. It does excellent sector-based work academies and apprenticeships that are tied into local firms, like those that my hon. Friend the Member for Totnes (Anthony Mangnall) was talking about.
After seeing that at first hand, it is clear to me that having local apprenticeships working with local businesses is critical to boosting local economic activity. I am running a “How to run an apprenticeships fair” event for staffers in Parliament on 7 December, so if anyone wants to send their staff along, please do so. In constituencies across the country, we do not want to see young people constantly having to migrate in order to find work.
Anthony Mangnall
I apologise for having two bites of the cherry, but just two weeks ago I held my own careers fair at a local further education college—South Devon College—in my constituency of Totnes and south Devon. It was a fantastic example of how to join up local apprenticeships and local businesses and explore the opportunities in the area. Will my hon. Friend come down and see what we are doing in the south-west—a sometimes overlooked area—so that, across the whole country, we might join up this idea of linking up apprenticeships, colleges and businesses?
Sir George Howarth (in the Chair)
Order. Obviously, the decision whether or not to take interventions is for the hon. Member who is moving the motion. I would point out, however, that there are five people hoping to speak, and each intervention means that the time limit may be reduced for those people.
Mr Holden
Thank you for your guidance, Sir George. I will just say that, when I was in the Department for Education, I visited South Devon College with the then Education Secretary’s special adviser, and I can definitely recommend that my hon. Friend the Minister does so too.
Far too often we hear stories of young people leaving our communities, particularly in constituencies such as North West Durham, to go away to university. They are out of the jobs market for three years and sometimes end up right back where they started, having accumulated student loans in the process. A three-year residential course is not the right route for everyone—actually, it probably is not the right route for the majority of people—but at the moment, in too many cases, it is the only option for those who want to be seen to get ahead. That is specifically the case for the teaching profession, where there is not currently an undergraduate apprenticeship, although there is a postgraduate one. I want to see young people become apprentices so they can earn a degree and valuable skills while earning a stable income right away, rather than continuing on the traditional university route first.
Despite the multifaceted benefits that apprenticeships can clearly provide, we could do more to encourage apprenticeships, particularly in constituencies such as mine, which have seen apprenticeship starts fall in recent years. That really concerns me. I want to see as many people as possible in North West Durham, and across the country, in apprenticeships. The fall in apprenticeship starts also demonstrates that the north has the most to gain by increasing apprenticeships, particularly in areas such as teaching, especially if people can do them through local universities and schools so they do not have move away. If we want to look at different ways to deliver on levelling up, then increasing apprenticeships is critical.
Clearly, an undergraduate apprenticeship route into teaching is a no-brainer. Currently, someone who wants to be a teacher must have a degree and either do a postgraduate apprenticeship or a postgraduate certificate in education. That may make sense for a group of people for whom a few drinks is the right option for their first year at university and who then finally settle down to study, but many of my constituents need to be earning from day one. For so many young people who go into certain FE courses—particularly young women in my constituency—it feels as if their choices are limited from that point, especially if they are interested in education, as they cannot take the final steps into the full teaching profession.
As I have said, the traditional route is not the right one to ensure that as many people as possible can access the profession. That means we are missing out on huge talent in vast swathes of the population, some of whom might be some of the best teachers from the earliest stage of their career. We need to unleash the potential in this broader base of the population. That will also help the sector with vacancies, particularly in certain subjects, possibly including some technical subjects. I do not see any reason why we could not have some of the important academic subject bases as part of that mix; it is about design.
Mr Toby Perkins (Chesterfield) (Lab)
The hon. Gentleman raises an innovative idea. Will he expand on it a little? Previously, when we were looking at maths teachers, people who had a maths degree would be seen as suitable to do the maths part but would have to go away to do a PGCE in order to learn the teaching part. How does he foresee that we would ensure that people who had not done a degree were capable of providing that technical knowledge?
Mr Holden
The hon. Gentleman rightly picks up an important point about subject specialism, which I will come to a little later. We want to ensure that the teaching profession is delivering the full knowledge all the way down. I do not think that is necessary in exactly the same way for pre-school or, perhaps, primary school teachers; while they have to have subject knowledge, it does not have to be to the depth of degree level. I think that knowledge could be gained, perhaps, as part of a four-year teaching apprenticeship. In a couple of years’ time, doctors will be able to do degree-level apprenticeships —that provision has already been made—so I do not see why we could not have the same provision for teachers, particularly those teaching early years and in primary schools.
I have visited so many schools in my constituency since I was elected—about half my primary schools and all my secondary schools—and I have noticed that a lot of them have an early years setting alongside them. I make the point to the Minister that an early years teaching apprenticeship could be a first look at this, perhaps as a pilot scheme. So many people go in, perhaps with a level 2 or level 3 qualification, but that is where their opportunity ends. It is a particular issue when someone with qualified teacher status can look after 13 four-year-olds, whereas someone without qualified teacher status can only look after eight. Some of those ratios are really difficult; they restrict the ability to pay more, when childcare costs are already so high, but they also put extra costs on families. Providing an early years apprenticeship route could be part of the answer to the issues around childcare, which everyone knows is a major issue in the country at the moment, particularly with respect to cost.
The broader point is that having a degree apprenticeship would bring teaching into line with other professions. With accountancy, someone can get an Association of Accounting Technicians qualification and then go on to the full accountancy course. It is the same with architecture and engineering. Someone can go into the legal profession right at the bottom end and work their way through to becoming a fully qualified solicitor. No one is suggesting that those other sectors have a prestige issue. People can do apprenticeships all the way through those professions, but they cannot do one in teaching. That is a particular issue.
Peter Gibson (Darlington) (Con)
I can provide an example from personal experience in respect of the solicitor apprenticeship route. In my previous business, I recruited a young lady at the age of 18 who did not want to go to university. I am delighted to report that she is about to qualify as a solicitor, having gone through all the necessary steps.
Mr Holden
My hon. Friend provides a superb example of exactly what I am talking about. In the teaching profession and the education sector there are already a lot of people who have done level 3 qualifications, or even level 4 or 5 qualifications, in all sorts of teaching assistant and some advanced teaching assistant roles. That is a natural progression. It can be done in nursing as well, with healthcare assistants moving through into nursing. There are so many ways that this is done in other professions. We are almost holding teaching back from so many people with many different talents who just did not want to choose a particular route at age 18; we are stopping them being able to progress their careers.
For so many young people, an apprenticeship is a particularly good option if they need to earn while they learn. So many people in our communities, in constituencies such as mine, do not have the option of going away. Even if they would get all the support of student loans and grants, they want to be earning from day one. They may have commitments to their family that they want to maintain. The apprenticeship model might mean that they do not have to remove themselves from the job market in later life to go and do training or professional qualifications, because they can earn and learn on the job.
Having spoken to so many people across the sector about my plan, I have heard some reservations. The first is that apprenticeships would somehow dilute the teaching profession. The issue of prestige perniciously permeates apprenticeships across the board, but with companies such as Goldman Sachs now taking on apprentices and people able to do an apprenticeship to become a doctor, that is being eroded. That reservation is particularly frustrating because it is demonstrably untrue.
While a three-year residential degree and one year of training provide an in-depth understanding of academic study, surely four years of working in a teaching apprenticeship in a school environment, while doing those academic studies on the side, would help teachers get a greater understanding of teaching. That is particularly true for early years and primary, which I have already touched on.
What is more, the apprenticeship model already exists in the public sector. In 2017, undergraduate degree apprenticeships became the main route into nursing and, as I have said, the Department of Health and Social Care has approved an apprenticeship, to be rolled out next year, as a route to becoming a doctor. That addresses the grievances of those concerned about the lack of prestige or academic credentials. I understand those concerns. We want to ensure that people with really good subject knowledge are going into our professions. I just think that we can do that with a proper, well-thought-through degree apprenticeship route too.
While it is difficult to object to the idea of apprenticeships in principle, some have expressed concern about funding. However, this is where I am probably most optimistic about the viability of my proposal. Since 2017, the Treasury has allocated an annual apprenticeship budget to the Department for Education, which is used to fund apprenticeships at small employers and incentive payments, among other things. If it is not used by the end of the financial year, it is returned to the Treasury. I have spoken to Ministers and officials in the Department, and it is estimated that around £200 million in unused levy funds has been returned, although a specific freedom of information request recently suggested that the figure could be as high as £2 billion over a five-year period. There are hundreds of millions of pounds, at least, in the Department for Education’s budget to do this. Without having even to look far, we have a silver bullet to fund an undergraduate teaching apprenticeship pathway and unleash the potential of enthusiastic apprentices who could shape the future of the children of today and tomorrow.
One big issue with apprenticeships in general—I think this is one of the most important points—is that they are often not considered a prestigious option post-school. Schools often strongly encourage students to go down a traditional three-year residential university route, even though it might not be the best fit for them. That is natural—that is where all the teachers came from. Einstein’s definition of madness is doing the same thing over and over again, and expecting a different result. This is groundhog day in our education system. We put people who have degrees into schools and then, naturally, teachers say that is the route into teaching that people should go down. We need to stop doing this; it is a disservice to the people we are trying to represent and to apprenticeships more broadly.
If our children’s role models were themselves living examples of successful apprentices, that could surely change how apprenticeships are perceived, particularly in the education sector. Therefore, teaching apprenticeships could unlock a new generation of apprentices, not only in the teaching profession but more broadly in all sectors of society. That would address the broader issue with apprenticeships that results in them being seriously under-utilised and thus create far-reaching benefits beyond the teaching profession itself.
I believe that creating an undergraduate teaching apprenticeship degree route would have extensive and multifaceted benefits. It is an astonishingly simple solution to many issues in the sector, from getting people into apprenticeships who should be in them to helping out in the early years and with the financial pressures on families and, obviously, on the Government. It would boost productivity, it would provide a pathway into a well-paying job with a good pension for so many young people who have not historically gone down the teaching route, and it would really help to address some of the vacancies in our already overstretched teaching sector. Furthermore, it would create a route into teaching for enthusiastic young people who currently have no path to progression. Primarily, a teaching apprenticeship would benefit the most disadvantaged, who feel that they cannot afford to take a degree or that, for varying reasons in their lives, teaching has not been an option for them. Most importantly, there is already a considerable tranche of funding available to make this happen.
Finally, as I have already said, having apprentices as ambassadors in schools would provide a huge boost to the entire sector, reaching well beyond the profession itself. I want to see apprenticeship starts increase wherever possible. I know the uniquely valuable role that teachers play in children’s lives—both my parents were teachers—and I see this route into teaching as essential to helping us address some of the gaps that we see in our country at the moment.
Several hon. Members rose—
Sir George Howarth (in the Chair)
In order to try to get in everyone who has indicated that they want to speak in the debate, I will impose a time limit of five minutes on speeches. I will call the first of the two Front Benchers at 5.27 pm.
Jim Shannon (Strangford) (DUP)
Thank you, Sir George, for calling me to speak. I congratulate the hon. Member for North West Durham (Mr Holden) on setting the scene.
May I say what a pleasure it is to see the Minister in his place? We have become great friends over the last few years. I know he is a good man who will do a good job. If he were not a Minister, he would be on the Back Benches supporting us in this debate. He is very much poacher turned gamekeeper, so we are pleased to see him in his place and we look forward to his contribution.
There are certain professions that are not jobs but callings or vocations, and teaching is one of them. Although I adore my grandchildren and enjoy giving talks to classes interested in politics, I can think of nothing more challenging than teaching nine classes of 30 different children five times a week. To progress those children, to understand how best they learn, to be able to teach the brightest while bringing along those who struggle—it is all beyond me. I really applaud the teachers who are involved in that—well done.
In these debates, I always try to give a Northern Ireland perspective. I do it to add to the debate, ever mindful that the Minister does not have any responsibility for education in Northern Ireland, because education is a devolved matter. It is getting much harder to be a teacher in Northern Ireland, as the needs of our children have changed. Statistics released by the Northern Ireland Education Authority in January outline those changes, with a 26.4% increase in the number of pupils accessing a placement in a special school since 2015-16, and a 24.1% rise in the number accessing a placement in special provision in mainstream schools. Other statistics show that 20,505 pupils have a statement of need where there were once only 16,500, an increase of 23.7%.
That is not the subject of the debate, of course, but I say those things to give a perspective on how education has changed since I was young. Any teacher training now does so in the knowledge that they will have to teach the subject they choose to pupils with a range of skill levels and learning processes in one classroom. An essential component of making that work are the classroom assistants who aid those children who need to learn differently. There is a lot of pressure on the teacher to know how best to utilise that help in the classroom. The classes are large and the teaching aids and funding are low. Schools are feeling the pinch. It is quite a grim picture. I have served on the board of governors of Glastry College for nearly 36 years, and in that time I have seen how the needs and demands of the pupils, parents and teachers have changed.
In England, the pupil to teacher ratio has increased from 17.6 in November 2010 to 18.5 in 2021, and the teacher vacancy rate has risen over that period. I believe those things are linked, with greater pressure on time spent outside the classroom for teachers and, increasingly, for classroom assistants. That must change through increased funding, which would reduce class numbers and increase classroom assistants’ hours in class and time for preparation. I know the Minister is keen do that, and I believe he will. Every penny spent on education is a penny invested in our children and, subsequently, in ourselves and the future of this great nation.
It is time that we again focused on the outcomes for us all, which would be better if a teacher were not singlehandedly trying to teach 30 children with three different teaching needs and a number with behavioural needs. A rising tide lifts all ships. Minister, we must ensure that we can entice people who love education and children into teaching, by showing the support and help that will be granted to them, not simply in private schools, if they can get a job there, but in every mainstream school in this nation. The job is clear; the question is whether the Government will put their shoulder to the plough and deliver. Knowing the Minister as I do, as a friend—I welcome him and wish him well in his new role—I believe that he will be the first to do just that.
Ben Bradley (Mansfield) (Con)
It is a pleasure to serve under your chairmanship for the second time today, Sir George. I thank my hon. Friend the Member for North West Durham (Mr Holden) for bringing forward this important debate. I will focus today on education, but I also totally agree with what he said about the apprenticeship levy and the opportunity, by making that more flexible, to open up a range of employment and training opportunities that do not currently exist. We should definitely have done that a long time ago, to be honest.
There are two things I wanted to raise today. The first is helping people to access teaching as a career, regardless of background. Insistence on degree qualifications makes for a less diverse workforce, although not less diverse in terms of physical characteristics—which the Minister knows I have all sorts of issues with, which I will come to in a minute—but less diverse in terms of background, views and experience.
Other areas of education, such as independent schools and colleges, are free to bring in a broader range of teachers and lecturers with different backgrounds. We regularly see colleges bringing in people from industry, for example, into teaching settings. That is sometimes to support more vocational or technical qualifications, or to support and advise on business or getting into private sector roles or entrepreneurship. I often hear businesses say that schools struggle to teach effectively about being in business, about entrepreneurship, and about being work ready and the expectations of private sector employment. In reality, that is less about qualifications and more about engagement, character and extracurricular interests.
Many groups and charities are working to get more business experience into schools, which is good. Even better, we could get that experience into teaching. To have a wider variety of routes and ways to get into teaching, without having to take years out to take a degree, would be incredibly beneficial. Giving schools more flexibility to employ a wider range of people would also be beneficial. It would help us to give our young people a wider range of options, as my hon. Friend the Member for North West Durham said, and a wider and better range of careers advice.
Often, the most effective role models for young people are those from their community. A young person who grew up on an estate who has done well, and who is capable and engaging and understands the local context and issues, is perhaps better placed than a graduate from another, very different area to mentor young people—to be a role model. Often, people get to grips with learning and qualifications later in life, having struggled at school. That is particularly true in very disadvantaged communities, where levels of post-16 qualifications can be very low. People being able to access teaching through apprenticeships and shorter courses, to transition from other sectors such as business, to work as a teaching assistant while they learn and qualify on the job, and opportunities such as those would help those people to get on, to give back to their community and to teach where they grew up, instead of going to do something else elsewhere. I extend that to other professions, as well—the police, for example. I would make the same case in that sector, but I do not have time to go into that today.
In other areas of education, having new ways into teaching could be hugely beneficial and create new opportunities. Just last week, I visited Crocodile Rock Day Care, an early years setting in Mansfield, where we spoke about a variety of things, including the challenge of recruiting and retaining staff. We spoke about the challenge of offering appropriate training and development with very tight budgets, and how many staff in the sector end up moving into retail or going to work at Amazon because it is better money. If those young people entering early years education could progress into primary teaching, for example, by learning on the job—by transferring their training and qualifications in early years to schools through apprenticeship-type options—we could open up a whole world of new opportunities, and also improve recruitment and retention in the sector.
If people could progress from an entry-level role in early years education to become more experienced and qualified, work in a nursery or reception setting at a school, gain experience with older children, learn as a teaching assistant and become a newly qualified teacher, and do all of that on the job, it would mean people would not have to take career breaks to requalify. It would also remove financial barriers and enable people to progress in settings within their own community—the community that they most care about—and then perhaps teach in their own area, not leave and go somewhere else. That is a real challenge for schools, particularly those in disadvantaged communities, so I hope the Minister will take those points away. I fully support what my hon. Friend the Member for North West Durham has said.
In the short time I have left, the second thing I want to raise with the Minister is the importance of male role models in teaching, which relates to this teacher training issue. I do not need to go into my issues with the Equality Act 2010 and the perverse outcomes it has led to: there are countless examples of trying to support women into university or into science, technology, engineering and mathematics, for example, but next to no examples of trying to support young men into teaching, even though the profession is 75% female, and even more so in primary education.
In the east midlands, 30% of schools do not have a single male teacher. That is really upsetting when we consider that in some of the most disadvantaged communities, that male teacher might be the only decent role model that a young man has. It is difficult and confusing to learn how to be a man in modern society when there is no male role model, or when the male role model at home is involved in domestic violence, for example, or unhealthy relationships. Where do young men learn those things from? I ask my hon. Friend the Minister to also take that point away, and look at how we might encourage more male role models for the children in those disadvantaged communities who most need them. Most importantly, as my hon. Friend the Member for North West Durham has said, we need to open up access to teaching to a much broader range of people, to make that easier for all our communities.
Mrs Flick Drummond (Meon Valley) (Con)
It is a pleasure to serve under your chairmanship, Sir George. I congratulate my hon. Friend the Member for North West Durham (Mr Holden) on securing the debate.
We all know good and bad teachers: they shape our lives, and therefore can be considered the most important influence after parents and carers. Our economy depends on skills and apprenticeships, and I welcome ways into career paths that open them to people from a range of backgrounds. However, I have huge concerns about the number of ways of getting into teaching, and whether they all guarantee the preparedness of teachers. Depending on what equivalence we attach to similarly operating pathways, there are around 10 ways of getting qualified teacher status. It is now proposed to introduce a level 5 associate teacher apprenticeship aimed at teaching assistants, both as a route into teaching and a continuing professional development activity. We should remember that most TA roles are based on a level 3 qualification, or level 4 in some cases.
If, as I have said, teaching is the most important influence, we should be making sure that teachers are well trained and motivated. Teaching is a vocation, but that does not mean that everyone is good at it. There needs to be rigorous training over years to enable good teaching, which includes child pedagogy. It requires a mixture of sciences, such as child development, as well as subject teaching. Finland, which comes top of most education surveys, has primary school teacher training for four years and secondary school teaching programmes for five years. Candidates then have to do a year of pedagogical training; alongside that, they do a research thesis on a topic of their choice and spend a full year teaching in a university-affiliated school before graduation.
This gives status to teachers, and confidence that teachers are well prepared. Compare that with the lack of that foundation in some routes in England, which particularly concerns me, because we cannot rely on stretched schools and their teachers to provide additional support to newly qualified teachers who are expected to learn from others on the job. Additionally, we cannot put children and young people in a position where they may have an unqualified or struggling teacher for a whole year. The new apprenticeships specification builds in so much overlap with the qualified teacher status that it is inevitable that the distinction will be lost or overlooked.
We lose far too many of these valuable recruits early in their careers because they feel unprepared in the classroom. The average rate for teachers leaving the profession is around 10% per year. However, among early career teachers the rates are a lot worse; some 12.5% have already left within a year of qualifying. Some 17%—
Mrs Drummond
No, we do not get a minute back in here, I am afraid.
Some 17% will have left within two years. After five years a third have left, and 40% of teachers who qualified 10 years ago have left teaching. Besides being a failure of current policy, this also undermines our ability to develop a cadre of experienced teachers who can help the next generation.
I am a huge fan of apprenticeships, vocational education and learning while working, but the stakes are so high in education that we must be cautious. Classroom-based professional development can help qualified teachers learn themselves and stay in teaching, but it is not a substitute for giving teachers a solid foundation at the start. We certainly should not be circumventing routes to it, which I am concerned the kinds of apprenticeships now being proposed will do.
Peter Gibson (Darlington) (Con)
It is a pleasure to serve under your chairmanship, Sir George. I begin by congratulating my County Durham colleague, my hon. Friend the Member for North West Durham (Mr Holden), on securing today’s important debate.
Over 30,000 individuals enter initial teacher training in England each year through several routes. However, it is regrettable that in general, over the past decade or so, the overall number of qualified teachers in state-funded schools has not kept pace with increasing pupil numbers, with recruitment and retention of teachers still being a significant issue. This is of particular concern in the north east, where we have seen the sharpest reduction in the number of teacher training places in the country, with nearly a third of our places at risk. With 92% of teachers in the north-east coming from the north-east, we know that this will result in reduced teacher supply, and significantly impact the ability of schools in the north-east to continue to improve and develop. Given that we know schools in disadvantaged areas have the greatest problems in recruiting staff, the impact on disadvantaged children will be even more significant than on the system as a whole, compounding the problem.
With this in mind, I have been made aware of a number of concerns about the recent re-accreditation process for providers of initial teacher training. I will take this opportunity to highlight the issues Carmel College in Darlington is currently experiencing. Carmel College’s teacher training programme has been running for 20 years, delivering over 100 new teachers each year. I am deeply concerned that this outstanding school in my constituency now faces the removal of its teacher training accreditation from 2024. It is essential that outstanding schools such as Carmel College are able to continue their teacher training programmes, so that we can ensure that children in the north-east are not let down because of a lack of teachers to fill vacancies. I greatly appreciate the engagement that I have already had on this issue from the Minister for School Standards, my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), and I wish Carmel College good luck in its appeal.
More generally, I am committed to helping the people of Darlington to secure employment and training opportunities. Further to this aim, and like my hon. Friend the Member for North West Durham, who led the debate, I recently hosted my second apprenticeship and training fair at Darlington College. I was delighted to have almost 50 organisations represented, which were collectively recruiting for well over 700 opportunities in and around Darlington, alongside helpful tips and advice for job seekers. Such events are hugely important for ensuring that our constituents are fully aware of the job opportunities and training available to them to enable them to reach their full potential. The apprenticeship levy allowance has been a great tool for encouraging employers to commit to apprenticeships, allowing them to fund apprenticeship training or else lose the funds.
While apprenticeships are a great way for schools to improve the skills of their non-teaching employees, the funds are not currently available for schools to fund teacher training costs, which seems a missed opportunity. I encourage the Minister to look at the feasibility of that measure. We must ensure that we can tackle shortages in teachers if we are to enable children up and down the country to fulfil their potential.
I want to see us encouraging more businesses to establish apprenticeships and opening up more opportunities for people seeking employment and training. I know that the Minister and this Conservative Government share those views, and I know the Minister will have listened closely to all the contributions today. I look forward to hearing his response to this excellent and timely debate.
Mr Toby Perkins (Chesterfield) (Lab)
It is a great pleasure to serve under your chairmanship, Sir George. I congratulate the hon. Member for North West Durham (Mr Holden) on securing a debate on this important matter. Apprenticeships are dear to many of our hearts. The pressure on teacher numbers is also an issue we are all very conscious of. I welcome the fact that the hon. Gentleman was able to secure this debate. It is a shame that the “back frack or sack” debate in the Chamber has overwhelmed many of us. As a result, there were rather more Labour Members there, and maybe some Conservative Members were hiding away in here. I cannot imagine that there is anyone here who does not want to let everyone know what they think about fracking, but we never know—it is possible.
The hon. Member for North West Durham raised some important points. I want to dwell on the importance of apprenticeships for learners from deprived communities. He is absolutely right that level 2 and 3 apprenticeships are incredibly important. There are real issues in the expansion of level 6 and 7 apprenticeships; there has been a huge middle-class grab of those. I welcome degree apprenticeships, but we need to be careful that we do not end up with a twin-tier system where level 2 apprenticeships are for working-class kids and level 6 and 7 apprenticeships are what someone does if their parents are ambitious. None the less, his central point about the value of apprenticeships is an important one.
The hon. Gentleman touched on the fact that apprenticeship numbers are falling. At our recent conference, the Labour party outlined new proposals on flexibility around apprenticeships. The apprenticeship levy is not working in its current format, and we want to see apprenticeship numbers driven up. He was right to say that.
I take this opportunity to welcome to his post the Under-Secretary of State for Education, the hon. Member for Stoke-on-Trent North (Jonathan Gullis). I hope that he lasts rather longer than the Home Secretary, the right hon. and learned Member for Fareham (Suella Braverman), appears to have. I know he has great passion in this area, and we look forward to hearing his thoughts going forward.
The hon. Members for Meon Valley (Mrs Drummond) and for Strangford (Jim Shannon) spoke of their commitment to apprenticeships. I know that commitment is found across the House.
The hon. Member for Mansfield (Ben Bradley) is a great example of someone who covets another job when in one; throughout the years I have known him, he seems to have been almost constantly campaigning for the next job. I know he would like to be my Mayor in Nottinghamshire in the future, and will no doubt have been hugely excited about Labour’s announcement of devolution of skills funding to Mayors at our recent conference. Whether he gets that opportunity, time will tell, but I know he has a genuine commitment to this area of policy, and it was good to hear his contribution.
The hon. Member for Darlington (Peter Gibson) made a point about the retention of teachers, mentioning that the sharpest reduction in teacher training is in the north-east, and that there are often particular pressures on teacher recruitment in town communities and areas that are further away from universities. That is an issue of real importance. The hon. Member for North West Durham talked about the value of apprenticeships; I completely agree with what he said. Apprenticeships are a hugely important opportunity for people to work while they learn. Ensuring that both employers and learners get access to those opportunities will be a key priority for the Labour Government. A lot more can be done to ensure that all students coming out of school are aware of apprenticeship opportunities, which is a real passion of mine.
There is a particular missed opportunity for public sector apprenticeships. I asked a number of parliamentary questions to the Minister’s predecessor, the hon. Member for Colchester (Will Quince), about the amount of levy left unspent in the public sector. I was shocked to discover that the Government did not have those figures to hand. I had to try to establish them on an organisation-by-organisation basis. It should be a matter of strategic interest to the Government.
Our health sector trusts, which pay huge amounts of levy, also have a huge staffing crisis. How much do they have unspent every year in their apprenticeship levy pot? In that context, the hon. Member for North West Durham made an important and innovative suggestion for teacher training. We need to think a huge amount more about how to do it, but he has raised a topic of real importance. It is vital that we attract more people into the teaching profession, and such innovative solutions are definitely to be explored.
Over the past decade, the number of qualified teachers in state schools has fallen behind increasing pupil numbers. At one time, it was guaranteed that there would be no more than 30 pupils in a class, but that is now commonplace in schools that I visit. The rising teacher vacancy rate over that period has seen more and more schools struggling to recruit. I have met schools in my constituency that have advertised vacancies two or three times and not had a single application. We need to stop for a moment and consider why that is. Is it the workload, the burnout that teachers experience, the highly pressurised environment, or the extent to which schools have become extensions of social work services? Rising poverty means that schools are expected to feed as well as educate our children, which is a massive social problem. It no doubt has huge consequences for teacher retention.
We have a great generation of teachers, but never have the Government expected so much while offering so little. Many teachers in my constituency, knowing about this debate, wanted me to express the sense that they are drowning in work and facing unimaginable pressures, due to the crisis in children’s mental health, the cost of living issues, and the number of families struggling to feed themselves and afford the basics. Our teachers are very much on the frontline of that economic crisis. It is crucial that we recognise the vital role that teachers play in our communities and do more to address the poverty behind many of those issues. We need to recognise the shortage of teachers that we have.
The last large-scale survey of teachers, administered by the OECD in 2018, found that full-time secondary teachers in England reported working on average almost 50 hours a week. Full-time primary teachers reported working 52 hours a week—more than any other participating country except Japan. In our country, the amount of time that pupils spend in school is less than it is for many of our competitors, but the amount of time our teachers spend working is more. That is simply a recipe for failure.
Recent recruitment campaigns to the teaching profession have tended to target those already in work, but many of the desired recruits, as the hon. Member for North West Durham said, will already have family commitments and all the other expenditure that makes it difficult to get away from the world of work to pursue full-time education. I absolutely agree with the principle that non-possession of a degree should be a barrier only where there is a specific reason why a degree is needed. I am someone who never went to university, and yet, despite having been a senior manager in business, I know from subsequently attempting to get into the public sector that there were a number of jobs there that I did not even have a chance to apply for, regardless of my abilities, because I do not have a degree.
The Labour party views apprenticeships as the gold standard, so we want to see further investigation of these important ideas, but there is a number of considerations that will need to be made to make the idea work. In conclusion, we are broadly supportive of the suggestion of apprenticeships for teacher training and we look forward to exploring these ideas in future.
The Parliamentary Under-Secretary of State for Education (Jonathan Gullis)
It is an absolute pleasure to serve under your chairmanship, Sir George, and to make my first appearance as the Minister for School Standards. It could not have been sweeter that it was my next-door neighbour in the parliamentary offices, my hon. Friend the Member for North West Durham (Mr Holden), who managed to get me at the Dispatch Box in Westminster Hall for the first time. I thank him and I thank his parents, who are obviously excellent teachers, for producing such a wonderful son. Most importantly, I thank all the teachers, teaching assistants and support staff who time and again go above and beyond in their incredible dedication to those amazing young people, who will be the future of our country and drive that economic growth that we are so keen to see.
This important debate has been secured by my hon. Friend, who is not just a great champion of his local schools, having visited 22 out of 40 in his constituency to date, but the co-chair of the all-party parliamentary group on apprenticeships. I was a member of that group for a period of time before starting in this role. I want to put on the record the fact that I am lucky, as the representative of Stoke-on-Trent North, Kidsgrove and Talke, to have my own apprentice in my parliamentary office. Jessica is on the verge of completing her qualification, and I felt that I could not preach about apprenticeships if I was not going to support one myself.
The debate is an important one, and my hon. Friend will know that there have been over 13,000 apprenticeship starts in his constituency since the beginning of 2010. They have provided fantastic opportunities for his constituents to enhance their careers and, as he says, earn while they learn. The Government are committed to providing world-class education and training for everyone, whatever their age or stage of life. Since 2015, we have transformed apprenticeships into a prestigious, sought-after option designed to meet the needs of employers and learners across the country, and we have seen over 2,600 starts on the level 6 teacher apprenticeship since its inception in 2017.
Thanks to our transformational reforms, millions of people in a wide range of sectors have benefited from these industry-led routes to earn and learn. In the last academic year, there were 37,000 new trainee teachers—10% more than the last pre-pandemic cycle in 2019-20. To support this, we recently announced a new package of financial incentives worth over £180 million for the 2023-24 academic year. That support for teacher training will include bursaries worth up to £27,000 and scholarships worth up to £29,000, and these incentives will encourage talented applicants to teach key subjects, such as chemistry, physics and mathematics. We are also offering a £25,000 bursary for geography and languages, a £20,000 bursary for biology and design technology, and a £15,000 bursary for English, all of which will be tax free.
I should declare an interest, having been a teacher myself and having got my postgraduate certificate in education at the Institute of Education only in 2011. Never in my wildest dreams—or theirs, probably—would I have thought that I would be standing here as the Minister for School Standards, and I am absolutely honoured to be guiding that next generation of young teachers on their journey, because they are so important.
I am very grateful for the time that my hon. Friend spent at the Department, meeting me and officials on 22 September. I heard and learned more about his idea and what could be done. I will set out the work that the Department has undertaken to date to consider that option. Between 2018 and 2020, a sector-led trailblazer group considered the viability of an apprenticeship with a pre-degree entry point leading to qualified teacher status. In 2020, after detailed consideration and wider stakeholder engagement with initial teacher training providers and schools, including a survey among headteachers, the group rejected the creation of an undergraduate teacher apprenticeship. That was due to its prohibitive costs, the duration required and insufficient demand from the sector.
The Department is always willing to listen to the sector, and as the Minister for School Standards I am absolutely putting teaching degree apprenticeships on the table. However, I need to ensure that there are benefits and take account of the wider views of schools, pupils and prospective teachers.
Mr Perkins
When the Minister says there was insufficient demand in the sector, does he mean there was insufficient demand from people wanting to study and pursue that route, or was there insufficient demand from schools to take on apprentices?
Jonathan Gullis
I thank the hon. Gentleman for giving me the opportunity to clarify. From my understanding, it was headteachers who reported that there was not a massive desire—and nor did they believe that there would be—within the sector. The cost was definitely the main problem. A regular apprentice gets 20% of time off to undertake further learning, but that figure is 40% when applied to the school year, because there are 13 weeks when teachers are not physically in the classroom with their pupils. The cost to a school was felt to be too great to have someone off timetable for 40% of the time. However, allowing a teaching assistant to take a teaching qualification through a level 5 apprenticeship, which we are exploring, could be a way to deliver teachers through an apprenticeship scheme. We would be using people who are already in the school system—those 200,000-plus teaching assistants who do a fantastic job up and down our country.
Where there is employer demand for new apprenticeships in education, including a route to teaching for those without a degree, we will work with employers and the Institute for Apprenticeships and Technical Education to consider how those proposals could be delivered. We are currently engaging in detailed work with a new trailblazer group to explore the viability of the new apprenticeship standard at level 5. That apprenticeship would enhance training opportunities for existing teaching assistants. It would also offer a route for high-potential individuals without an undergraduate degree, providing them with a career pathway to gain a qualification to train to teach.
I look forward to continuing discussions with school leaders, the Institute for Apprenticeships and Technical Education and my hon. Friend the Member for North West Durham on how best to support talented non-graduates to gain the necessary qualifications to train to teach.
I want to ensure that I address the points raised by hon. Members, because that is important. I thank my good friend, the hon. Member for Strangford (Jim Shannon), for his kind words and his continued passion for state education, a sector that I am proud to have worked in for eight and a half years. To declare an interest, my partner is a member of that sector as well. It is a fantastic career. I hope that anyone watching today who is not yet a teacher will be able to understand what a great profession it is. Not only is the new starting salary for this academic year over £28,000, but I have supported the pledge in the 2019 Conservative manifesto to ensure that a £30,000 a year starting salary is enacted for the next academic year.
On top of that, there are bursaries. The levelling-up premium is available in education investment areas. That can give someone up to £3,000 tax free, on top of their salary, depending on the subject they teach. We should really promote that. I believe that take-up is really good so far, but we are checking those numbers. I want every Member in those education investment areas to drive those reforms by getting people to sign up as quickly as they can.
My hon. Friend the Member for Mansfield (Ben Bradley) is a fine champion for his local area, and I am glad to have been able to spend time with him to learn about the work he has been doing for education. We have no plans in place yet to look at what we are doing specifically for men. However, my team in the Department are looking at diversity, which is not just about ethnicity; it is about gender as well. It is about men getting into the profession, particularly in primary schools, as well as women getting into leadership roles in the sector. It is also about socioeconomic backgrounds and those white, working class, disadvantaged boys who we want to see representing the profession in schools, as well as people from other ethnic minority groups who, tragically, are falling out of the profession at a quicker rate than their white counterparts. We are going to do a big piece of work in that area. I look forward to visiting Lambeth Academy tomorrow to meet Leon, one of those inspirational headteachers, and understand what he has done throughout his career journey.
I know that my hon. Friend the Member for Meon Valley (Mrs Drummond) was a teacher—
Jonathan Gullis
They were the ones I dreaded when I was in the classroom. It is absolutely brilliant that she has that insight into the profession. I understand the importance of maintaining that high-quality education and ensuring that that the skill and knowledge base is there, particularly with the important reforms that we have made to GCSEs and A-levels. That is why I am certainly intrigued to explore further what my hon. Friend the Member for North West Durham said about primary education as potentially a pilot route.
Ben Bradley
I thank the Minister for giving up a few seconds. On the primary environment—the hon. Member for Chesterfield (Mr Perkins) touched on this earlier—the challenges in disadvantaged communities mean that teachers are often seen as social workers, and some of the issues that come through the door are more akin to those experienced in an early years setting than in what we would traditionally associated with a teaching setting. Does the Minister agree that the opportunity to drag people from those care and early years settings and place them in those primary environments might be of huge benefit? That is slightly separate to the discussion about academic excellence and brilliance at post-16, which has been mentioned.
Jonathan Gullis
My hon. Friend makes fantastic points. I visited a school in Wolverhampton recently to hear how the multi-academy trust had hired its own social worker to work among its schools. I found that very inspiring. Absolutely, looking at how we can build that relationship between the early years sector and the primary school sector—that knowledge base, that understanding and that familiarity with the local people—is so important.
My hon. Friend the Member for Darlington (Peter Gibson) is a doughty champion. He has been lobbying and banging the door over Carmel College and its fantastic CEO, Mike Shorten. We know that an appeal is coming, so my hon. Friend will appreciate, as I have said before, that I cannot make any comment, but his and Mike’s comments have been heard and will be taken into consideration when the appeal is made.
I am grateful to the hon. Member for Chesterfield (Mr Perkins), who also represents Staveley, for his kind words. I am sad that my natural counterpart, the hon. Member for Portsmouth South (Stephen Morgan), is not here. I assume that he is still in detention with the Commissioner for Standards, having been a bit of a naughty boy recently when he sent a letter about me to The Guardian before she had made a comment. However, I really do appreciate the opportunity to hear the fine words of the hon. Member for Chesterfield and about his passion for level 2 and level 3 apprenticeships, which are absolutely important and should not in any way be seen as unimportant by this Department. Yes, we have put a lot of work into the degree level, but we want those take-ups at level 2 and level 3, and we are very pleased that that is continuing.
Finally, on teacher numbers, we have 466,000 full-time teachers on the books. That is a record number and 24,000 more than in 2010. While there are, of course, rising teacher vacancy rates, it is important to understand the context. The situation across all sectors is challenging, but I will ensure that we challenge that head-on with recruitment and retention strategies.
Mr Holden
I welcome the Minister’s pledge to continue to engage. I thank all hon. Members who took part today. Some important matters were raised.
The hon. Member for Strangford (Jim Shannon) raised teacher workload. In an intervention, my hon. Friend the hon. Member for Totnes (Anthony Mangnall) raised the importance of getting employers working with colleges and dealing with apprenticeships. My hon. Friend the Member for Darlington (Peter Gibson) mentioned recruitment issues. My hon. Friend the Member for Meon Valley (Mrs Drummond) spoke about how we have to ensure that standards are maintained at all costs, to ensure that children get the education they need. My hon. Friend the Member for Mansfield (Ben Bradley) spoke of being a champion of real diversity in the teaching profession and in communities.
It was also good to hear from the hon. Member for Chesterfield (Mr Perkins) that the Labour party is open to this, too, and want to look forwards. I share some of his concerns, in particular about things such as executive MBAs and cash from the apprenticeship levy being used for them by some very high-end companies, instead of driving skills for the people who really need them. I also welcome my hon. Friend the Member for Keighley (Robbie Moore), who I think is in his first gig as a Parliamentary Private Secretary, sitting behind the Minister.
In conclusion, I say to the Minister that there have been studies on this matter. I ask him to reach out to the vice-chancellor of the University of Gloucestershire. It was doing work with multi-academy trusts in this space, and I think there is a lot more that can be done. I do not expect the Minister to rush into anything, but I think that this is a real opportunity for the entire sector to turbocharge apprenticeships and open up the profession to so many more people who would be great teachers.
Question put and agreed to.
Resolved,
That this House has considered Apprenticeships and teacher training.
Written Statements
(2 years, 1 month ago)
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Contingencies Fund Advance: Asset Purchase Facility
(2 years, 1 month ago)
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The Financial Secretary to the Treasury (Andrew Griffith)
The Bank of England’s Monetary Policy Committee implements its quantitative easing (QE) programme through a subsidiary entity known as the Asset Purchase Facility (APF). HM Treasury agreed to indemnify the APF against losses when it was set up in 20091.
To date, the APF has transferred circa £120 billion of excess cash to HMT from interest payments on purchased gilts. As QE is unwound and gilts are sold back into the market, this cash flow is expected to reverse. Further information can be found in HMT’s annual reports and accounts.
No provision for payments to the APF was made in HMT’s main estimate. However, MPC decisions since this time have meant the reversal of cash flows, not previously expected to impact this financial year, will begin in October 2022, when HMT will need to make a payment to the APF.
Parliamentary approval for additional capital of £828,267,000 for this new expenditure will be sought in a future supply estimate for HM Treasury. Pending that approval, immediate expenditure estimated at £828,267,000 will be met by repayable cash advances from the Contingencies Fund.
1 https://webarchive.nationalarchives.gov.uk/ukgwa/+/http:/www.hm-treasury.gov.uk/d/ck_letter_boe290109.pdf
[HCWS330]
East Kent Maternity Services: Independent Investigation
(2 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Dr Caroline Johnson)
I wish to inform the House that the independent review into maternity and neonatal services at East Kent Hospitals University NHS Foundation Trust has today published its report, which can be found here:
https://www.gov.uk/government/publications/maternity-and-neonatal-services-in-east-kent-reading-the-signals-report
NHS England commissioned Dr Bill Kirkup CBE to undertake an independent review into maternity and neonatal services at East Kent Hospitals University NHS Foundation Trust in February 2020, following concerns about the quality and outcomes of care. On behalf of the Government, I would like to thank Dr Kirkup, the families, and all those who contributed to the report.
The report details the poor maternity care that over 200 families received at East Kent Hospitals University NHS Foundation Trust between 2009 and 2020. The trust failed to provide safe care and treatment which resulted in avoidable harm for mothers and babies, causing tragedy and distress that no family should have to experience. I am profoundly sorry to all the families that have suffered and continue to suffer from these tragedies. I also wish to pay tribute to the families who have come forward to assist the review.
In line with the review team’s families first approach, I am pleased to hear that the families were able to see an advance copy of the report this morning ahead of the publication.
I, and the Government, take the findings and the recommendations from the report extremely seriously and I am committed to preventing families from experiencing the same pain in the future.
My Department along with NHS England has already established the independent working group, chaired by the Royal College of Midwives and the Royal College of Obstetricians and Gynaecologists. The independent working group will help guide the implementation and next steps of the immediate and essential actions from the Ockenden report and the recommendations from the East Kent report. The group has met twice to date, and the next meeting will focus on reviewing the recommendations for the East Kent report.
In March 2022, NHS England also announced a £127 million funding boost for maternity services across England that will help ensure safer and more personalised care for women and their babies.
I will be reviewing and considering all the recommendations from the report, and I will issue a full response once I have had time to consider the recommendations.
[HCWS329]
House of Lords
Oaths and Affirmations
Rwanda Asylum Partnership
(2 years, 1 month ago)
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Lord Dubs (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I think I am right in saying that this is the Minister’s first appearance in this post, so I welcome him and warn him of trouble to come.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, the Government remain committed to delivering the partnership between the UK and Rwanda, so we can break the business model of people smugglers and prevent further loss of life in the channel. Working together, the UK and Rwanda will help to make the immigration system fairer and ensure that people are safe and enjoy new opportunities to flourish.
Lord Dubs (Lab)
My Lords, that is of course the standard Answer. I had hoped for a little bit of a U-turn on this issue, but it seems there will not be one. The Government say that this is fully in accordance with the United Nations High Commissioner for Refugees, but the UNHCR disputes this. There is no basis in international law for our doing this, and we are made to look foolish and in breach of our normal traditions of human rights and a humanitarian approach to refugees. Is it not time for the Government to think again? This is not going to happen in any case, because the lawyers are going to stop it.
Lord Sharpe of Epsom (Con)
I remind noble Lords that Rwanda is a state party to the 1951 UN refugee convention and the seven core UN human rights conventions. It is also worth pointing out that, in September 2019, the African Union, the Government of Rwanda and the UNHCR signed a memorandum of understanding to set up an emergency transit mechanism to evacuate refugees and asylum seekers out of Libya. The EU has provided support and donated €12.5 million to the ETM through its emergency trust fund. The UNHCR also stated, in a 2020 press notice, that
“Rwanda has been welcoming refugees for over two decades … The country offers a safe and protective environment to all asylum seekers and refugees.”
There seems to be a degree of inconsistency in the UNHCR’s opinion.
Baroness D'Souza (CB)
My Lords, I have just returned from a parliamentary visit to Rwanda. Could the Minister clarify which authority in Rwanda would be responsible for determining refugee asylum status? What guarantees are there that the 1951 convention criteria will be faithfully followed? I say this simply because, during this visit, President Kagame said that he was looking for new skills and talents among the refugees or asylum seekers who might be arriving in Rwanda.
Lord Sharpe of Epsom (Con)
As the noble Baroness is aware, the foundation for this is a memorandum of understanding that, it is strongly believed, covers the various points that she made. I cannot answer precisely who is responsible at the Rwandan end, but there are teams of Home Office personnel in place who will also monitor progress.
Baroness Foster of Oxton (Con)
My Lords, most of the Rwanda Cabinet were refugees and understand the difficulties that people face, particularly coming from war-torn countries. Rwanda has moved forward massively from the days when it suffered war and genocide. Does my noble friend agree that we need to kickstart this process for illegal immigrants as soon as possible as we cannot sustain the levels as they stand and be seen to support people traffickers, who continue to make money on the backs of human misery?
Lord Sharpe of Epsom (Con)
I thank my noble friend for that question and I agree with her. The point of this policy is to break the vile criminal enterprise that operates in the channel. I think most noble Lords would approve of that aim. As to whether Rwanda is safe, which is the essence of my noble friend’s question, I say that it is a fundamentally safe and secure country with respect for the rule of law. She is right to point out that the majority of the Cabinet were refugees, and it is also worth pointing out that Rwanda has one of only two, I think, Parliaments in the world that has a majority of women sitting in it.
The Archbishop of York
My Lords, the UK’s population, about 67 million, is five times that of Rwanda at about 13 million. Yet Rwanda, which is a country far poorer than us, as has already been pointed out, hosts one refugee for every 90 people whereas the figure here is one refugee for every 500 people. I do not think I can put my hand on my heart and say that the UK is doing its bit in a global crisis. I wonder whether the Minister would like to say what we are going to do to play our part in taking refugees here.
Lord Sharpe of Epsom (Con)
The most reverend Primate refers to refugees, so I will too. It is fairly self-evident what we have been doing for refugees, including BNO passport holders from Hong Kong—over 130,000 such visas have now been issued—Ukrainian refugees and Afghan refugees. I remind noble Lords that at the moment the taxpayer is spending about £2 billion a year on this problem. This is about asylum seekers arriving from safe countries, and about trying to put the criminal gangs out of business.
Baroness Williams of Trafford (Con)
I think the House wants to hear from the Liberal Democrat Benches.
Lord Purvis of Tweed (LD)
I am grateful to the Government Chief Whip. I visited the reception centre in Kigali in June, and I asked about the legal basis of that centre, which is on a private contract on an annual basis that will run out in April. I saw no facilities for people who will be vulnerable or at suicide risk, and I have asked repeatedly in this House about the legal underpinning of the MoU. This House’s International Agreements Committee has today reported to say that it is unacceptable for measures such as this to be under an MoU rather than being under a treaty. Will the Government think again and allow Parliament to vote on, scrutinise and ratify this agreement if they believe that it is sound?
Lord Sharpe of Epsom (Con)
I thank the noble Lord for his two questions. First, he mentioned the risk of suicide. It is worth pointing out that the health and welfare of those in immigration detention is of the utmost importance. We have a dedicated welfare team on site at each immigration removal centre which is responsible for identifying vulnerable individuals and providing assistance to support an individual’s needs. I remind noble Lords that decisions will be taken on a case-by-case basis and nobody will be relocated if it is unsafe or inappropriate for them. With regard to the terms governing this, which was his second question, he will not be surprised to hear me answer that this is slightly above my pay grade, but I will happily take it back to the department.
Lord Ponsonby of Shulbrede (Lab)
My Lords, in a Written Answer on 13 October, a Home Office Minister revealed that, as well as the £120 million down payment on this policy, there was
“a £20m upfront payment to the Government of Rwanda to support initial set up costs.”
Is the Minister able to give clarity to the House on the full cost per person of this scheme and to say whether there will be further up-front payments?
Lord Sharpe of Epsom (Con)
I am afraid I am not able to comment on the cost per person; as of yet no one has actually gone, as noble Lords know, so it would be premature to do so. As the noble Lord points out, the UK has invested an initial £120 million into the economic development and growth of Rwanda, and £20 million has been committed to the centre described in the last question. It is an up-front payment to the Government of Rwanda to support initial set-up costs. As and when those other figures are available, I will come back to him.
Baroness Davidson of Lundin Links (Con)
My Lords, my noble friend the Minister knows that I am among a number on these Benches who are deeply uncomfortable with this policy and with some of the language used, even by those at the top of the Home Office, in discussing it. Surely the hundreds of millions of pounds already spent and earmarked for implementing this policy in future would be better spent here, speeding up the systems and processes at the Home Office so that decisions are made fairly and in good time and those in genuine need receive the security they deserve, while those with no grounds to remain are returned to their countries of origin and not a land they have no link to. I ask him to take this suggestion back to the department.
Lord Sharpe of Epsom (Con)
I understand the strength of feeling, so of course I will be more than happy to take my noble friend’s suggestion back to the department.
Baroness Hayter of Kentish Town (Lab)
My Lords, the Minister said that this was above his pay grade. Not only, as the noble Lord, Lord Purvis, said, does the report that my committee produced yesterday say that it is “unacceptable” that this should be by an MoU rather than a treaty—which means it does not come through this or the other House—but the Home Office declined the invitation to give evidence to us on its reason for avoiding parliamentary scrutiny by using an MoU. There is no excuse for that, and we deserve a reason why the Home Office has back-tracked and used not a treaty, as it should have, but an MoU.
Lord Sharpe of Epsom (Con)
As I answered to the noble Lord, Lord Purvis, I will absolutely take that back to the Home Office and see what can be done.
Lord Paddick (LD)
My Lords, the United Nations High Commissioner for Refugees, in a written submission to the High Court this year—not a previous year—said:
“There should be no transfers of asylum seekers from the UK to Rwanda under the UK-Rwanda Arrangement.”
It said there was “a serious risk” of human rights abuses and a serial disregard for international law in Rwanda. The UNHCR has clearly changed its mind. Why will the Government not change theirs?
Lord Sharpe of Epsom (Con)
My Lords, I have already stated that we are of the firm opinion that Rwanda complies with international law. I go back to my earlier answer: under the scheme I described earlier, the emergency transit mechanism under the aegis of the UNHCR, Rwanda has welcomed and integrated more than 500 individuals who were evacuated from Libya. Personally, I am at a bit of a loss to understand why the UNHCR seems to take this line with us when it is doing it itself.
Older Persons Commissioner for England
(2 years, 1 month ago)
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Lord Foulkes of Cumnock
To ask His Majesty’s Government what consideration they have given to the appointment of an Older Persons Commissioner for England.
The Parliamentary Secretary, Cabinet Office, and Parliamentary Under-Secretary, Department for Work and Pensions (Baroness Stedman-Scott) (Con)
My Lords, I fear I will disappoint the noble Lord, Lord Foulkes, because I must confirm that the Government have no plans to appoint an older people’s commissioner in England. The Government’s business champion for older workers, Andy Briggs, engages with business to promote the benefits of employing and retaining older workers in England. The Government are delivering a new enhanced support package for workers over the age of 50 to help them to stay in and return to work.
Lord Foulkes of Cumnock (Lab Co-op)
The Minister is right; I am really disappointed. I heard Heléna Herklots, the Welsh commissioner, speak to the National Pensioners Convention about how she seeks out ageism, tackles it and ensures that it is no longer continuing in Wales. Will the Minister at least meet a deputation consisting of representatives from this House and the other House, and the organisations concerned, so that we can persuade her that what is good enough for Wales—and indeed Northern Ireland—is also appropriate for Scotland and England?
Baroness Stedman-Scott (Con)
As I hope I have proved to the noble Lord on many occasions, I am very happy to meet him and others to discuss this.
Baroness Fookes (Con)
My Lords, can my noble friend tell me what opportunities there are for older people to receive education and training from her department? In that connection, may I point out that there are many vacancies in the horticultural industry for people whose great skills are required, and with good pay, contrary to popular belief?
Baroness Stedman-Scott (Con)
I am very pleased to say to my noble friend that we are investing £1.34 billion in education and skills training for adults through the adult education budget. We have the flexible support fund, which we can use on a flexible basis, and have launched a £2.4 billion national skills fund. On my noble friend’s point about the horticultural industry, there is a wide range of vacancies, all paying well. We think that people with mental health problems really benefit from being in that sector: I will cite one example. The lady Mayor of Merton has purloined half of a large allotment facility in Mitcham. She is a Labour mayor; her name is Joan and I think she is cracking. My sister, who has real difficulties, has one of the mayor’s allotments and it has turned her life around. She now has five customers whose gardens she does, so we are right behind this type of thinking.
Baroness Blackwood of North Oxford (Con)
My Lords, it is a rare occasion when you will find me agreeing with the noble Lord, Lord Foulkes, but on this occasion I would ask the Government to think again. We will all remember the horrific cases during the pandemic, when blanket DNACPRs were put out across care homes. I cannot help but think that had there been an older person’s commissioner in place, some of these cases would not have happened. We have also had the cases at Edenfield and across other care homes. Will the Minister please take this away again and reconsider cross-party working and representation for older people?
Baroness Stedman-Scott (Con)
I think the noble Lord, Lord Foulkes, has a recruit to his group. I hope that my noble friend will take up that opportunity. I am sure that, given the benefits of such a position as she described, it will be for her to build up the case and put that forward.
Baroness Gale (Lab)
Is the Minister aware that the commissioner for older people in Wales was first appointed in 2008, as the first such commissioner in the world? If the Minister looks on the website of Heléna Herklots, our commissioner for older people, she will see the valuable work that is done. The commissioner is a direct voice for older people to the Welsh Labour Government. I will read out her aims:
“I’m taking action to protect older people’s rights, end ageism and age discrimination, stop the abuse of older people and enable everyone to age well.”
Older people in Wales have this commissioner, so will the Minister consider again getting a commissioner for older people in England?
Baroness Stedman-Scott (Con)
I know that noble Lords like to get me into trouble but the fact of the matter is that the Government’s position, as it stands, is that there is no plan to introduce a commissioner. I have read the brief of the Welsh commissioner and tried to familiarise myself with her role. I suggest the noble Baroness joins the campaign of her noble friend Lord Foulkes. I will meet and I will listen.
Baroness Janke (LD)
My Lords, does the Minister agree that many of the issues facing older people, such as lack of affordable care, poor housing, pensioner poverty and isolation, require a cross-cutting approach if they are to be resolved? Would she agree that a strong independent voice for older people is needed at the highest level? If they do not appoint a commissioner, what will the Government do to make cross-departmental working a priority, end the marginalisation of older people and champion their needs?
Baroness Stedman-Scott (Con)
The noble Baroness has put forward reasons for having somebody to represent older people and I hear that. I am sure that by the time officials in my department have read Hansard they will have got the message, so please join the meeting. On the second part of the noble Baroness’s question, I am not able to commit to or confirm her request.
Lord Geddes (Con)
Would my noble friend agree that, if such a commissioner were appointed, he or she would have plenty of work in your Lordships’ House?
Baroness Thornton (Lab)
My Lords, I think the Minister has probably got the idea now that an old persons’ commissioner might be popular. I would have thought that the Government might be looking for popular things at the moment. Will the noble Baroness meet representatives of the WASPI women—the 3.6 million women whose pension age unexpectedly rose? I would also like the Minister to take this opportunity to clarify for the House whether the triple lock is to be kept or abandoned.
Baroness Stedman-Scott (Con)
On the request to meet the WASPI ladies, the noble Baroness will understand that I will need to go back and talk to our new Minister for Pensions. I will put that request in and come back to the noble Baroness; I will write and put a copy in the Library. In 2019, the Government were elected and committed to the triple lock. As our Prime Minister has confirmed today, we will honour that triple lock for 2023-24 and the remainder of the Parliament.
Lord Cormack (Con)
My Lords, could I make a gentle suggestion and say to my noble friend that I am very glad she is thinking of this again? There would be nobody more suited for this job—because he could do both Scotland and England—than the noble Lord, Lord Foulkes.
Baroness Stedman-Scott (Con)
Now the noble Lord, Lord Foulkes, has an agent for the job. I take my noble friend’s point.
Baroness Hoey (Non-Afl)
Is the Minister concerned about the way many older people these days are being forced to open a bank account, following the ending of the Post Office card? It is so difficult for someone living on only a very small pension. Would she look into this? It might be something an older persons’ commissioner would do if we had one.
Baroness Stedman-Scott (Con)
I thank the noble Baroness for her question. I am going to be absolutely straight; my knowledge about the change to bank accounts and the Post Office card is not as sharp as it should be. I thought we had put different things in place so that people did not suffer as a result. I will go back to the department, find out the exact position, come back to the noble Baroness in writing and place a copy in the Library.
Baroness Butler-Sloss (CB)
My Lords, is there a Minister for older people? If so, what does the Minister do, and if not, should there not be one?
Baroness Stedman-Scott (Con)
I am not aware of there being a Minister for older people—unless anybody else can help me out here. As for whether there should be one, I suppose at some appropriate point we might recommend that to the Prime Minister.
Lord Hamilton of Epsom (Con)
Does my noble friend not think that there are enough commissioners and quangos, at enormous expense to the taxpayer, already? Do we really need another one?
Baroness Stedman-Scott (Con)
There are a number and there is a cost associated with them. What we should do is look at the outcomes of their work to assess their value for money and the difference they make. I do not think I can say any more than that.
Workforce: Trades Union Congress
(2 years, 1 month ago)
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Lord Balfe
To ask His Majesty’s Government when the Prime Minister expects to meet representatives of the Trades Union Congress to discuss problems facing the workforce in the United Kingdom; and what measures they intend to take to alleviate those problems.
Lord Balfe (Con)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and draw attention to my entry in the register as president of a TUC-affiliated union.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the Department for Business, Energy and Industrial Strategy is responsible for labour relations and works closely with trade unions. Positive engagement is essential to developing and delivering our policies, and during the pandemic it helped to support jobs and keep workers safe. That engagement is ongoing and remains largely positive.
Lord Balfe (Con)
I do not think I can thank the Minister for that Answer because the Question was about when the Prime Minister was going to meet representatives of the trade union movement. I have come back from the Trades Union Congress at the beginning of this week, where there was dismay that a Government who are looking to build back better and make use of the resources of the British labour force are apparently treating the trade unions with something that approaches disdain and proposing to bring forward legislation that will do nothing whatever to improve industrial relations. So I ask the Minister to answer the Question: does he know when the Prime Minister will meet the TUC, and, if not, will he get on to Downing Street and advise them that they should?
Lord Callanan (Con)
I am sure that the Prime Minister does not need my advice as to whether she wishes to meet the Trades Union Congress. The direct answer to my noble friend’s Question is that I have no information that a meeting is scheduled or not.
Lord McNicol of West Kilbride (Lab)
My Lords, Frances O’Grady, the TUC general secretary, will be a welcome addition to your Lordships’ House. Last year, when talking about supply chains and employment, she said:
“Ministers may scratch their heads about how to protect supply chains and fill vacancies. Well, here’s a novel idea. Invite unions in with employers. Get us around the table. And let’s make that industry deliver decent conditions, direct employment and a proper pay rise.”
Does the Minister share my view that this is an eminently sensible suggestion, and will he action it?
Lord Callanan (Con)
We are always looking for helpful suggestions to improve supply chains. In fact, Frances O’Grady was in a BEIS meeting with one of my ministerial colleagues in August. We remain open to constructive meetings with trade unions where it is required.
Lord Fox (LD)
The noble Lord talked about opportunities for the supply chain. The biggest barrier to growth and prosperity in this country is a shortage of skills, so will the Minister take back the comment that the Government, trade unions and employers must work together to deliver the skills we need? Can the Minister tell us what new initiatives the Government are now bringing in place to deliver the skills that we so badly need?
Lord Callanan (Con)
Skills is an important part of the Government’s agenda; we are spending some £2.5 billion, directed through the Department for Education, on building up skills provision across the economy. We remain open to working with trade unions, employers and whoever has good proposals for the future.
Lord Hendy (Lab)
My Lords, this is not just a question of being “open” to working with trade unions; it is a question of whether the representatives of 30 million workers in this country should have a seat at the table to discuss with employers and with government the answers to many of our problems—which cannot be in doubt. Will the Minister reconsider setting up something formal between the TUC, the CBI, representatives of small business and government to look at the problems this country is facing?
Lord Callanan (Con)
I said that we remain open to meeting trade unions. However, the noble Lord’s figures are wrong: trade unions do not represent 30 million workers in this country; only 23% of workers are members of trade unions, so more than three-quarters are not represented by them.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, is the Minister aware that one of the problems facing workers is ageism? This could be properly dealt with if we had an older people’s commissioner.
Lord Callanan (Con)
I followed the previous exchanges with interest and fully endorse the noble Lord’s job application.
Lord Hunt of Kings Heath (Lab)
My Lords, the Minister made comments about the number of trade unionists. Many members of staff in the health service are members of trade unions. We have a situation where there is no funded workforce plan for the NHS, and we are importing doctors and nurses from many developing countries to make up in the shortfalls in this country. Is that not a priority for the Government to talk to trade unions about?
Lord Callanan (Con)
I am sure that my health department colleagues engage regularly with the trade unions. As the noble Lord says, the membership of trade unions is higher in many public services. I am sure that these contacts are ongoing.
Metropolitan Police: Misconduct
(2 years, 1 month ago)
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Lord Lexden
To ask His Majesty’s Government what assessment they have made of the interim report by Baroness Casey of Blackstock on misconduct in the Metropolitan Police, published on 17 October.
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, interim findings of the review done by the noble Baroness, Lady Casey, set out worrying failures of the Metropolitan Police Service to operate effectively within the misconduct framework and to tackle instances of sexual misconduct and discrimination. I welcome the commissioner’s response, ensuring that action to deliver change must, first and foremost, come from within the Met. The Government have announced an internal review into the effectiveness of the police dismissals process to ensure high standards across policing.
Lord Lexden (Con)
My Lords, does not this report make the most painful reading? It is painful for the Government, who have done little to bear down on police misconduct; painful for fine and trustworthy police officers, who have discharged their duty without fault over many years; and painful above all for those who have served as Metropolitan Police Commissioners. They surely have let down their fine, trustworthy colleagues, by turning a blind eye to the spread of crime and misconduct in the Metropolitan Police. Surely, there can be no doubt that the shocking features of Met activity set out in this report go back years. Will we hear explanations and apologies from those who have served as Metropolitan Police Commissioners in recent years?
Finally, can I seek some information from the Government? How many Metropolitan Police officers are at present under suspension? How many are on long-term sick leave? How many have resigned from the force within the last year while under investigation?
Lord Sharpe of Epsom (Con)
The noble Lord asks a number of questions and invites a number of responses. I shall confine myself to the data that he asked for at the end—and I am grateful to him for giving me advance notice of the data so that I could get the right answers for him.
The Home Office collects and publishes data annually on police officers on long-term absence, classed as those lasting at least 28 calendar days, by type of absence, including suspension and sick leave. This data shows that, as of 31 March 2022, the Metropolitan Police Service had 449 officers full-time equivalent on long-term sick leave and seven officers were suspended. The Home Office does not collect data on the number of officers who resign while under investigation, but I remind the noble Lord that, since December 2017, resignation does not preclude the force from pursuing misconduct proceedings against an officer. In 2021-22, the College of Policing’s barred list statistics show that 14 officers who had resigned and four who had retired would have been dismissed from the Metropolitan Police had they still been serving. These individuals are still placed on the barred list and still prevented from rejoining front-line policing.
I apologise for the long answer, but I felt that it was appropriate.
Baroness Chakrabarti (Lab)
My Lords, I pay tribute to the noble Lord, Lord Lexden, for his fearless efforts on this front over many years. Surely, we are all grateful to the noble Baroness, Lady Casey, for an interim report that appears to contradict the former Met Commissioner’s “few rotten apples” theory about the Metropolitan Police. Might the Minister reflect that, in the light of this interim report, now is not the time to hand even more draconian powers to an unreformed police service. The Government might be wise to swap legislation for the reform of police discipline for the Public Order Bill currently heading our way.
Lord Sharpe of Epsom (Con)
I am afraid that I am going to disappoint the noble Baroness and not agree with her, but I am going to say that I think that the Metropolitan Police Service’s response to the interim report is most welcome. The new commissioner, Sir Mark Rowley, has the full support of the Home Secretary in delivering his plan for transforming the Met, focusing on the key areas of more trust, higher standards and less crime. I hope that all noble Lords will welcome his initial responses, which have been broadly welcomed across the spectrum.
Lord Paddick (LD)
My Lords, Sir Mark Rowley has set out a bold plan to turn things around but, without very swift changes to police misconduct regulations and strong support from the Home Secretary, he will not achieve his objectives. Will he get them? Another review is just not good enough.
Lord Sharpe of Epsom (Con)
Again, I am afraid that I do entirely agree. It is also worth pointing out that the noble Lord omitted to mention the split of responsibility between the Home Office, the Mayor of London and the London Assembly. The Mayor of London is the occupant of the Mayor’s Office for Policing and Crime—MOPAC—which is the equivalent of a PCC for London. It is responsible for holding the Commissioner of the Met to account for the exercise of their functions and the function of those under their direction and control. MOPAC is also responsible for ensuring that the Metropolitan Police is efficient and effective in setting policing and crime objectives. There are a number of players in this particular space at the moment; they all have a job to do and, as I say, I welcome—and I think everybody should welcome— Sir Mark Rowley’s initial response.
Lord Kirkhope of Harrogate (Con)
My Lords, my noble friend has just rightly said that action should be taken. I think we all agree that those who transgress the high standards in public office should be dealt with and that lessons should be learned. However, is it not also right for us to acknowledge that the vast majority of serving police officers, men and women, serve this country with the highest levels of probity and public service, for which we should be enormously grateful?
Lord Sharpe of Epsom (Con)
I could not agree more with my noble friend and I am grateful for the opportunity to pay tribute to the vast majority of our police men and women in the Met and indeed across the whole country. They do a very difficult and often thankless job in often very difficult conditions, and they do it to a very high standard. I thank my noble friend for the opportunity to say that, and I thank those officers. I am sure that they are equally upset by this report’s findings.
Lord Ponsonby of Shulbrede (Lab)
My Lords, it may well be that the problems identified in the Casey report go beyond the Metropolitan Police. On this side of the House, we believe that the Home Secretary needs to personally take action. Will she now require all police forces to produce data and analysis of their misconduct systems in the same level of detail as in the Casey report, so that we can know what is happening in every police force in England and Wales?
Lord Sharpe of Epsom (Con)
The noble Lord makes some sensible suggestions and I refer back to the review that I referenced in my Answer to the original Question. I will quote the Statement made by the Minister of State for Crime, Policing and Fire:
“The Government will work closely with key policing stakeholders to examine evidence of the effectiveness of the system to remove those who are not fit to serve the public. As well as examining the overall effectiveness of dismissal arrangements”,
he expects the review to consider
“the impact of the introduction of Legally Qualified Chairs to decide misconduct cases; whether decisions made by Misconduct Panels are consistent across all 43 forces in England and Wales; and whether forces are making effective use of their powers to dismiss officers on probation. This focused review will be launched shortly and will be conducted swiftly.”—[Official Report, Commons, 18/10/22; col. 22WS.]
Lord Laming (CB)
My Lords, the House will recognise that the noble Baroness, Lady Casey, has done an excellent job in producing such a challenging and far-seeing report. But does the Minister agree that that is only the first stage? The really big test is whether the report will be implemented—and implemented thoroughly. I have not spoken to the noble Baroness, Lady Casey, before I say this, but would the Minister be willing to consider ensuring that she remains involved to ensure that her recommendations are carried through?
Lord Sharpe of Epsom (Con)
Obviously, I cannot commit to that, but I think the noble Lord makes some very sensible points. As I have said already in answering this Question, I am very encouraged by Sir Mark Rowley’s determined statement. Obviously, delivery is slightly different from making a statement, but he has certainly set out on the right road.
Baroness Williams of Trafford (Con)
My Lords, I think we have a bit of time, so let us hear from my noble friend Lord Hailsham, followed by the noble Lord.
Viscount Hailsham (Con)
My Lords, may I put to my noble friend a model that Parliament has established for other professions, such as doctors and nurses? He will know that when a complaint is made to one of those authorities, it can be very rapidly transmitted to an independent interim appeals body, which can make an interim order of conditions or suspension pending a proper investigation of the complaint. Is that not a model that we should consider? Although I recognise that there would have to be an independent authority to which the initial complaint is made.
Lord Sharpe of Epsom (Con)
I shall certainly take that suggestion back. I am sure that all options will be considered.
Lord Harris of Haringey (Lab)
My Lords, I refer to my interests in the register in respect of policing. We are grateful, of course, to the Minister for explaining the complicated arrangements for the governance of policing in London, but could we be clear? He said that the Minister said that the commissioner will have the support of the Home Office. Will that extend to looking at how legally qualified chairs of panels have overturned disciplinary decisions? And, when the going gets extremely tough, will the Home Office support the commissioner? It was the previous commissioner who brought in the noble Baroness, Lady Casey, to do this excellent report; will the Home Office now support the new commissioner in making sure that this is implemented—even when it becomes controversial, as it will?
Lord Sharpe of Epsom (Con)
The noble Lord asked me two questions. I refer back to my previous answer on police dismissals. The review will investigate the impact of the introduction of legally qualified chairs. I believe the policy is about seven years old now and it deserves to be looked at, for obvious reasons. As for Home Office support, I think I have been very clear: Sir Mark Rowley enjoys the trust and confidence of the Home Office and the Secretary of State.
Hereditary Peers By-election
(2 years, 1 month ago)
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Lord Grocott (Lab)
My Lords, I cannot resist making a couple of brief comments. I know I have been doing this for some time; it would be very nice if I could pass on the responsibility for doing it to my eldest son.
Just to put it in context, because this really is a pretty astonishing period, we have five by-elections in the space of three days. I do not think there has ever been anything quite like it. Of course, I congratulate the two winners, but to the 20 losers—there were 22 candidates—I say, “Do not despair, because there is another one coming along on Friday.” Two Tories were elected today, one Cross-Bencher will be elected tomorrow and two more Tories on Friday, so out of 22 candidates I make that a one in five chance of being in this House by Friday if you are a Tory hereditary Peer. It is a pretty small market. The normal ratio of winners to electorate for by-elections to the other House is 1:73,000. I also ought to point out that they are coming with increasing frequency, as I mentioned in the House a little while ago.
Lord Grocott (Lab)
They are getting older, as my noble friend says. We have had 16 by-elections in the 16 months—by coincidence, it is 16 months—since by-elections resumed after the suspension during the period of Covid, so we have had 16 new Members: two Labour; two Cross Bench; and 12 Conservatives. Nine of the 12 Conservatives were elected by this privileged circle of Conservative hereditary Peers, so nine selected by 43: again, the stats are pretty good if you are a hereditary and a Conservative. I can mark a landmark, which some may celebrate but I have to admit that I do not, that with the two elected today, there have now been 50 Peers elected via the by-election system since it began in 1999.
It is interesting that, as we all know, this was introduced as a temporary measure—we have had 50—and now the next generation is moving on. Peers who came in at a by-election are retiring and now causing another by-election, so we are having by-elections for by-elections in something that was intended to be a temporary phenomenon.
As the House knows, I am afraid the Government have always refused to make any changes. But I am an optimist. There is a glimmer of light at the end of the tunnel. We have heard from the Prime Minister repeatedly this week that she is a listening Prime Minister. I wonder whether she will listen to the overwhelming majority of noble Lords in this House, who have said on every test we have had that these by-elections could cease. It might be a U-turn, but these things happen. It would be terrific if the Prime Minister listened to us and ended these ridiculous by-elections once and for all.
Lord Mancroft (Con)
My Lords, as the noble Lord, Lord Grocott, rightly points out, this is a very strange way of selecting people. That is because it was designed by the Labour Party when it was in government. A sensible party would have come up with something different. However, the two candidates we have elected today are of a very much higher calibre than many of the candidates appointed over the last few years. More importantly, neither of them has abused parliamentary privilege to interfere with the system of prosecution in this country or disgracefully used their position to destroy and attack the reputations of three very honourable public servants, including my late friend Lord Brittan and the noble and gallant Lord, Lord Bramall. They would never have dreamed of doing that. That in itself has destroyed any possibility of having an appointed House in future.
Business of the House
(2 years, 1 month ago)
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Lord True
That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Monday 24 October to allow the Energy Prices Bill to be taken through committee and report that day.
The Lord Privy Seal (Lord True) (Con)
My Lords, this Motion relates to the Energy Prices Bill, which we are shortly to take. I will briefly explain to the House the rationale for this approach. I am sure noble Lords will be aware that, for Bills considered under an expedited timetable, it is usual for Third Reading to take place on the same day as other stages. However, for this Bill we have scheduled Third Reading a day later, on Tuesday 25 October. This reflects the additional time needed to complete the processes of securing legislative consent for the Bill.
I also take this opportunity to update the House on the deadlines for amendments. The deadline for noble Lords to table amendments for the first Marshalled List for Committee is 4 pm tomorrow. If the Bill is unamended in Committee, the deadline for tabling amendments for Report will be 30 minutes after the conclusion of Committee. If it has been amended, the deadlines will be different. We will advise these to noble Lords in the usual way. Noble Lords will be able to table amendments for Third Reading after the conclusion of Report until the start of Third Reading on Tuesday 25 October. The Chief Whip and I will further update the House as the Bill progresses and details will be available on the annunciators throughout the passage of the Bill.
Crime (International Co-operation) Act 2003 (Designation of Participating Countries) (England, Wales and Northern Ireland) Order 2022
(2 years, 1 month ago)
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Lord Sharpe of Epsom
That the draft Order laid before the House on 19 July be approved. Considered in Grand Committee on 18 October
Economic Update
(2 years, 1 month ago)
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Baroness Smith of Basildon (Lab)
My Lords, I hope we can get back at some point to hearing Ministers repeat Statements; I think it would be helpful to the House.
After listening to the Chancellor read his Statement on Monday, I came to the conclusion that Jeremy Hunt is either the luckiest or the unluckiest man in politics. He is unlucky in that he stood twice and failed twice to become leader of the Conservative Party and take over as Prime Minister. Perhaps he is lucky in that, despite being left out of the Cabinet because he did not back Liz Truss, he is now the most powerful person in government—he certainly has more authority than the Prime Minister—but he is unlucky again because he is the man inheriting the mess of the long- term damage inflicted on the economy in just 38 days by Kwasi Kwarteng. Worse than that, the co-architect of the policies that have caused such immediate turmoil—the person whose vision the former Chancellor said, in his resignation letter, he was following—technically remains in the top job.
The appointment of Jeremy Hunt as the fourth Chancellor in almost as many months and his first Statement on Monday may have brought some welcome, relative calm to the markets, but only because he signalled that he was undoing almost everything in the Prime Minister’s mini-Budget. Yet real harm has already been inflicted and the medicine on offer is even more pain for businesses, households and families across the country. Our economy is now weaker, as is our credibility across the globe, with international commentators likening our problems and economy to those of Greece and Italy rather than to any of the major economies.
There is further damage to public services, now threatened with additional painful cuts as the Government seek to regain market confidence. Most damning of all, for a party that has claimed economic competence in the past, is the damage to peoples’ hopes and aspirations as they are priced out of buying their first homes, renewing their mortgages or finding a rental property on a tightened budget.
We have also seen damage to the Prime Minister, who has lost the confidence of the public, Parliament and her own party. It is embarrassing when across the world the media picks up on the Economist editorial that says the Prime Minister’s likely shelf-life is shorter than that of a lettuce. Let us face it: the only reason she is still there is because her MPs know—as does this House—that they cannot change yet another leader without going to the country for a general election. It is a case of when, rather than if, she is forced out. I suspect there will be possibly a huge sigh of relief from the Benches opposite, most of whom have been quite honest with us and never supported her in the first place, having recognised that her fiscal plans were, in the words of Rishi Sunak, “fantasy economics”. Yet she and her first Chancellor pressed ahead, and the country is now paying a very high price.
We all recognise that there are huge global economic problems that need careful handling with immediate and short-term management and long-term planning, but this current crisis was made in, and existing problems were made worse by, Downing Street. They were not made in the US Federal Reserve, nor on the front line in Ukraine. One of the reasons why I hoped that the Minister would read out the Statement is because there is a line in it that I thought was astounding. It was when the Chancellor said:
“We have had short-term difficulties, caused by the lack of a forecast from the Office for Budget Responsibility alongside the mini-Budget”.
Seriously, whose fault was that? The Government silenced the OBR at the very time it would have been of most help. That was utterly disgraceful.
This whole saga has proved that the Government, and perhaps the wider Conservative Party, do not have the understanding, the knowledge or the right experiences to get our country back on track. While MPs hold back-room talks about the fate of the Prime Minister, interest and mortgage rates just go up and up. This is not a party game, where the job of PM is shuffled around like a game of pass the parcel. As for the Government’s growth plan, the only things that seem to be growing at the moment are inflation and mortgage rates. Today, ONS statistics suggest that food inflation is even higher than regular inflation, currently at more than 14%.
Yesterday, and I do not know whether the noble Lord the Lord Privy Seal will recall this, I asked him what I thought was a straightforward question: what do the Government say to those whose mortgage bills will be hundreds of pounds higher each month following the mini-Budget shambles? He did not answer the question. He did, however, concede that his son and other first-time buyers face a desperate plight in the current circumstances. I am going to try again to get an answer to what I think is a very pertinent question: as mortgage bills go up by £500 and more a month, what do the Government say to those paying such a high price for what was a staggeringly incompetent mini-Budget?
While the noble Lord revisits that question, perhaps he could also reconsider a question posed last Thursday by my noble friend Lord Tunnicliffe. We understand that the Bank of England is assessing the likely number of property repossessions in the coming months. Is the Treasury making its own assessment of that, because it could have a major impact on policy-making? If it is, when will Ministers have the information and the figures, and how would they be used to influence future government policy to avoid such repossessions? If this assessment is not being undertaken, can the noble Lord explain to the House why not?
One of the unexpected developments in the Chancellor’s Statement was the decision to U-turn on the energy price guarantee. Despite the Prime Minister having spent the weeks since the mini-Budget trying to reassure the public that they had certainty on their energy bills for the next two years, Jeremy Hunt has now torn up more of her plans. Is the noble Lord able to outline when the Treasury’s review of energy prices is likely to conclude? When will we hear more about the targeted scheme that will take effect, even though it is not until April 2023, after the winter bills? I would be grateful for a straight answer on this question: why, even at this stage, are the Government still not committing to extending the windfall tax on the excess profits of energy firms?
Early analysis suggests that reverting to a price cap, as the Government are now saying, would see bills rise to about £4,500. Where are families supposed to find that extra money—especially once you factor in increased mortgage costs, food costs, fuel costs, and, probably, rents? Will there be support for businesses beyond April, or will they have to fend for themselves? One of the key justifications for the so-called growth plan was to bring inflation down, but it is still rising. If energy prices rise again that will further fuel inflation—and, as a result, even more interest rate hikes. It is a Catch-22 of the Government’s own making, with the consumer paying the price.
However often the Conservative Party changes leaders or Chancellors, it will not restore that lost financial credibility of the last few weeks. We desperately need a genuine plan for long-term growth. We desperately need policies to support working people, rather than continually making life harder for them. I have often spoken, both here and at other events, about the positive case for politics, and the need for politics to be a force for good and to offer hope for the future. Under this Government, nobody now expects that. All we ask is that it does not get any worse.
Lord Newby (LD)
My Lords, when I think of the noble Lord, Lord True, a number of words normally spring to mind. However, the word which springs to mind today is not normally on that list—it is “sympathy”. I have great sympathy for the noble Lord having to defend the Government’s action on their fiscal policy as he is being asked to answer questions on the most comprehensive government U-turn in his and most of our political lives. Never mind the Prime Minister: I am sure he must have been inclined to hide under his desk. But we are extremely grateful to him that he chose not to do so.
To read or listen to the Chancellor’s Statement, you would think that the screeching reversals of policy which it contains had nothing to do with the actions of the Government themselves—actions they took only three weeks ago. The Statement stresses the necessity of there being “trust and confidence” in the national finances. It acknowledges that trust and confidence have evaporated. It therefore reverses virtually all the tax changes announced on 23 September that had not already been reversed and then says that “decisions of eye-watering difficulty” will still be needed to restore economic stability.
There is no acknowledgement that the only reason the Statement was necessary and the only reason there was a collapse in trust and confidence was because of the actions of the Government. There was no contrition or apology. Instead, as the noble Baroness pointed out, there was the ludicrous suggestion that the only reason why we have a crisis is that the 23 September Statement was not accompanied by a forecast from the Office for Budget Responsibility—one which, incidentally, the OBR offered to produce and the Government refused.
In fact, the only reason we have a crisis is that the Government acted with breathtaking irresponsibility and in the amazingly naive belief that the markets would believe that future shortfalls in government finances could be met by completely implausible projections for future growth in GDP. What the crisis has demonstrated is that the markets are not as naive as the Government and that no Government can buck the markets simply by a combination of bluster and chutzpah.
The silver lining is that, for the foreseeable future, no UK Government, inspired by either right-wing or, for that matter, left-wing ideology, will dare to try to pull the same trick again. But in the short term we are faced with the eye-wateringly difficult decisions which the Chancellor is set to announce on 31 October. It looks as though these decisions will concentrate on public expenditure cuts. There is some suggestion that the Government are revisiting the possibility of a windfall tax on the oil and gas producers to produce real revenue, which is long overdue. But that is only a small part; the main thing will be big cuts in public expenditure.
There is a whole range of questions relating to these possible cuts which I would like to put to the noble Lord. I would like to ask whether benefits will be uprated in line with inflation rather than earnings. I would like to ask about the future of social care provision. I would like to ask about possible further cuts to overseas aid. I would like to ask what level of support the Government will be able to provide for energy bills beyond next April, and what the consequences of the withdrawal of support will be on the level of inflation. I would also like to ask which infrastructure projects will be culled and, in particular, whether the Prime Minister is still committed to the creation of a new railway line across the Pennines. But I realise that there is no point asking those questions today, because the noble Lord will reply simply that everything is currently on the table and I will have to wait until 31 October and, in the case of the longer-term support for energy bills, until the Treasury review is complete.
So instead of asking those questions, I will ask him simply this. What precedent is there for a British Prime Minister being forced to completely reverse the core elements of her programme and remaining in office? What mandate do the Government have for implementing swingeing public expenditure cuts precipitated by their own incompetence? And why do they not now do the decent thing, namely resign and let the people choose who they want to sort out this mess?
The Lord Privy Seal (Lord True) (Con)
My Lords, if the call for my resignation was an expression of Liberal Democrat sympathy, I am very grateful for it, but I cannot oblige the noble Lord.
Noble Lords know the situation outside the United Kingdom—I was also asked about the United Kingdom and will come on to that directly. The noble Baroness opposite agreed that there are global issues related to interest rates. I do not think that, in such an intelligent House as this, we should pretend that the issue of rising interest rates across the world is something somehow confected in the City of Westminster. These are grave problems which people are not used to dealing with, having had low interest rates for a number of years, but they are problems that we will have to discuss and address in a mature way.
The noble Baroness talked about inheriting a mess. I have to say—I can share this with my Liberal Democrat colleagues—that I think the 2010 coalition Government knew a lot about inheriting an economic mess after the party opposite had driven the economy literally into the ground.
On undoing everything, which was another point that the noble Baroness made, major parts of the Government’s package to help people—I underline that—remain in being, in particular to help the most vulnerable people. I said yesterday in our brief exchanges that we have already reversed the national insurance increase, which I think was welcome, for workers and businesses across the country—I think the Labour Party was in support of that—and we are just about to discuss a major package to help people with energy bills.
I am asked about the energy review, and it is true that my right honourable friend the Chancellor said that we were going forward and would be looking at whether the forward-looking support on energy could be better focused on the most vulnerable households and those least able to pay—I believe that the parties opposite thought that help should be focused on the most vulnerable and those least able to pay. That review will continue; obviously, I cannot give a precise date for its outcome, but it will issue well in time to deliver for people a sense of what they will be in going forward. However, this winter, in the midst of the crisis, the extraordinary degree of help that the Prime Minister announced immediately on her becoming Prime Minister will go ahead, and it is important that that is not forgotten.
On mortgage rates, I apologise if I referred to a personal case; I always try to see every policy in every part of government not in a personal way but in the way it affects people—that is how you wisely make policy, not necessarily always from think tank documents. As the noble Baroness knows, the pricing of mortgages is a commercial decision for lenders, in which government does not intervene. However, the Treasury is regularly in contact with mortgage lenders on all aspects of their mortgage business to understand their position and the current lending conditions, including, recently, at the former Chancellor’s round table with retail and challenger banks on 6 October.
I repeat that interest rates and mortgage rates have been rising since last autumn in response to global trends, which include—but obviously not exclusively—as my noble friend Lord Forsyth pointed out yesterday, Putin’s illegal invasion of Ukraine. It is not just here in the UK, as I said at the outset of this response; the US Federal Reserve has been raising its base rate since March 2022. I recognise that the Government have a responsibility to provide stability for markets, including for mortgages, and that was one of the reasons why we have taken immediate action, as we have, to ensure the UK’s economic stability and provide confidence in the Government’s commitment to fiscal discipline.
Those of us who remember the terrible inflation rates of the 1970s will never forget its impact on families and businesses, and we well understand that families across the country are struggling with rising prices and higher energy bills. I repeat that this Government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth to help everyone.
On energy, I referred to the energy price package for the winter, which will go ahead.
I must point out that a windfall tax is a one-off tax. However, as I said yesterday, there is already a tax levy on the income of energy companies. That already exists, having been introduced by this Government.
On public spending, as the noble Lord, Lord Newby, said, a Statement will be made shortly by my right honourable friend the Chancellor, and the noble Lord knows that I cannot anticipate that. I can say, as my right honourable friend the Prime Minister said today, that the pensions triple lock will stand. I think that will give a great deal of reassurance to many noble Lords and to those following our debate.
I think my time is up but if I have not answered any questions, particularly on the point about repossessions which the noble Baroness made, I will write to noble Lords. I am sure that those factors will be taken into account by my right honourable friend, but I will get a response on that.
Lord Forsyth of Drumlean (Con)
My Lords, does not my noble friend the Minister think it remarkable that, with soaring interest rates worldwide, a dangerous war in Ukraine and double-digit inflation in this country and elsewhere, the opposition parties have nothing to say by way of remedy other than that we should reduce the term of the Prime Minister to less than that of a fruit-fly and plunge the country into a general election? Is that not why this country needs this Government at a time when people are worried sick about how to pay their bills?
Lord True (Con)
My Lords, Labour’s spending commitments are about as opaque as the Government’s current ones but at least we are going to publish ours shortly. We all wait to hear what the Labour Party might say. It will face the same constraints on tax and spending as this Government. It has committed to massive excess expenditure but we have seen few revenue-raising proposals. Indeed, the windfall tax would be a one-off and would raise significantly less than Labour suggests. In conclusion, if this does not take away from people’s problems and fears—people are worried about mortgages, interest rates and inflation—let me say that the current central bank interest rate is lower than it was in 11 of the 13 years of the Labour Government after 1997, when average rates approached 5%.
Baroness Wheatcroft (CB)
My Lords, the Minister and the noble Lord, Lord Forsyth, referred to the global trends that are causing such mayhem in various countries, including our own. However, those trends were in evidence more than three weeks ago. Can the Minister tell us what the then Chancellor had in his so-called mini-Budget that was not agreed—indeed, encouraged—by the then Prime Minister?
Lord True (Con)
My Lords, I am not answering for my right honourable friend the former Chancellor of the Exchequer. I am stating to the House that, given the circumstances we are in and the position I have outlined, the Government, with the intention of ensuring the UK’s economic stability in response to events, have published a way forward. We have published proposals on the fiscal side and will shortly publish proposals on the spending side.
Lord Liddle (Lab)
My Lords, if this crisis is all a global crisis, as the noble Lord, Lord Forsyth, claims, why was the gilt market’s immediate reaction to Chancellor Kwarteng’s Statement to increase long-term interest rates in this country to higher levels than they are for Italy and Greece?
Lord True (Con)
My Lords, the noble Lord is pretty well informed about the economic position in other European countries. He will know well that there are grave inflationary problems and problems with interest rates across Europe. There has already been a successful gilt sale this week; I have no doubt that it will continue.
The Archbishop of York
My Lords, I do not pretend to know the ins and outs of exactly where we find ourselves but I serve communities in the north. I think particularly of people I have met recently in Middlesbrough and Hull, where there were great hopes for levelling up. It now seems a distant dream. I recently visited a school where children go in the morning with an empty lunch box for them to fill up with food from the food bank in the playground at the end of the day. The budget for school meals has gone up by 2% yet food inflation has gone up by more than 10%. We need to make tough decisions—I am glad to hear that the triple lock will remain in place—but, on behalf of the communities where I serve, I must ask this: will benefits rise in line with inflation? If not, millions of people will be moved into poverty. Those who recently donated to food banks are now visiting them themselves.
Lord True (Con)
My Lords, I reiterate that the purpose of the Government is certainly to help those who are vulnerable and those living in some anxiety at the moment. That is one of the reasons why we are looking at ways of concentrating the energy help on the most vulnerable as we go forward, after dealing with the immediate crisis. I assure the most reverend Primate that the levelling-up programme will continue. Many of the growth measures that were announced will also continue. I hope that if local authorities in his area wish, for example, to set up investment zones to attract jobs and investment in the way that the Government would like to see, then he will, with his great leadership role in the community, give support to such propositions.
Lord Fox (LD)
My Lords, until about a week ago, the whole Cabinet and most of the Members opposite were proclaiming that the only way to deliver growth was through a whole suite of tax cuts. We now know that almost all those tax cuts have been reversed, so what is the plan for growth, how much growth does the Minister expect, and when can we start seeing the measures that will deliver the growth that we need in this country?
Lord True (Con)
My Lords, we will continue to go for growth by delivering support for families who need it most—for example, by cutting the tax burden that would have taken place with the national insurance tax. That levy reversal will give 28 million people an average of £330 a year. We will go for growth by launching investment zones, as I said when responding to the most reverend Primate. We will introduce minimum service levels for transport services shortly in Great Britain, to ensure that strike action cannot derail economic growth; I look forward to support from the Liberal Democrats for that legislation. We will accelerate infrastructure projects across the country and have announced over 100 of them for transport and energy. We will also speed up delivery to undertake the complex patchwork of restrictions and EU-derived law.
Lord Howell of Guildford (Con)
My Lords, does my noble friend agree that, thinking about the future and the practical situation that we are in, there is quite a lot of sense in reviewing the energy cap again in April 2023, provided that it does not push up the CPI, because every time that happens it increases government expenditure elsewhere? There is a growing realisation that, next year, energy prices internationally—oil and gas—need not rise nearly as fast as they have in the past. There are some signs of fall already. Therefore, if we can organise effectively an international co-operation with other major consumer countries in persuading the powers-that-be in the production world to increase oil and gas production, including America, OPEC and other countries, the difficulties of Russian withdrawal can be overcome, and we can see a much more favourable inflation rate. That in turn will begin to unwind all these worries about benefits matched to inflation and demands for wage costs well above 5%.
Lord True (Con)
My noble friend, with his immense experience in the energy sector, has been something of a voice crying in the wilderness on energy policy over decades under different Governments. His point about volatility is critical and is one of the reasons why we must review the nature of support going forward. Obviously, we will need to talk, and are talking, to other energy producers. We have had a very sharp increase. There have been significant fluctuations. We introduced an energy profits levy, an additional 25% tax on the profits of oil and gas companies which, listening to people on the opposite Benches, you would not know had even happened. That is going forward and is not a one-off. It will raise £7 billion this financial year and £10 billion in the next. We are looking to iron out the contracts to help renewable energy industries and there is a package that I hope will come forward before too long.
Baroness Lister of Burtersett (Lab)
My Lords, the noble Lord did not answer the very specific question from the most reverend Primate about benefits uprating. On Monday, the Chancellor told MPs that
“all these decisions will be taken through the prism of the impact on the most vulnerable people in society.”—[Official Report, Commons, 17/10/22; col. 429.]
Many of the most vulnerable people in society rely on social security and, as we have already heard, the inflation rate they face is actually higher than the 10% announced today. Given this, is there not a strong case for the Government to announce now that they will uprate benefits in line with inflation to reduce the anxiety being faced by people who are, as we have heard, already struggling to make ends meet?
Lord True (Con)
My Lords, it is absolutely true that people across the United Kingdom are worried about the cost of living. I apologise if I did not answer the question from the most reverend Primate; I will answer it now, but it might not be the full answer required. It is not always easy to remember everything that one is asked at the Dispatch Box, so I sincerely apologise to the House. The Government have announced £37,000 million of support for the cost of living this financial year. We have the energy price guarantee and the energy bill relief scheme, which will help millions of households. We are supporting millions of vulnerable households, which will receive £1,200 in one-off support, with additional support for pensioners and those claiming disability benefits, as the noble Baroness knows.
However, obviously the issue of uprating benefits and other aspects of government spending are being considered in totality. The Work and Pensions Secretary is conducting her annual review of benefits and I promise the noble Baroness that more will be said on this in the medium-term fiscal plan.
Lord Cromwell (CB)
My Lords, has the noble Lord seen the recent article in the Financial Times that suggests that a future Government of any complexion will simply be a creature of the bond markets and not the other way round? Does he agree, and is that a good thing?
Lord True (Con)
I do not know that I do agree. I fear that I am not the most assiduous reader of the Financial Times—certainly not its editorial copy. The Government’s aspiration is to serve the people, not the bond markets.
Baroness Kramer (LD)
My Lords, I just point out to the Minister that, even with the list of flimsy growth measures he just described, Goldman Sachs forecast a 1% drop in output in the UK next year—so a recession. That is on the back of these policy announcements. I push him on this: today at Prime Minister’s Questions, if I understood the Prime Minister correctly, she said that there would not be cuts to public spending. She even implied that there would be growth in public spending. Could the Minister clarify if, once again, she was talking in nominal terms—or cash terms, as it is sometimes called? If it is not in real terms, swingeing cuts are on the way.
Lord True (Con)
If it is £1 less in real terms, that is an interesting definition of a swingeing cut. A medium-term fiscal plan is going to be published shortly. The noble Baroness and I go back a long way and I have great respect for her, but I suggest she waits for that. I believe the noble Baroness still has interests in the lovely California, so she should understand, from her knowledge of the United States, that there are international issues at play.
Lord Young of Cookham (Con)
My Lords, does my noble friend recognise that there will be real difficulty finding anything like the necessary savings by cutting public expenditure? There will have to be some increases in tax. Does he recall that, in the 1980s, my noble friend Lord Lawson aligned capital gains tax and income tax, and said there was no justification whatsoever in capital gains tax being less than income tax? Reintroducing that progressive Conservative policy would save some £14 billion. Will he commend that to the Chancellor?
Lord True (Con)
My Lords, I am not going to be drawn on anything in relation to what may be in the medium-term fiscal plan, but I am sure that the Chancellor reads your Lordships’ Hansard closely.
Baroness Bennett of Manor Castle (GP)
My Lords, my question follows on from that from the Cross Benches. A surprisingly little remarked element of the Statement is the creation of an economic advisory council with four names. These are a BlackRock portfolio manager, a hedge fund manager formerly at Deutsche Bank and JP Morgan, a hedge fund owner formerly of Goldman Sachs, and a JP Morgan employee formerly of HSBC. The financial sector represented 8.3% of the UK’s total economic output in 2021. Does the Minister see a problem with the composition of this panel? Is it appropriate in representing just a tiny, politically privileged part of the UK economy, about half of the input of which comes from London, drawing on the point made by the most reverend Primate?
Lord True (Con)
I am not going to comment on the appointment of advisers, but I am sure that those named, if the noble Baroness has named them correctly, will give the best advice they conceivably can. Often from Green Benches we hear attacks on the financial services sector, and it is quite astonishing that the Scottish Greens in government should adhere to this kind of visceral opposition to financial services. There are more than 2.3 million jobs in financial services, and two-thirds of those are outside London in finance hubs including Belfast, Birmingham, Cardiff, Edinburgh, Glasgow, Leeds and Manchester. Financial and professional services contributed nearly £100,000 million pounds in taxes in 2020.
Lord Cormack (Con)
My Lords, will my noble friend accept that what is crucial at the moment is that in the country as a whole there should be real confidence in the credibility and the competence of the Government, and that that means there has to be a Prime Minister who is entirely credible and who enjoys the full confidence of the country, as I believe the Chancellor now does.
Lord True (Con)
I have nothing to add to the answer I gave to the noble Lord yesterday.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, the Minister said that the triple lock is guaranteed. At the Conservative party conference, the Prime Minister said it was guaranteed. On Monday, the Chancellor said that he could not guarantee it. Today, the Prime Minister now says she can guarantee it, yet it is the Chancellor who is going to make the Statement on the 31st. Why are we expected to believe that there will not be another U-turn? Can the Minister make sure when he goes to the Cabinet that there is no such U-turn?
Lord True (Con)
I have set out the position to the House. That was a good try by the noble Lord but this morning the Prime Minister made a statement in the House of Commons on the pensions triple lock, and that is the position of His Majesty’s Government.
Baroness Morris of Bolton (Con)
Does my noble friend agree that alongside supporting families and businesses with their energy costs, it is critical that we work to secure our own long-term energy supplies?
Lord True (Con)
Yes, I agree with that, and my noble friend Lord Howell of Guildford has been so wise on this point for such a very long time. Again, this may involve difficult decisions and reflections, and some people may have to lay aside some of their prejudices in the national interest. We will be giving very careful thought to seeking to move towards greater energy independence. I hope that that goal, which must be in the national interest, will allow all of us from different points of views to temper some of our ardour in the collective public interest.
Lord Stevenson of Balmacara (Lab)
My Lords, the Minister has been very generous with his time. He has made a number of comments about the integrity of the Government now in place and has stressed the need to go forward, working with the team he has. Can he comment on the fact that the Home Secretary has now resigned?
Lord True (Con)
My Lords, obviously, I cannot comment on information to which the noble Lord is privy. I am here as Leader of the House of Lords to serve your Lordships’ House. I give priority to serving your Lordships’ House and have not been looking at WhatsApp during this exchange of views.
Baroness Smith of Basildon (Lab)
My Lords, I am grateful for that; the noble Lord is always helpful to this House. It would be helpful if we could have confirmation. The rumours are now that the Home Secretary has been sacked from her post. Given what has been said today about the necessity of a strong and stable Government, can he report back to your Lordships’ House at some point? There are probably Members of this House who would be happy to serve. That might be an answer to help out the Government.
Public Order Bill
Wednesday 19th October 2022
(2 years, 1 month ago)
Lords ChamberRead Full debate Public Order Act 2023 View all Public Order Act 2023 Debates Read Hansard Text Watch Debate Amendment Paper: Consideration of Bill Amendments as at 18 October 2022 - large print - (18 Oct 2022)
Baroness Williams of Trafford (Con)
My Lords, it has been suggested that we might adjourn for five minutes while we just double-check the rules.
Baroness Williams of Trafford (Con)
My Lords, it might be helpful to read from the Companion about the status of a First Reading:
“The Question is put from the Woolsack. The first reading of a bill is agreed to without dissent or debate, both as a matter of courtesy and because the House has no knowledge of the contents of the bill until it is published.”
On that basis, I beg to move that this Bill is read a first time.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, that is a very helpful answer but if that is the case—and it is—why does the chair have to say “Content” or “Not Content”? Does it not make this House look even more stupid?
Baroness Williams of Trafford (Con)
My Lords, it is a formal process for receiving a Bill.
Lord Kennedy of Southwark (Lab Co-op)
Can I just endorse the comments from the Government Chief Whip? It is a formal process; let us get on with the business.
Product Security and Telecommunications Infrastructure Bill
Wednesday 19th October 2022
(2 years, 1 month ago)
Lords ChamberRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 16-R-I Marshalled list for Report - (10 Oct 2022)
The Lord Privy Seal (Lord True) (Con)
My Lords, I have it in command from His Majesty the King to acquaint the House that His Majesty, having been informed of the purport of the Product Security and Telecommunications Infrastructure Bill, has consented to place his interest, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Kamall) (Con)
My Lords, I beg to move that this Bill do now pass. I thank noble Lords on all Benches—noble friends behind me and noble Lords across the House—for their co-operation on this Bill. We saw it as vital for the UK to remain at the forefront of the global economy. It is important that we see fast, reliable but secure connections, for they are the cornerstone of a modern, thriving knowledge economy and society.
It is important that families, communities and individuals as well as state and non-state organisations have reliable tech that works in every part of the country, however remote. That is why the Government have made huge investments in digital infrastructure and have ambitions to become a global cyber power.
We have spent £5 billion on Project Gigabit to get lightning-fast, reliable broadband to hard-to-reach places, and legislated to address absent or unresponsive landowners holding up the deployment of gigabit-capable broadband in blocks of flats. It is also why the Government have a £2.6 billion National Cyber Strategy to protect and promote the UK. This year, we completed a consultation on new laws to strengthen UK cyber resilience.
However, we want to do more; we want to go even further and tackle the challenge that the country is facing. Throughout this Bill’s passage, Ministers and officials have listened carefully to industry, to noble Lords and to the other place, to address concerns and improve the legislation.
We included updates to give telecoms operators further rights in respect of telegraph poles, supporting the delivery of gigabit-capable broadband. We listened carefully to the Delegated Powers and Regulatory Reform Committee to subject the provisions in Part 1 of the Bill to appropriate scrutiny. The product security provisions have been backed by industry, and other countries are following suit. As a global leader in the cybersecurity landscape, this Bill is the first domestic legislation in the world to establish a framework that will introduce security requirements for these products. We now have a Bill that is equipped to deal with the changing landscape of cybersecurity as new threats emerge and evolve in future years. Once it comes into force, the measures in it will improve connectivity and resilience against cyberattacks in the UK.
Let me end by once again thanking noble Lords and Members in the other place for their contributions. I thank the Front Benches and my noble friends here for their wisdom and commitment. I thank noble Lords across the House and the parliamentary clerks, without whom we would not be attending this debate today. I should also pay tribute to my predecessor, my noble friend Lord Parkinson of Whitley Bay—I say “I should” but I want to—for so expertly taking the Bill through Committee stage in this House.
I also hope all noble Lords will join me in thanking the Bill team for their engagement, in particular Lindsey Cox, Colum McGuire and Anna Kerby. I thank Thomas Stukings and Poppy Woodcock in my private office—they wrote the speech, not me. They deserve praise. I also thank everyone in the policy and legal teams who worked tirelessly to get this Bill to where it is. Before I break into an Oscar awards-type speech, I also recognise that there may be a need for further conversations on one or two issues. I reassure noble Lords that I remain open to further meetings with them to deliver this important legislation.
Baroness Merron (Lab)
My Lords, on the face of it, this Bill might have looked purely technical, but it will affect the day-to-day lives of millions up and down the country. It improves security for smart devices—products which are now second nature to so many of us. We know there will be regulations to follow and that the devil will be in the detail; we look forward to examining that detail. The Bill will also assist the installation of infrastructure and support greater connectivity, whether through wired broadband or wireless 5G networks.
From these Benches, I thank the ministerial team, who have been courteous, professional and ever willing to engage in meetings and discussions. To refer to the ministerial team of three on this occasion, I would like to say how grateful I am to the noble Lord, Lord Kamall, who cut his DCMS teeth on this Bill. My thanks also go to the noble Lord, Lord Harlech, who recently joined the Government Front Bench, and the noble Lord, Lord Sharpe, who bought his Home Office experience to bear. I also associate with myself with the comments of the noble Lord, Lord Kamall, in expressing my particular thanks to the former Minister, the noble Lord, Lord Parkinson.
From these Benches, we are also grateful to the Bill team, the ministerial office team, the clerks, the staff of the House—indeed, all those who worked front of house as well as behind the scenes to make this Bill possible. As ever, it has been my pleasure to work with my noble friend Lord Bassam, who has brought his valuable experience and knowledge to bear. We were very fortunate to have the highly professional support of Dan Stevens, our excellent adviser who has guided and advised us throughout, to whom we express our thanks. Of course, my thanks are also due to all noble Peers who have worked in a cross-party and constructive fashion on this Bill.
I am very glad that the Government listened to a number of noble Lords regarding the delegated powers in the Bill, and that a particular amendment was brought forward to enhance operators’ rights in respect of telegraph poles. I thank the noble Baroness, Lady Harding, for her work on this issue.
Finally, I hope that the Minister will recognise that the amendment passed by your Lordships’ House, which requires an independent review of the Electronic Communications Code, offers a sensible and important way forward on a number of outstanding and key issues, including access to multiple-dwelling units and land valuation. These matters need resolution, and I therefore hope that the Government will take this amendment seriously ahead of the Bill’s return to the other place.
Lord Clement-Jones (LD)
My Lords, I add my thanks to the Minister, the noble Lord, Lord Kamall, the noble Lord, Lord Sharpe, and their team, and of course to the Minister’s predecessor, the noble Lord, Lord Parkinson. I would describe him as “urbane”— I can flatter him now that he is no longer a Minister.
I also thank the noble Baroness, Lady Merron, and the noble Lord, Lord Bassam, on the Labour Front Bench for making common cause on so many issues, and quite a number of Cross-Benchers and Conservative Back-Benchers who have played such a prominent role in trying to improve the Bill with their expertise alongside external organisations—such as Which?, Protect and Connect, ISPA and CityFibre—which have been so helpful in their briefings. However, my particular thanks are due to my fellow in arms, my noble friend Lord Fox—who has borne at least half the burden of this Bill with me and was described rightly in Committee as a “supersub” by the noble Lord, Lord Bassam—and, very importantly, to the very expert Sarah Pughe in our whips’ office. I thank in particular the noble Lord, Lord Kamall, for his efforts; this was his first DCMS Bill, but I am sure it will get worse.
I am pleased that the Government have made some concessions and given assurances during the course of the Bill, particularly about the regulations to follow. However, on the central aspects of not specifying enough in primary legislation in terms of security requirements for IoT devices and the retention of unfair valuation and ADR provisions, the Bill is ultimately disappointing. I hope that the Minister will ensure that the review mechanism is retained and does not return to this House.
In general, the objectives on all sides of the House are not very different, but I must say that the Government’s one gigabit strategy really has seemed to mutate throughout the course of this Bill, so I do not believe that there is a great deal of clarity yet on when the Government’s strategy is actually going to be accomplished. In general, as regards retaining the review mechanism, a little willingness to accept this might earn this Government just a few, badly needed friends out there—they might find that quite useful at the current time.
The Earl of Lytton (CB)
My Lords, first, I apologise for my unavoidable absence at Report last week, but I add my belated welcome to the Minister on his appointment and thank him for writing today, as well as my appreciation to his predecessor, the noble Lord, Lord Parkinson. On product security, I certainly wish this Bill well. I am somewhat less enthusiastic about its telecommunications infrastructure measures, particularly on the matter of valuation.
I express my thanks to the clerks and the wonderful co-ordination run from the Liberal Democrat offices. I thank colleagues who spoke in favour of the valuation amendments that I tabled at earlier stages, particularly the noble Earl, Lord Devon, who cannot be here today, and the noble Lord, Lord Cromwell, who I am glad to see is in his place. I also thank noble Lords across the House—I am extremely grateful, particularly for the Labour amendment of last Wednesday, so ably pressed by the noble Baroness, Lady Merron, which really remains the only man standing on the measures that might ultimately address market concerns on telecoms sites. I thank the noble Baroness warmly for that and pledge my support going forward. I pay tribute to the CLA, of which I am a member, the NFU, and other bodies such as Protect and Connect, which we have heard about, for their support and persistence.
Whatever the economic and political rationale, impressions matter and govern transaction analysis—and market confidence also, as we have seen recently in grand style. So I regret that, despite the Minister’s letter of today, a reasoned justification and clear evidence for further interventions into landlord and tenant practice are not apparent to me, especially looking at contractual terms beyond rent. Although as a property practitioner and fellow of the RICS, I believe that these measures are in that sense regrettable, divisive, avoidable and likely to cause the supply of mast sites to shrivel, I appreciate that the Minister demurs and disputes the evidence that has been put forward of lessor reticence, increased legal disputes and slower market process. So we will just have to see. Site providers in the market, their advisers and so on will have to take note, and they may become increasingly wary, not only for what this means in terms of mast rentals but for the wider implications for property rights going forward.
Baroness McIntosh of Pickering (Con)
I rise briefly to support the noble Earl, Lord Lytton, and to thank him and his Cross-Bench colleagues, the noble Earl, Lord Devon, and the noble Lord, Lord Cromwell, for the Cross-Bench support that we have enjoyed, together with that from the opposition Benches. My noble friend Lord Northbrook has also fought a valiant fight.
I thought it important from these Benches to place my regret that the 2017 electronic communications code has been harsher in its effects than had previously been anticipated. This was an opportunity to review that. So, while I did not support the Labour Front-Bench amendment, this is a good opportunity next door to consider whether there is cause, as I believe there is, to review the legislation at this stage.
I regret the imbalance in relationship that the Bill will expedite between the operators and landowners, many of whom are not private landlords but are sports clubs and others that will find the loss of income quite substantial and very difficult to replace at this time, in particular with the cost of living crisis and the inflation that we have seen. I regret that the alternative dispute resolution mechanism will not be mandatory; perhaps that is something the Government might like to consider when they look at this next door.
I will end on a local note. This is something that potentially could impact very positively in north Yorkshire. However, there are two issues that the Minister may not be aware of, as he is relatively new to this brief. One is that there are a number of existing masts owned by a specific telecoms operator that have not been operational. You have to ask the question, since the permissions have been given and the masts are in place, why on earth are they not being operated, in a place with one of the poorest levels of connectivity in the country. The other is looking at alternatives such as piggybacking on the back of the telecommunications masts that were put in place at public expense for the North Yorkshire Police service. I can see absolutely no reason why we cannot piggyback on the back of those.
With those few words, I wish the Bill well, particularly its Part 1—we will gloss over some of the later parts—as it proceeds in its passage through Parliament.
Lord Kamall (Con)
My Lords, I apologise as, in my quest to be concise, I did not name specific noble Lords and I think it is right that I do that. I thank the noble Baroness, Lady Merron, and the noble Lord, Lord Bassam, for their warm welcome. Indeed, it is a re-welcome from the noble Baroness, Lady Merron; many noble Lords will know that she and I have worked together before—we are inextricably linked. I also thank their adviser, Dan Stevens. I thank the noble Lords, Lord Clement-Jones and Lord Fox, and of course their adviser, Sarah Pughe. We take the credit for it, but these advisers work incredibly hard.
I acknowledge the continuing concerns of the noble Earl, Lord Lytton, and of other noble Lords who spoke on this issue. As I have said, I remain open to further meetings and am very happy to discuss these things. I commend the Bill to the House.
Energy Prices Bill
Wednesday 19th October 2022
(2 years, 1 month ago)
Lords ChamberRead Full debate Energy Prices Act 2022 View all Energy Prices Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 59(a) Amendments for Committee - (19 Oct 2022)
Lord Callanan
That the Bill be read a second time.
14th Report from the Delegated Powers Committee, 4th Report from the Constitution Committee
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, Russia’s illegal invasion of Ukraine and its impact on global energy markets have affected families and businesses up and down this country. As we approach winter, this Government have made bold decisions so that homes are kept warm and businesses are kept open. On 8 September, the Prime Minister set out a comprehensive package to tackle rising energy prices. As part of this, she announced that we would bring forward emergency legislation, which is before noble Lords today.
I thank the Opposition and the whole House for their constructive engagement to expedite the Bill. Providing support to those who need it is a shared value across all parties, as seen in Monday’s proceedings in the other place. I also thank the DPRRC for its report on the Bill, published this morning. I welcome its constructive comments on ensuring that the powers in the Bill are appropriately drafted and justified. We will of course be responding to the committee shortly; however, it is important that we remember the context of the Bill and ensure that consumers are able to benefit from the Bill as intended and as I will set out.
The Energy Prices Bill means that consumers will pay a fairer price for their electricity and that no one is left behind. First, the Bill provides the legislative footing for the energy price guarantee, which will protect UK households from soaring energy prices. By reducing the unit cost of electricity and gas, the typical household will have the equivalent of an annual bill of £2,500. Effective from 1 October this year to the end of March next year, the energy price guarantee will provide domestic consumers in Great Britain and Northern Ireland with crucial support in the winter months.
To ensure that support is available up and down the country, an alternative fuel payment will provide a one-off £100 payment to UK households that use alternative fuels for heating. Heat network consumers will also receive a one-off £100 payment. We are exploring delivery routes for the alternative fuel payments in Northern Ireland as well.
The energy bills support scheme was announced earlier this year to provide £400 to support households. I confirm that, through this Bill, households in Northern Ireland will be able to receive equivalent support to those in Great Britain.
The Bill also provides support for non-domestic consumers, such as businesses, charities, schools and hospitals. The energy bill relief scheme will enable the Government to provide financial assistance to all eligible non-domestic organisations in Great Britain and Northern Ireland over the coming winter period. Bills will be reduced by a new government-supported price, which is less than half the wholesale prices anticipated this winter. Discounts apply from 1 October 2022, with an initial period of six months.
In three months, the Government will publish a review to consider how to continue support for non-domestic users, particularly those most vulnerable to energy price rises. The Bill provides that the scheme may be extended to those deemed eligible for up to four consecutive six-month periods. For non-domestic consumers who use heating oil or alternative fuels instead of gas, the Bill will also introduce a non-domestic alternative fuels payment. This support will likely take the form of a flat-rate payment delivered via electricity bills.
This legislation strengthens previous action by requiring, rather than expecting, landlords and other intermediaries to pass on the energy price support they receive to end-users, such as tenants, as appropriate. This applies to the energy price guarantee, to the energy bills support scheme and to the energy bill relief scheme. The Bill will also ensure that heat networks benefiting from the energy bill relief scheme pass through cost savings to their consumers. The Bill will provide for the appointment of an alternative dispute resolution body to handle complaints raised by consumers against their heat network if it has not complied with those pass-through requirements.
Finally, we must protect consumers from paying excessive amounts for this low-cost electricity, while ensuring that no firms are unduly profiting from Russia’s illegal invasion of Ukraine. Wholesale electricity prices are currently set by gas-fired generation, which is the most expensive form of generation. This means that consumers are having to pay over the odds for cheap low-carbon generation. The powers in the Bill will allow us to introduce a temporary cost-plus revenue limit for low-carbon generators that are not currently covered by a contract for difference. This will allow generators to cover their costs and receive an appropriate revenue that reflects their investment commitment and risk profile. The precise mechanisms will be subject to a consultation to be launched shortly, ahead of it coming into force from the start of 2023.
I stress that this is not a windfall tax; this is a targeted intervention to deal with a specific problem that has occurred in the wholesale electricity market. It will help to break the link between abnormally high gas prices and the cost to consumers of low-carbon electricity. We are also legislating for powers that will allow us to offer a contract for difference to existing generators not currently covered by the Government’s existing contracts for difference scheme.
Lord Liddle (Lab)
I raised this point about a windfall tax last week, so I thought I would be justified in intervening today. There is an argument that a windfall tax, which is predictable because the suppliers of electricity know what bills they are going to have to pay, is better in terms of promoting long-term investment in renewables, which we desperately need, than this cost-plus arrangement, which is also variable, as I understand it, by ministerial order. That provides no certainty for potential investment.
Lord Callanan (Con)
I am not sure the noble Lord is correct. The reason we have selected this mechanism is that it is a complicated picture; of course, many suppliers would no doubt argue that they have sold ahead their production to energy retailers, et cetera, and therefore the precise circumstances of every individual supplier will determine the arrangements that will be appropriate for them. It is not a windfall tax because a windfall tax would be levied on profits and would go to the Exchequer. This money clearly does not go near the Exchequer; it will go directly to consumers in the form of lower bills.
I mentioned that we will also introduce a contract for difference to existing generators that are not currently covered by the Government’s existing contracts for difference scheme. We hope that many of these suppliers will move voluntarily to contracts for difference payments, which will provide them with secure long-term revenue, and therefore there will be no need to impose this cost-plus mechanism.
The voluntary contract would grant existing generators longer-term revenue certainty and safeguard consumers from future price rises. This Bill is part of the swift, decisive action we are taking to deliver affordable and secure energy in the UK. There are no cost-free actions, but I think the whole House agrees that it would be wrong to do nothing. This Government will always act decisively to support households and help businesses grow. The consequences of not acting now would mean worse economic outcomes going forward; this Bill will provide certainty, reduce inflation and support economic growth. I would welcome the support of noble Lords in ensuring the Bill becomes law and therefore commend it to the House.
Lord Lennie (Lab)
My Lords, I confirm to the Minister that we support the passage of the Energy Prices Bill, but can he explain to the House whatever has happened to the Energy Bill, which has been shelved somewhere, waiting for someone to make a decision about its future? Without support, consumers and small businesses would be facing an eye-watering increase in their bills—estimated to be somewhere between £5,000 and £10,000, respectively—so the Government have acted and the Opposition support them in doing so. Having said that, they are in a deep mess entirely of their own making.
To give noble Lords a recent example, on Monday I, and perhaps other noble Lords, received a letter from the Minister inviting me to yesterday’s briefing about this Bill. In the letter, the Minister wrote in the first highlighted, bullet-pointed paragraph:
“The Energy Price Guarantee will ensure that a typical household in GB pays around £2500 a year on their energy bill for the next 2 years from 1 October 2022”.
About half an hour after I received this invitation, this month’s Chancellor announced a screeching U-turn, and the two-year pledge went down to six months. Did no one tell the Minister before he wrote the letter? It reminds me of Prufrock:
“In a minute there is time
For decisions and revisions which a minute will reverse.”
My first overarching question to the Minister is this: can we rely on anything this Government are now saying?
The Energy Prices Bill is facing parliamentary scrutiny after it has been acted on. I thank the Delegated Powers and Regulatory Reform Committee for the report it published this morning, which is in essence a condemnatory judgment of the Government. The Bill has to take effect from 1 October 2022, but what does it do and what does it not do?
The unit price cap will mean an average consumer’s annual bill will rise to £2,500, in contrast to Labour’s fully funded price freeze at about £1,900 from September. There is no additional support for the 15% of off-grid households, in contrast to Labour’s plan which would provide £1,000 of help. There is also no additional support for customers on prepayment meters—4 million households—who use approximately 60% of their energy over the winter months as bills are not smoothed out. This contrasts with Labour’s plan, which would save them an average of £1,300. Ten million families will still spend more than 10% of their income on energy, according to a recent study by the University of York.
I turn to the windfall tax—or non-windfall tax—and how the Government propose to pay for this measure. They have spent the last period in office rubbishing the very idea of a windfall tax as “unconservative”, but in Clause 16 we see a windfall tax in anything but name that the Secretary of State may impose on the energy giants. The clause is titled
“Temporary requirement for electricity generators to make payments”.
I will read it out:
“The Secretary of State may, for a purpose mentioned in subsection (2), make regulations for, and in connection with, requiring periodic payments to be made to a payment administrator by … specified electricity generators … electricity generators that are of a specified description, or … electricity generators that are designated by the Secretary of State in accordance with the regulations … The purposes are … the purpose of enabling a payment administrator to obtain funds for paying to electricity suppliers in connection with reducing the cost to customers of electricity … the purpose of enabling a payment administrator to obtain funds for meeting expenditure incurred or to be incurred by the Secretary of State in reducing the cost to customers of electricity.”
If it sounds like a windfall tax, if it smells like windfall tax—it is a windfall tax. Even John Redwood described it as a “surrogate windfall tax” in the other place. Energy giants are making £170 billion in excess profits, and they may be required to make payments. Let us call it what it is: a windfall tax, and the Government should do it properly. The level set must contribute significantly to the price support for businesses and consumers. The Government must now end the absurd multi-billion-pound loophole in the windfall tax for oil and gas companies. Above all, it must be fair to customers.
Oil and gas companies are currently enjoying a massive loophole for investing in fossil fuels, so why do the Government think it right to leave billions of unearned, unexpected windfall gains in the pockets of oil and gas giants, thereby forcing people to pick up more of the costs of this support in higher borrowing and higher taxes for the future? How can the Government defend tilting the pitch away from cheap, home-grown, low-carbon power in favour of expensive, insecure, planet-wrecking fossil fuels? The powers are ill defined, the size of the levy is unknown and how much it would raise is unclear. How will the Government ensure fairness with a fossil fuel windfall tax?
The Labour Party will bring forward amendments to the Bill. In line with our fully funded policy, we would seek for the energy price guarantee to take effect from 8 September rather than 1 October. The powers in Clause 21, highlighted by the Delegated Powers Committee, and Clause 22, to modify energy licences and issue directions to licence holders, are a power grab by the Secretary of State. They are not compellingly justified and should be subject to proper parliamentary scrutiny, not the negative procedure. The Delegated Powers Committee is disdainful of what it calls “camouflaged legislation” in the Bill, saying it is “inappropriate”.
For the Government to think that the answer to a slow-to-react regulatory regime is to override it by giving powers to the Secretary of State is fanciful, especially now, with confidence in the Government’s handling of affairs at an all-time low. There is no long-term plan to get us out of the crisis. Electricity and gas prices should be delinked, and Labour would require the Government to develop a plan to do this. Consumers need some certainty to be able to plan for their futures.
There is an unfair £5 billion loophole in the existing windfall on fossil fuels, introduced by the previous Chancellor or the one before. For every £1 invested in oil, gas and fracking, companies get back 91p. Nothing like that exists for renewables or nuclear fuel, and we need this to be levelled up.
We would require the Government to report, assessing the impact of reducing the Energy (Oil and Gas) Profits Levy Act investment allowance from 80% to 5%, particularly on bills. We would also require the Government to assess the revenue and profits of electricity generators and oil and gas producers on a six-monthly basis.
On renewables, Defra is seeking to block landowners from developing solar energy farms. Some 0.1% of agricultural land is currently used for solar energy generation. If that is increased tenfold, it would mean that 1% of agricultural land was used in this way. Who does not like solar energy panels, and why not? They are capable of producing the equivalent of what 10 nuclear power stations produce for the country. We previously heard the noble Lord, Lord True, talk about the need for self-sufficiency in energy; this would be a good start.
We will lurch from crisis to crisis if we do not learn the lessons from this one. We must become much more self-sufficient in our energy production. This will mean a sprint for growth in renewables and nuclear, and a massive programme of energy efficiency across the country. The powers are with the Government, and I commend this to the House.
Lord Foster of Bath (LD)
My Lords, on these Benches we too support the broad thrust of the Bill, but like the noble Lord, Lord Lennie, we wonder what it might look like by the time it gets to us in Committee just next Monday. We also share the concern of the Delegated Powers and Regulatory Reform Committee about the unfettered powers being given to the Secretary of State without any time constraint—powers that enable the Secretary of State to make large changes to the sector without consultation or the right to appeal. As others will no doubt point out, we are concerned that the measures in the Bill treat renewables such as wind and solar less favourably than oil and gas. However, I will concentrate on two issues not covered in the Bill which I believe should be.
The Long Title of the Bill is:
“A Bill to Make provision for controlling energy prices; to encourage the efficient use and supply of energy; and for other purposes connected to the energy crisis.”
So, in addition to pricing and supply, the Bill is also meant to be about the efficient use of energy, yet it is hardly mentioned. Unlike those in many other countries, it seems our Government have no strategic interest in encouraging anyone in the UK to save energy. The International Energy Agency describes energy efficiency in priority terms as the “first fuel”. It reckons that at least half of the improvements needed to deliver net zero by 2050 will come from greater energy efficiency. However, in the UK, far too many people cannot use energy efficiently: their homes leak heat because they are poorly insulated. Around 15 million homes are below energy performance certificate band C. In other words, 15 million homes are inadequately insulated, so they cost more to heat—on average, almost £800 a year. Yet in the absence of a clear national programme, home insulation work has plunged by 50% over the past year, leading Doug Parr of Greenpeace to say:
“It’s frankly astonishing that this dip in insulation rates comes at exactly the time we should be ramping up this proven, long-term solution to the cost of living crisis.”
Even the Conservative-inclined Sun newspaper said in August:
“Householders faced with astronomical heating costs need lagging for their homes, not a government lagging behind.”
So, measures to improve energy efficiency should be a top priority for the Government, with a clear strategy and evidence of real commitment.
As the Minister knows, I have spoken many times about the need to establish the Government’s own energy efficiency targets in law. I have argued that it is the retrofit industry that will deliver the Government’s energy efficiency targets, but the industry has lost confidence after being let down by numerous failed schemes. The industry has shrunk, and the amount of energy efficiency work has fallen dramatically. The industry itself argues that to persuade it now to invest in research, training and equipment, it needs the confidence that putting targets into legislation would give. Conservative Ministers, including the current Chancellor, have claimed numerous times to believe in doing just that—enshrining targets into law. A Defra document states:
“A legally binding long-term target gives a clear signal to industry of the direction of future government policy. This may increase investor confidence and encourage industry to invest in infrastructure and research that will drive innovation”.
The Government have two main targets: for all fuel-poor homes to be EPC band C by 2030; and for all remaining homes to be EPC band C by 2035. However, to date, the Government have refused to put those targets into law to make them legally binding as the industry has requested. I have received no credible explanation for this failure, so I will table an amendment to the Bill in Committee. Last night, your Lordships agreed an amendment to the Social Housing (Regulation) Bill which did at least put an energy efficiency target for social housing into legislation. I hope noble Lords will agree that all the Government’s energy efficiency targets should follow suit. I hope the Minister will explain in detail the Government’s plans in relation to energy efficiency and why it is absent from the Bill.
I now turn to another issue I recently raised which I believe should form part of the strategy to improve the supply of energy: the role that solar energy can play. Residential solar systems are already very popular, reducing bills and often being able to supply excess energy back to the grid at times when it is under pressure. I recently installed solar panels on my own home, adding to the 1.2 million homes that have done the same. Together, these domestic solar PV systems have the same generation capacity as the forthcoming nuclear plant at Hinkley Point. We should be encouraging more households to do the same and helping those with existing systems to get them working more efficiently.
In the March Spring Statement, it was announced that certain energy-saving materials would be eligible for a 0% rate of VAT on both labour and parts, and I welcome that. Solar panels and batteries, which store energy from solar panels for later use, are covered if fitted at the same time, but any battery added separately at a later date is not covered. Retrofit batteries will continue to be subject to VAT at 20%. Modern solar systems usually include a battery, but many systems installed just a few years ago do not. With more efficient and cheaper batteries now available, it makes sense for those with older systems to add a battery. The solar energy their panels generate can be used far more efficiently to the benefit of the home owner and the country overall. However, the 20% VAT rate is likely to deter many. I believe that retrospectively added batteries should also benefit from zero VAT and will bring an amendment to that effect in Committee.
Indeed, there are many other energy-saving items such as double glazing and draught excluders which are not covered by the zero VAT rate. Their take-up would increase were they to be included, which would again be to the benefit of the home owner and the country. I hope the Minister can share his view on this proposal.
Lord Framlingham (Con)
I am listening to the noble Lord’s speech with great interest. I understand that there are thousands and thousands of acres of factory roofs in this country. Would it not be a very good idea for them all to be encouraged to have solar panels?
Lord Foster of Bath (LD)
Indeed. The noble Lord is absolutely right. I was going to come on to that point. The UK Warehousing Association says that if we could get solar panels on all its warehouses, we would get 15 gigawatts of energy. The difficulty—perhaps the Minister can comment on this—is that there is difficulty in many cases with connecting to the grid. We need to find ways to help them achieve that for the benefit that the Minister just mentioned. I hope we can hear the Minister’s views on these issues, without him just shrugging them off as he has in the past, saying that this is a matter for the Chancellor.
Just like warehouses, other forms of non-domestic solar are vital; solar farms provide one such example. But we hear from media reports—the Minister can perhaps confirm whether this is true—that the Environment Secretary wishes to prevent new ones being built on the apparent basis that they are a threat to food security. Yet solar farms are a major UK success story that does not require subsidy. The chief executive of the trade association Solar Energy UK told the Financial Times last week that there is more than £20 billion of private capital in the project pipeline—investment, as well as the jobs and extra finance to support farmers it would bring, that would be lost under the Environment Secretary’s apparent plans. Yet there is no serious evidence to suggest that solar farms present a threat to food security. In fact, the opposite is true. Land around and under solar farms can and does support the UK’s nature recovery and biodiversity targets with wildflower meadows, ponds and wetlands. Solar farms drive investment, create jobs and generate clean electricity. I hope we will hear from the Minister that what we hear about the Environment Secretary’s views is incorrect.
As I said at the beginning, we support the main provisions of the Bill, but believe it is a missed opportunity to, for example, set out a clear strategic plan for addressing energy efficiency and expand and make better use of solar energy.
Baroness Worthington (CB)
My Lords, I am grateful to the Minister for introducing this Second Reading debate. I begin by saying that I welcome the decision to take action to protect consumers and businesses from sustained high energy prices ahead of this winter. Clearly, something needed to be done, and it is good that we are doing it. The energy price guarantee needs a legal footing, the energy bills support scheme needs to be supported too, and obviously extending measures for non-domestic customers is essential. The measures relating to passing on costs to tenants are welcome, as are those on heat networks and complaints. Then there is decoupling the wholesale gas price from the price we all pay.
Something needed to be done and this Bill is at least an attempt to do it, so its content is necessary and to be supported. However, it is possible to be supportive of the content but dismayed by the means by which these issues are being brought forward. You can be supportive of the what but very concerned about the how.
I wonder how we got here. It is not as if we did not know when winter was going to be or as if the invasion of Ukraine was a piece of news. Why then are we here in October, already facing emergency legislation being rushed through on an accelerated timescale when we had an Energy Bill that we were debating? In fact, we still have one, paused somewhere in the ether. I do not know whether I feel pleased or saddened that many people said at the time that that was not the Energy Bill that the country needed. This is evidence that we were right; the Government have now had to bring through emergency legislation to focus on the here and now and the issues of the greatest importance.
The most important issue is of course affordability; therefore, I am glad that we are now focusing on that. We could be sitting here talking about a hydrogen levy being applied to bills to pay for hydrogen heating, which would have been a catastrophic waste of time, so I am pleased that we are now at least focusing on the real issues at hand. However, this is a difficult Bill to engage with. It is highly complex, lots of the detail is missing, and the powers being taken are extraordinary. Therefore the how leaves me feeling very ill-prepared and concerned that we are not going to do the job that we are expected to do, which is to go through the Bill, in great detail and with great care, to prevent unintended consequences and to ensure that it is fit for purpose. I feel that, as it currently stands, we cannot do that job.
There will be unintended consequences, not least the effect on investor confidence. It is not as if we do not have other problems facing the economy at the moment. Just at a time when we need to provide certainty to markets and give investors confidence to invest in the UK and to help us deliver a transition in our energy system to a cleaner, more affordable and secure one, we are taking legislative powers which will have a chilling effect on any investor reading them. They are so broad-ranging and there are so few checks and balances that anyone considering making an investment decision in the coming weeks will be thinking twice, and I suspect that they will think that for as long as these powers last.
That brings me on to one of the big concerns, which is that the sunset clauses in the Bill are far from adequate. In fact, they really do not exist, because if you analyse some of them, at least one of the measures, the cost-plus revenue recall measure, potentially lasts for five years, and even then, it is on a rolling basis—the Secretary of State can continue to extend that deadline. No justification is given that warrants that length of time or that level of potentiality for it to continue indefinitely. The industry is truly scratching its head—I am sure we have all had the briefings pouring into our inboxes—trying to understand how it can be possible that this seemingly unjustified approach is being rushed through at such pace.
I hope that we will hear from the Minister about the response to the Delegated Powers Committee report, which picks on just two to three of the clauses that it considers to be most problematic. Clearly, if it had had more time, it would have picked up a number of other measures, but it was not given enough time, and we received the report only this morning. It has been quite scathing about certain aspects, including Clause 9 and Schedule 1, which it highlights as bringing in “camouflaged legislation” and “sub-delegated powers” which undermine democracy and will undermine the role of this House if it is allowed to continue. It also highlighted Clause 22, where it has serious concerns about the nature of the powers being taken. We need to hear from the Government their response to those concerns.
The noble Lord, Lord Foster of Bath, mentioned that some things are missing from the Bill. I do not think that we want a huge omnibus Bill to be rushed through, so it is right that we focus on the affordability leg of the challenge we face, but imagine if we had taken the same approach to the upstream sector. Here we are, looking at a Bill that makes a set of big interventions into the market, leaving it open-ended and being expected just to trust the Secretary of State’s judgment on many things. The Bill has sweeping powers—it has been described almost as nationalisation by the back door; that is how big an intervention this is—yet, when we look at what happened up stream, the Bill that was passed to introduce the windfall tax, the excess profits levy, contained a circumscribed set of things. It was very narrow. It did not have any open-ended powers. It also had a huge get-out clause where, if the sector could show that it was reinvesting in the North Sea, up to 85% of that windfall tax would be taken away.
That is how that sector was treated: with precise, time-bound interventions. It was given clear ways in which to encourage it to invest. Compare that to this sector. It is night and day. I do not think that this sector is being treated with anything like the same degree of fairness, which we should expect from legislation. Let us turn this on its head and ask what we could have achieved had we taken these powers and applied them to the upstream sector. Imagine if we had had the ability to go in with some legislative strength and say, “We don’t want you to continue to charge us these inflated prices for the product that we license you to extract”. We are a purchaser of these products from the North Sea. Rather than simply allowing the sector to price-set then try to claw the money back, could we not have done what we are doing here and had a conversation about capping the price for our own domestic consumption? If we had taken broader powers at that time and done things correctly, we might have got a better outcome than simply allowing the sector to set whatever price it feels is necessary and then trying to claw it back through a windfall tax.
As I mentioned during our helpful briefing with the Minister, there is an international dimension to everything we are talking about here. This issue needs to be seen in that context. Obviously, we are reliant on imported energy from our neighbours, particularly Norway. I want these sorts of measures and the approach of treating this issue like the emergency it is to be evident in our diplomatic efforts with the countries that supply us with our energy. Norway is a neighbour. It delivers a huge proportion of our gas—about 60% at the moment, according to the latest statistics. What are the Government doing to have a conversation with Norway about keeping the price at a reasonable level so that it does not flow through to consumers in the way it currently does? There must be a mechanism for doing that. It is not a poor country: Norway’s profits will be excessive during this period and will end up in its sovereign wealth fund, having come from our taxpayers and out of our public spending. There must be an international dimension. I would have liked to see this Bill in that much broader context of the international elements of what we are describing.
To return to the question of equality of treatment of upstream and downstream—other noble Lords will talk to this issue, I am sure—there is a distinct difference in the time of intervention. The measures in the energy profits levy will last only until 2025 but, as we have just discussed, some of the measures in this Bill may last for five years and be extended on an indefinite, rolling basis. That is simply not equivalent. There is also the fact that, in this Bill, we talk about revenues whereas, in the other intervention, we talked about profits. Why is it called revenue in one sector and profit in the other? What is the nature of the difference there?
I have touched on the Delegated Powers Committee. I hope that, by the time we get to Committee, amendments will have been tabled to change some of the negative procedures into affirmative ones. I hope that we will insert more parliamentary scrutiny into some of the powers. We will, I am sure, have to think about requirements to consult, which are absent in large parts of the Bill. Then, perhaps, we could look at further tightening up as we get time to digest some of the briefings we are getting.
My final comments are two additional points. I want to understand how the measures in this Bill interact with other elements of government policy: specifically, capacity market payments. I wonder whether we are continuing to make capacity market payments while at the same time asking for money back. I just do not know. Some of those capacity market payments apply to some of these generators, which are outside the CfD. I am thinking here about the nuclear operators. I want to understand how they interact. There is also the carbon pricing support mechanism that we have on generators. I imagine that it is currently suspended, but I would like clarification on that, because it would be crazy for us to be requiring them to pay and then asking them to pay us back.
Finally, and not to broaden the debate too widely, it strikes me that we are dealing with a commodity-based crisis, with the pricing of commodities causing consumers to feel the pain, and with potentially very serious consequences this winter. It strikes me that when we try to intervene in this market, we must always think about how we can offer support to those most in need in a targeted way, reducing the amount of deadweight support that we give out so that we get it to the people who most need it. That must be done efficiently.
We must also think about who can bear the cost of paying for this. We should not be assuming that it should be on the public purse and that we have these uncosted borrowing and spending implications coming out of the Government, because that damages our reputation, increases the cost of capital, and has a big effect on people’s confidence in us as a country.
Where could we do this recovery? Clearly, we can take it out of the electricity market, which is making excessive profits. We can also take it from the upstream oil and gas suppliers, as we have done with the windfall. However, there is another body of people who make money in this market: those involved in the trading of these commodities. Gas, and particularly oil, are highly traded commodities. There are derivatives upon derivatives that sit on top of every physical therm of gas and every barrel of oil.
I do not have much hope for this idea because of everything that we have seen coming from the current Prime Minister, but the City of London does understand commodity trading. It is home to thousands of traders in these commodities. The energy companies have thousands of traders, all making money in this market. It is a very lucrative aspect of the financial services market. I would love it if a Government could have a conversation about whether we should be levying some kind of tax on that aspect, so that it would deflate the speculative bubble that I am certain is sitting on top of some of these energy prices that we are all paying, and which will have a very damaging effect this winter if we do not do something about it.
With those final words, I reiterate my general support for the contents but my very strong concerns for how these powers are being implemented. I look forward to the rest of the debate.
The Lord Bishop of Manchester
My Lords, I am pleased to speak on this important and urgent piece of legislation. I declare my interest as deputy chair of the Church Commissioners’ board of governors. We own stocks in energy companies. In the light of today’s developments in the other place, I should perhaps also declare that I regularly eat tofu.
It is clear that the ongoing cost of living crisis and energy insecurity necessitate swift and comprehensive action. It is estimated that this will adversely impact up to 100,000 households in one of my local authorities, Manchester, this winter. A report published in August by the University of York predicted that more than three quarters of UK households—53 million people—will have been pushed into fuel poverty by January next. It is therefore very welcome that the Government are taking action to help the public and businesses survive the coming winter. It is also good to have the clarity set out in the Bill on the energy price guarantee and the energy bill relief scheme.
However, welcoming the Bill does not mean that I, or my colleagues on these Benches when they are here, believe that it is a latter-day Mary Poppins—practically perfect in every way. While we fully recognise the urgency of this legislation, we hope that His Majesty’s Government will take seriously the calls to amend certain of its details before we reach Committee next week.
The energy price guarantee, setting a limit to the amount households can be charged per unit of gas and electricity, is clearly needed as prices continue to rise rapidly. However, it is questionable whether this should include a temporary suspension of green levies. As Energy UK said earlier this year, reducing support for
“the very solutions that will prevent a repeat of the current crisis”
would not be
“the wisest move”.
Now is the moment not only to tackle the current crisis but to double down on the strategies that will reduce, and eventually eliminate, this nation’s need for imported fuel—a need that puts us at the mercy of the international markets.
The energy bill relief scheme’s support of non-domestic customers is also very necessary. The challenge that businesses, schools, hospitals, churches and many others face is huge. Many of my churches are now working on plans to join the Warm Welcome initiative. They will extend their opening hours through the winter to offer a place for local people to cut their fuel costs by spending less time at home. Warm churches, many with free wi-fi and even free hot drinks, have a key role to play—although I confess that I never imagined, until recently, that I would be commending Church of England buildings to your Lordships’ House for their cosy warmth.
But—and here is the issue—extended opening will lead to even heavier fuel bills. Last week we announced £15 million from Church Commissioners’ funds to help keep our churches warm this winter, but that will go only part of the way. We need further clarity from the Government on how the non-domestic scheme will work in practice.
When we legislate in haste, without the usual opportunities for consultation and debate—as I accept we now must—one golden rule should be that we legislate for the minimum period necessary and with the minimum scope for Ministers to build on that legislation without full public and parliamentary scrutiny. In several respects, as earlier speakers have indicated, the Bill in its present form fails that vital test.
It is of concern that the Bill grants the Secretary of State powers to end the tariff cap when they choose, as well as broad powers to amend the energy price guarantee and energy bill relief scheme. The uncertainty surrounding the tariff cap’s duration, as the noble Baroness, Lady Worthington, has just reminded us, will likely make it more challenging to give energy suppliers the certainty they need to purchase gas and electricity in advance for customers. It is concerning that, while the Government intend these measures to be temporary, the Bill assumes they will last for a minimum of five years—longer than however many Home Secretaries and Chancellors from recent times put together.
As drafted, the Bill lacks important definitions. The term “energy crisis” is left very broad and not clarified. Further definition of this term would be greatly beneficial to ensure that such emergency power measures are used at, and only at, the appropriate time. Secondly, the Bill does not include a definition of the policy instrument it seeks to introduce. Clarifying this would surely improve the Bill. Finally, we must also ensure that, in our desire to address the very immediate and acute crisis of paying our energy bills, we are enabling and not thwarting medium-term and long-term responses to the UK’s energy security situation.
To conclude, I am sure that all noble Lords here today recognise the timely nature of these measures and welcome them overall. I urge the Government to look to improve the details of the Bill further. While I am not personally able to be in my place next Monday, my most reverend and right reverend friends on these Benches will consider tabling or supporting amendments in any areas where we feel that His Majesty’s Government have not proposed satisfactory changes to the draft legislation in response to the issues that I have raised today.
Baroness Bennett of Manor Castle (GP)
My Lords, why are we here today? That is not an existential question but a very practical one. We are here because, without this Bill, households, businesses and institutions —such as the GP surgeries, community centres, libraries and, as the right reverend Prelate just said, churches being lined up as “warm centres” in this fearful winter—would otherwise face unpayable bills.
One direct causal factor here is the actions of President Putin, the instigator of the Russian attack on Ukraine, who just this afternoon announced further sweeping measures of repression on the Ukrainian territory that Russia still occupies and across much of his own nation.
However, the situation is not simple. This is, in the terminology of the planners, a wicked problem. That is not because we had to be in this situation today but because a decade of inaction and wrong action by successive Governments has left us with a fossil fuel-dependent energy system, dreadfully poor-quality housing stock and the great privatisation of homes under the right to buy. My honourable friend in the other place Caroline Lucas has a Private Member’s Bill calling for protection for private renters, a no-fault evictions ban, binding efficiency regulations and a rent freeze to address some of the broader issues for this desperate winter. But many homeowners too will soon be, or are already, in desperate straits, facing soaring mortgage payments. This comes at a time when incomes that were already insecure and inadequate and not keeping up with inflation are leaving people without reserves— 25% of UK households have savings of £2,100 or less.
We are where we are. We have a tottering Government with zero democratic legitimacy and public trust, and no consistency in policy or personnel, and they are offering us this Bill today. That is not to say that I or, I expect, any other noble Lord speaking in this debate will oppose its basic principles. The Government have no choice but to provide major support to households through keeping down the cost of energy to ensure that people do not freeze this winter, and that they will be able to afford a bite of toast, a cup of soup or to fill a hot-water bottle.
However, as our hard-working and fast-working Delegated Powers and Regulatory Reform Committee makes crystal clear, there are a number of powers in this Bill of truly extraordinary scope. We really need a new metaphor. Henry VIII on steroids is no longer adequate; we need instead Henry VIII with rocket boosters strapped to those sturdy legs. I offer that image freely to any cartoonist who wants to run with it.
I am sure that in Committee we will see alternative approaches and will debate the detail, so in the interest of time I am going to take a broad overview of a couple of key points. As a number of noble Lords, particularly the noble Lord, Lord Lennie, have already said, the Bill could create a major bias against renewables and in favour of oil and gas. That is an issue not just for the climate emergency but for future cost considerations for households, as soon as next April. It is effectively a 100% windfall tax on the more established renewable electricity generators, unlike the 25% tax on all gas and oil profits. We could end up in a ridiculous situation where energy producers get a huge tax reduction if they invest to pollute the planet but clean energy does not.
I have a specific question to put to the Minister. It builds on the questions put by the noble Baroness, Lady Worthington. Where do nuclear power stations and biomass firms, such as Drax, sit in this current constellation? The noble Baroness, Lady Worthington, also raised an interesting point about trading in oil and gas. This relates to a question I raised earlier on the economic Statement and the place of the financial sector in influencing our Government’s decision-making. I point the noble Baroness to the fact that, in the past, there have been well-developed proposals for what has been called a Robin Hood tax, or a Tobin tax—a model I prefer. That is something that the Government could well be looking at in this situation to address the points that the noble Baroness raised.
I come to my second key point, which is about community-owned schemes. There is a risk with this Bill that the Government will be subsidising people’s bills with one hand while taking money from their income with the other, when that money could be supporting local community prosperity. Any new regulations created or implemented under Clause 16 must include exemptions for community-owned wind farms, solar farms and hydro schemes that reinvest 100% of their profit back into communities. I note that the Environmental Audit Committee report of 29 April 2021 recognises very clearly the wider benefits from community energy projects. It would be totally counterproductive to take money out of communities while the Government presumably also want to promote social benefit and levelling up. Will the Minister agree to meet community representatives from England, Wales and Scotland to discuss how the implementation and model of the regulations under this clause can be written in a way that does not further handicap the community energy sector that has been left in the lurch over recent years?
I very much agree with the points made by the noble Lord, Lord Foster of Bath, about energy efficiency; it is there in the Long Title. I agree with everything he said about insulation and other energy-efficiency measures. We also need to look at the use of energy in neon lights, neon signs above shops and lighting in shops. Look across the channel—if we are still allowed to do so—where Governments have very quickly brought in a whole range of measures to reduce consumption. Surely we could match or get close to those.
Before coming into the Chamber I was reading Twitter, which your Lordships’ House might judge that I spend quite a bit of time doing. It led me to reflect, as I was assembling this speech, on the views that the public have of Liz Truss, Jeremy Hunt, Jacob Rees-Mogg and an alternative figure who trends as much as any of them, Martin Lewis of the website MoneySavingExpert. I suspect that if you were to offer the powers in this Bill to Mr Lewis, the public might well jump at the idea—indeed, I suspect that many Members of your Lordships’ House might be tempted to do likewise. That really helps to highlight the fact—more evident now than it was half an hour ago—that we have no idea who we could be giving these powers to. That instability is one more reason to say that we simply cannot allow these sweeping, massive powers—which could be deployed capriciously and chaotically, as so much economic decision-making has been in recent weeks—on something as crucial as the energy that will prevent people freezing this winter and ensuring that they can be fed and survive.
Baroness Young of Old Scone (Lab)
My Lords, I put on record that I am not sure I support Martin Lewis for Prime Minister, but anything is possible.
I am sure we all support the need for the Government to act urgently to protect households from the rising costs of energy and to reduce the impact of price rises on the inflation figure. I will not comment on the pig’s ear that the mini-Budget and the subsequent fiscal event have been, other than to express a real, deep sadness at the damage done to our economic credibility and international reputation.
I will focus on three issues in the Bill. I agree with much that the noble Baroness, Lady Worthington, said on two of these issues. The first issue is concern about the nature of the powers the Bill gives to Ministers; the second is concern about the Bill’s impact on energy regulation, the energy market and investment; and the third issue, on the protection offered to off-grid households, has not been raised so far in the debate.
I start with the nature of the powers the Bill gives to Ministers. It must be a pretty rare event to be briefed on the same issues, with the same view, by the Delegated Powers and Regulatory Reform Committee and the energy producers, both fossil fuel and renewable, across Britain. I had not experienced that rather unusual combination of events before.
Although it is completely right that the Government have had to move at pace to design and deliver interventions to protect energy bill payers from even greater price shocks than they are already experiencing, we must not let haste create collateral damage through unintended consequences. The Delegated Powers and Regulatory Reform Committee’s report today is heavily critical—that is probably a mild way of presenting it —of the Bill. It regards the legislative sub-delegation it permits as totally inappropriate. In a previous report it branded such delegation as
“a more egregious erosion of democratic accountability than a simple delegation to a minister to make secondary legislation.”
There is no doubt what the committee thinks about it.
The committee is also critical of Clause 22 and the power to give direction as a Henry VIII power, allowing ministerial direction to modify legislation, including primary legislation. Such direction and modification of legislation would of course not be subject to parliamentary scrutiny. Apart from stressing the need for speed, the Government have so far been unable to explain why the required changes could not be achieved through secondary legislation, subject to parliamentary scrutiny and with the affirmative procedure applying, at least where it is used to modify primary legislation. Perhaps the Minister could respond on that. The Delegated Powers Committee has also asked for a time limit to be placed on the powers of direction, because currently there is none.
Some concerns within the whole range of energy producers fall in line with those of the Delegated Powers Committee. Their fears are that the breadth of powers being awarded to the Secretary of State would enable them to make greater changes to the energy production sectoral rules, without consultation or appeal. The powers being given have no time limit and the definition of an energy crisis, within which the powers are supposed to operate, is so broad that they could reasonably considered to be extensive and permanent.
I am sure the Minister will say that there is a need for speed, and that anything other than nodding through the Bill risks delaying help to the vulnerable people who are most impacted by rising energy prices. However, can he tell the House whether we will hear, before next week’s stages of the Bill, how the Government intend to respond to the two criticisms by the Delegated Powers Committee regarding sub-delegation and direction, which are also relevant to the concerns raised by the generators, both traditional and renewable?
Unlike the noble Lord, Lord Foster of Bath, and despite the Long Title, I do not want to see the remit of the Bill expanded. I would like it to be tightened. The Bill is necessarily having to progress at such a pace that, in the absence of time for proper consultation, it ought to be restricted to the bare minimum of interventions necessary to protect the public for the minimum period of six months, until the next review of the protection measures is due to be put in place, as announced by the Chancellor. Will the Minister agree to review the extent of the Bill and the time limitation of the legislation before we consider its further stages?
The Bill also contains provisions that are unnecessary to achieve the immediate protection of consumers from rising energy prices. For example, the Bill seeks to amend the tariff cap Act, including by removing the sunset clause for the price cap. Can the Minister tell the House why the amendment to the tariff cap Act is necessary for measures which are to be reviewed in three months, and changed in six months?
A further concern on the part of the renewables generators is the cost plus revenue limit, already referred to by the noble Baroness, Lady Worthington. If we have hasty implementation of this limit, focusing on revenue rather than profits, and link that with the Chancellor’s statement that a further extension of the windfall tax is “still on the table”, it absolutely risks shaking the confidence of investors in renewable energy. The Minister did not really respond to the intervention of my noble friend Lord Liddle in respect of the impact on investors. Will he tell the House, when he responds, what assessment has been made of the likely impact on investor confidence as a result of the method of calculating and implementing the CPRL?
My final issue is with the equivalent measures proposed by the Government for people who are off grid—the 1.1 million homes using oil, liquefied petroleum gas and other forms of fuel. I should declare an interest as an off-grid rural home owner, unable to connect to the gas grid. Mine is an older building where there is limited potential for effective energy conservation upgrading, along with a listed building officer who appears not to like heat pumps.
There are 1.1 million homes which are off grid, and they are all in varying circumstances. Many of these off-grid homes are in rural areas and many of the poorest people in rural areas live in them. They are often older buildings with limited potential for energy conservation upgrades, and no cap is proposed for heating oil. The cost of heating oil has gone from 27p per litre in April 2020 to over £1 per litre in April 2022, although it has marginally dropped since then. That is a fourfold increase. The Government have only belatedly offered £100 per annum to oil users to help meet this cost.
The Minister will no doubt say that those off the grid will also benefit from the £400 energy bills support scheme and the £1,200 represented by the cost of living benefits targeted at low-income households. However, the reality is that electricity customers will have over £1,000 of protection through the price cap while oil users and other off-grid homes will get a measly £100. To make matters worse, there is no clarity on when this measly £100 will be paid. People have been buying their winter fuel oil in advance to make sure they have stocks for winter. They have been paying excruciating prices for months, yet all that is on the table is a very small amount, very late in the day, with no clarity as to when.
There are a small number of off-grid users who are not connected to the electricity supply either. How they are going to be reimbursed, as they do not have an electricity contract, is also a question. Can the Minister tell us how the £100 was calculated? How can he assure us that it is fair proportionately for those 1.1 million homes compared with what is being done for those who are on the gas supply? Can he tell us when it will be paid?
Can I also put the Minister on notice? I have recently done that in person. Outside this Bill I was intending to harass him on the further difficulties that off-grid homes are likely to experience as a result of the proposed reforms to the off-grid regulations. These would stop fossil fuel boilers being replaced in off-grid homes from 2026. I hope the Minister is going to be able to assure me at the end of this debate that he is not proceeding with haste towards that while the heat pump market is still in its infancy and not terrifically affordable, efficient or available. I hope he can give me assurances about the off-grid regulations, but I believe that we should tread very carefully in that respect.
If not, should your off-grid oil boiler irretrievably break down the day before Christmas, you could be propelled instantly into a complex, slow, confusing and expensive process of finding a heat pump supplier and installer—they are in pretty short supply—upgrading your insulation and radiators, and funding the upfront costs of the pump and the accompanying energy efficiency upgrades. All of this would be while burning your furniture in the background to keep your granny from freezing to death over the months this would take.
I thank the Minister for our recent conversation about this. Perhaps he can provide clarity to off-grid households on the Government’s response to the off-grid regulations, including when a formal announcement will happen. In the meantime, will he assure the House that this emergency Bill will be stripped down to the minimum measures, both in extent and time, to deliver the basic energy price guarantee to avoid as many unnecessary and inadvertent consequences as possible?
Lord Redesdale (LD)
My Lords, I will be extremely brief at this time of the evening, because although the Bill offers a cornucopia of issues that I would wish to speak on—I see the usual faces who participate in these debates and have followed many of the points raised, especially on energy efficiency—I have only two questions to raise.
We obviously support the Bill, and it is going through very quickly, but there has been a complete lack of consultation. One area that has not been covered in discussions is that, at the beginning of the energy crisis, it was energy retailers who were collapsing and causing a number of problems. Indeed, the Government have had to pick up billions of pounds’ worth of contracts from Bulb. My first question is: have the Minister or the department had any consultation with energy retailers? While we can focus on the suppliers and the issues they face, this is an area that will affect people in the way they are billed, especially with these measures.
A particular worry in relation to the Secretary of State—as mentioned, mostly recently, by the noble Baroness, Lady Young of Old Scone—is that regulatory risk is coming down the line. You could almost envisage that the Government will nationalise the retail space; they do not have to go down through the generator space but could nationalise energy retailers. Has this been any part of the discussions? I must declare my interest in another field as the chief executive of a water retail company. We do the same thing in the water sector, but if I were working for an energy retailer at the moment, I would be extremely worried about the way that the department has taken powers away from Ofgem—which would have given the retailers some form of security—and given itself unlimited powers. So my second question for the Minister is: has he considered a sunset clause on the powers they have taken in this Bill, so that when we move, hopefully, towards a more stable form of energy pricing, Ofgem can be given back the powers that the Secretary of State has taken? This would give some degree of certainty to the energy retailers that their business model will not be destroyed.
The retail marketplace was in trouble before the price increases made their business case very difficult—one of the big retailers, npower, left the marketplace. Therefore, can the Minister first say whether there was consultation and, secondly, whether he would consider a sunset clause?
Baroness Hayman (CB)
My Lords, I declare my interests as set out in the register. Like the noble Lord, Lord Redesdale, I hope that I can be brief, because many of the points that I wanted to make have been made very eloquently by the noble Baronesses, Lady Worthington and Lady Young of Old Scone, and the noble Lord, Lord Foster. Nevertheless, I endorse and emphasise three particular areas that have been spoken about. The first relates to the length and breadth of powers given to the Executive in the Bill. The noble Baroness, Lady Young of Old Scone, said—although she did not use this phrase—that it was something of an unholy alliance between the Delegated Powers Committee and the energy companies. There is a reason for that: all of us as parliamentarians, whether we are interested in energy or not, ought to be worried about this Bill because it goes against the advice of the Delegated Powers Committee in general about these sorts of clauses, and it does so in fine form. So, on principle, we ought to be concerned about those clauses. We ought also to be concerned about the effect that they have, and the uncertainty that they create, on the stability of markets in the energy sector.
The concerns that the energy companies—Energy UK, RenewableUK, National Grid, and businesses such as E.ON and SSE—have all stated come partly from the proposals that we will come to in a moment. I cannot remember the acronym—I am back to, “If it quacks like a duck, and walks like a duck, it is a windfall tax.” I am mixing my metaphors horribly. But they are also concerned about the effect that the lack of certainty that comes with those ill-defined powers for government will have on their ability to function in future and on their investment plans.
I come to the second point that has been made, which I want to support, about the very real risk in this Bill of disincentivising new low-carbon investment because of the way in which the scheme operates—for reasons that we all understand—for those producers that are not under contracts for difference, and the disparity between costs and prices that has occurred. The uncertainties and unfairnesses of the scheme being put forward will disincentivise new, low-carbon investment. Under the energy profits levy, oil and gas extractors are able to offset new investments against the levy. Under the proposed payments for electricity generators, no such provision is made.
Ministers in the other place simply asserted that this would not happen, when it was raised by members of the governing party there. The industry does not think that this would not happen. We absolutely need to encourage new investment in low-carbon technology, including energy storage and carbon renewals. I declare an interest as someone who has old solar panels. I absolutely agree with the point made by the noble Lord, Lord Foster, about issues such as VAT on batteries being retrofitted on those homes. We need investment, and not simply in onshore wind, although, as the Minister knows, I am very keen on investment in new onshore wind. We need to look at new technologies—at batteries, energy storage and carbon renewals and removals—and get ahead of the game, as we have been on renewable energy, on the technologies that will support that and end the problems of intermittency.
Parity could be achieved to ensure a level playing field between fossil fuel investment and investment in renewables by making amendments so that the payments are determined not just by reference to the quantity of the electricity generated but by the new investments made by the firm over the same period. I know that the Minister hopes that this problem could be solved by everyone going over to the contracts for difference and that it would be a power to keep in reserve, but that is not clear in the Bill. The Bill gives very wide-ranging and long-standing powers to the Secretary of State to change this. The oil and gas levy has a sunset clause of December 2023 so, if it is a reserve power, perhaps the Government could clarify a timeframe for the scheme and use the contracts for difference scheme and a shorter sunset clause.
Finally, I reiterate some of the points that the noble Lord, Lord Foster, made on energy efficiency. The Chancellor said that, when he looked at what would come after six months of the current subsidy support scheme, he would look at targeting it on those who need it most and at energy efficiency. I hope that he will do that, and urgently. We need a clear national strategy for energy efficiency that encompasses raising the energy efficiency of existing homes and how they will move to low-carbon heat, supported by a skills pipeline and a single source of advice, with interim targets and secure funding. Setting a clear pathway by the Government showing leadership would not only help to reduce energy demand but reduce bills for customers—and the taxpayer—now, as well as contributing to achieving our net-zero targets.
As the noble Lord, Lord Foster, said, the Government agreed last night to consult on a plan for achieving this for our 1.4 million social housing properties that are below EPC band C. The House felt strongly enough to make the Government put that commitment in the Social Housing (Regulation) Bill. I hope that the Government will consider setting out corresponding plans for the private rented sector and for owner-occupiers.
Lord Rogan (UUP)
My Lords, I welcome the opportunity to add a Northern Ireland perspective to our proceedings on this critically important legislation.
The cost of living crisis continues to bite, with it being confirmed this morning that inflation has returned to a 40-year high. It is set to be a worryingly difficult winter with individuals and families having to choose whether to skip meals or heat their homes. This is a tragic state of affairs in the year 2022. I therefore support the Bill, but I have a number of concerns that I hope the Minister will endeavour to address in his wind-up remarks.
As the noble Lord, Lord Callanan, indicated, there can be no doubt that much of the blame for the current crisis is in the bloody hands of Vladimir Putin, which are choking off energy supplies across Europe and beyond. As the noble Baroness, Lady Bennett of Manor Castle, mentioned, noble Lords will be aware that the situation has become even more grave in recent hours after Mr Putin imposed martial law in the four annexed regions of Ukraine. This is an attempt to turn Ukrainians against each other on the battlefield and place even greater strain on global energy supplies. The sooner he is removed, the better for all of us —including the Russian population.
However, we are where we are, and the UK Government are correct to step forward—as other Governments are doing across Europe—to take the action they are proposing through the legislation before us. However, not for the first time, Northern Ireland finds itself in a peculiar position in comparison with the rest of the United Kingdom. As not all your Lordships may be aware, 68% of Northern Ireland households use home heating oil. That amounts to half a million homes, mostly in rural areas. This compares with around 3% of households in England.
The price of oil in Northern Ireland has rocketed. Figures released by the Consumer Council last week show that the average cost of 900 litres of home heating oil in Northern Ireland has risen to £923.34, up by more than 51% from £472.27 12 months ago. Further, the price has gone up by £50, from £873.31, in just seven days. The noble Baroness, Lady Young of Old Scone, alluded to the £100 support for heating oil. This is particularly relevant to the debate we are having today because, as it stands, the Government are promising to support home heating oil customers in Northern Ireland with a mere £100 payment in the form of a credit to electricity bills—half of this has now been wiped out in the space of a week. This is simply untenable.
At current prices, £100 would pay for a meagre 80 litres of oil, which will not last long and is too small an amount for many suppliers to agree to deliver in the first place. Further, no mechanism is yet in place to even get this money to Northern Ireland consumers, given the absence of an Executive at Stormont. I appeal to the Minister, who we all know is a fair and decent man, to use his good offices to make the case for a rapid rethink on this aspect of the Government’s plans, because the people of Northern Ireland are struggling more now than at any point over the past 25 years.
I am also concerned that the support the Government is offering, both to households and to businesses, will last for only six months. I am well aware that a review with new arrangements is due to be in place by April, but I fear these will be even less generous than those intended to carry the country through the winter, and as I have sought to make clear, in relation to Northern Ireland, they are not generous at all. This is causing great concern for many of my fellow citizens in Ulster. I appreciate that the new review will, of necessity, take a certain period of time, but I appeal to the Minister to urge his colleagues to come to some sort of decision, which must be subject to proper scrutiny by your Lordships and the other place, as a matter of utmost urgency.
This is not the time to dwell upon the arguments for why the ill-advised Northern Ireland protocol is doing so much damage to everyday life in the Province, with businesses facing increased costs and consumers having to cope with a reduced choice of goods and higher prices due to fewer suppliers. However, we do need the sea border to be removed and Northern Ireland’s position as an equal part of the United Kingdom to be fully restored. Yesterday, the Secretary of State for Northern Ireland, Chris Heaton-Harris, made clear that he intends to trigger a new set of elections to Stormont to try to break the logjam if the DUP continues to refuse to take its seats in the Executive. I see little good or little change coming from this proposed election, although my party, the Ulster Unionist Party, will, as always, fight these elections vigorously should they be called.
I urge the Government and the European Union to work together to properly address the problems the protocol is causing. Equally, I ask the Minister and his colleagues, including the Prime Minister herself, to take a more active, personal interest in Northern Ireland and its people. There is a lack of political direction in the United Kingdom at the moment, we all know that, and nowhere more so than in Northern Ireland, which has been without a functioning Government for most of the year. This would not be accepted elsewhere in these islands, and leadership is urgently required in the Province as the cost of living crisis tightens its vicious grip.
After all that, I support the Bill and look forward to the Minister’s thoughts.
Lord Grantchester (Lab)
This Bill comes very late in the present predicament. A poor track record of government action and wrong priorities has brought about a vulnerability to energy shocks, going back to the short-sightedness of the Cameron Government in curtailing wind and solar renewables in 2015.
I welcome the comprehensive nature of the Bill, providing support across domestic users, businesses and charities—all types of users and circumstance facing unprecedented price challenges—but, in doing so, the Bill gives vast new powers to the Secretary of State to intervene in the market. While this is emergency legislation, it is regrettable that your Lordships’ Secondary Legislation Scrutiny Committee has yet to be able to report, while the Delegated Powers Committee could concentrate on only three significant delegations of power, which seem to have been ignored from earlier reports on the delegation of functions.
That there are sunset clauses, to which other speakers have drawn attention, is less than comforting; it highlights the seriousness of the review the Government must undertake and be accountable on before introducing the next stage of measures to follow in April 2023.
As I am in the gap, I will limit my remarks to one or two issues also highlighted throughout the debate. I thank the Minister for the meeting he conducted yesterday on the Bill. In his reply, can he say something about the Government’s outlook regarding the continuation of the tariff cap legislation, pending the sunset of the tariff cap Act of 2018? The Energy Bill has now been paused for the passage of this Bill. In so far as this Bill picks up these provisions, the calls for reform of many of the tariff cap provisions and the operation of Ofgem have become issues of concern. Can the Minister outline how the emergency nature of the present situation will give way to more orderly regulation of the market? At the moment, there is no competition and no switching between suppliers as energy contracts expire, as quotes from new suppliers have ceased.
The second feature I will highlight is the discrepancy in treatment between sources of power. The upstream measures for oil and gas companies that allow the off-setting of the energy profits levy for investment are in contrast to downstream measures on renewables and their surrogate levy—reinvestment there is vital and necessary, but they have not been given equal treatment. This gives a perverse incentive to continue with fossil fuels and carbon-emitting sources of energy.
As the Bill gives powers to the Secretary of State to vary contracts retrospectively on both earlier contracts under the renewables obligation and later contracts varying the contracts for difference into cost-plus, can the Minister explain why the Government have not introduced clauses giving incentives on an even-handed basis? Why do they not review the MER—maximising economic recovery—provisions? They should prioritise the development of renewables, which is where growth will come from for the long-term future of the UK.
The supply chain of renewables and energy-efficiency measures, also vital under ECO4, cannot simply be turned on again after the way it was treated—being shut off during previous government interventions. The climate emergency and net-zero imperatives remain the long-term energy challenge.
Lord Teverson (LD)
My Lords, I once again declare my interest in the energy storage industry. What a Bill—it seems we are all agreed on what we are trying to do, but none of us agrees on how we are going to do it. Yet we have this very short timetable to complete the Bill, effectively now on Tuesday, although it was going to be Monday.
We have had a big break since the Energy Bill, which has somehow disappeared before it got to my best amendments, so I am extremely disappointed personally that it has been postponed. However, I spent my time well over our various recesses with my chainsaw, sawing up all my homegrown logs—they are three years old, so low-particulate. I spent a lot of time on that and am pleased to say that the Teverson household has not yet turned on our central heating. I hope to get beyond that critical date of 22 October when everyone switches it on.
It is interesting that, apart from the Minister, we have not had a contribution from the Conservative Benches tonight, although they have a past Energy Minister on their Benches, the noble Lord, Lord Marland, whom I enjoyed working with during the coalition Government.
A number of themes have come out clearly this evening. The most powerful, from the Delegated Powers Committee, is the huge range that the Government and the Secretary of State have been given here. Clause 22 was mentioned, but I particularly looked at Clause 13(2), which says:
“The Secretary of State may take such other steps as the Secretary of State considers appropriate in response to the energy crisis.”
I was thinking about what that could include. The most obvious step, given one of the main sources of energy price increases, would be to declare war on the country that is causing us this problem. That power seems to be in the Bill. I assume, despite the chaos of the Government at the moment, that will not take place. It illustrates the huge powers that are in the Bill.
I refer specifically to amending licences. I do not think this has been mentioned in the debate although many noble Lords have mentioned powers more generally. I would be interested to understand from the Minister why that particular power is in the Bill because, despite all the advice we have from energy companies, this is the one that seems to move away from the neutral, reliable, regulatory system that we have and seems to breach it. I would be interested to understand why that is included.
We heard also from many Members of the House—the noble Baroness, Lady Hayman, for instance—about the discrimination that there seems to be between renewables and the fossil fuel industry, both in terms of the way they are treated and whether the cost-plus revenue limit is a tax. It is obvious that it is really, but it does not have the ability to bring back money for investment in the industry. There is a difference in those schemes, with the fossil fuel scheme lasting until 2025, I think, and the powers in terms of the renewable sector until 2027. Why is that there? It is inconsistent and goes against government policy, or certainly declared government policy, and perhaps the Minister could explain that further.
We have little information about the cost-plus revenue limit itself. There are great powers for Ministers again. There has been very little consultation. I understand the consultation is still to happen. Perhaps the Minister could tell us what the timetable will be on that: will it be microseconds, hours, or maybe even reach to days? It would be useful to understand something that is so important.
I was pleased to hear from the noble Lord, Lord Rogan, about the £100 payment because I was not aware of the situation in Northern Ireland. I am not on a gas system myself, but in England most people are. It was a very interesting point. I do not fully understand the £100. We all know that if you put a round number in a bill, it is a made up number—that is where round numbers come from. If you have any sense, you put it at £98.20 or £102.50, to convince us that there is some science behind how that amount was reached. I would be interested to understand where that comes from. I think it really does discriminate against a lot of rural Britain that is not able to plug into the gas network, as many people say.
I am a great supporter of contracts for difference. They have been a saviour in many ways. They were introduced during the coalition Government, they are well supported by the present Government, and they seem to offer fantastic balance between fairness in terms of cost and certainty in terms of investment. They have worked well. I like the idea of trying to transition many other power producers on to CfDs. We have here a voluntary mechanism to be able to do it. I understand that one of the selling points the Government are giving this is that it takes out risks or gives certainty, but I still find it difficult to understand why organisations or companies would make that transition. I would be interested to hear more from the Government about why that should be the case.
I will finish by saying that the one thing that strikes me most about the Bill, and this whole philosophy, is that there is not an exit strategy. There is no way out of this. The only way out is if, perchance, energy prices themselves come down in the future. There are all sorts of reasons, I hope globally, why that might be the case, but we have no assurance of it. It seems to me that the fundamental obscenity of this situation is that we are likely as taxpayers to pay altogether on the two schemes—what is in this Bill and what has come before—up to something like £137 billion in current expenditure on keeping bills down, yet our energy infrastructure in this country in terms of housing, as the noble Lord, Lord Foster, said, will be as weak and pathetic as it is now after we have spent that money. How much better it would have been if we had previously invested that money to reduce demand, yet we failed to do that. Once we get through this winter cycle, or maybe the one after, or the one after that, we will still have the same inefficient energy structure in this country that we had before. To me, that is the greatest challenge.
The Bill is needed, but the way it is implemented is far from perfect.
Lord McNicol of West Kilbride (Lab)
My Lords, I thank all noble Lords who have participated in this Second Reading; there have been thoughtful and detailed interventions across the House. These Benches welcome the Bill and will support its passage. However, as raised by my noble friend Lord Lennie in his opening remarks, there are a number of issues we would like to see revised, revisited and resolved. I think the deadline for amendments is tomorrow evening, and we will be working with colleagues across the House to bring forward some detailed amendments which will improve the Bill, as your Lordships’ House always does. I will not repeat my noble friend Lord Lennie’s concerns about the Government’s wider conduct around bringing it here, but I repeat the concerns he and others have with the Bill itself. While it is welcome, it is certainly not perfect, and we truly believe it can be improved in a number of ways.
Families and businesses alike are feeling the hardest pressure as we enter the winter, and the Bill and the measures within it are therefore welcome. Reflecting on the measures themselves, there are a number of deficiencies when compared with the package that the Labour Front Bench in the other House initially proposed—a package, I note, that the Government get closer to day by day. Why not save us all a little bit of time and move to that now?
First, capping the unit price means that prices will still rise by £129, even when taking into account the £400 of support, and many households will pay a lot more than the typical £2,500 figure that the Government keep repeating. Ultimately, 10 million families will spend more than 10% of their income on energy.
Secondly, as we have heard from across the House, the one in six households that use off-grid energy sources for their heating will get little or no support, in stark contrast to the average £1,000 of support they would have got from Labour’s plan. The 4 million households with prepayment meters get no additional support, even though they use 60% of their energy over this period. These families will be spending these long, cold months unsure whether they will be able to keep their homes warm on a day-to-day basis.
Then there is how it will be paid for. Once again, I will not repeat too much of the contributions from my noble friend Lord Lennie and others, but it is clearly bizarre to avoid calling it a “windfall tax” for political reasons. I am not sure it matters what you call it—targeted interventions, periodic payments, an excess profits levy—because it sounds like a windfall tax and it acts like one.
More importantly, not prioritising cheap, homegrown, low-carbon power in favour of expensive, insecure fossil fuels is just not sensible, as we have heard. Onshore wind and solar are being treated as the whipping boy of the industry, shouldering an unfair proportion of the costs while other renewables are protected.
The Government have set out no detail on how the level of the cap will be decided, massively denting investor confidence. There needs to be clarity that the UK will not set a cap which puts us at a disadvantage against the EU equivalent and certainly not higher than the equivalent measures in the oil and gas sector. The windfall tax must be set at a level to contribute significantly to the price support for businesses and consumers—an eye-watering amount, as we heard from the noble Lord, Lord Teverson. The Government must end the absurd multibillion-pound loophole for oil and gas companies on reinvesting. Above all, it needs to be fair to consumers.
There is a vast range of powers contained in the Bill. The Delegated Powers and Regulatory Reform Committee, or DPRRC, has understandably not had enough time to look at all the powers in the Bill in detail, but it is disappointed by the decision to provide in Clauses 9, 11 and 22 powers that it finds inappropriate. Inappropriate: it does not come much clearer than that.
It said that the power in Clause 22 allowing the Secretary of State to give a direction to any energy licence holder or the Northern Ireland regulator needs to be fully explained, as the noble Lord, Lord Rogan, asked. Ministerial decisions need to be subject to parliamentary scrutiny and should be sunsetted commensurate with the other time limits in the Bill—five years is just too long.
The Minister said in his opening speech that the concerns expressed in the DPRRC report needed to be balanced with the needs of consumers benefiting from this Bill. He is right, but we on these Benches believe that there is a way through this that does not have a contradiction. We will bring forward amendments tomorrow which we will discuss on Monday in Committee and on Report.
The Minister will have received representations from industry. Many of its issues have been raised this afternoon. The noble Baroness, Lady Worthington, and others touched on them, but I will quote one:
“Our concerns are not linked to the substance of the policies outlined within the Bill but to the unprecedented and open-ended powers the Bill would confer upon the current and future BEIS Secretary of State without sufficient recourse to Parliament.”
With the changing political winds, you may ask why we on these Benches do not just keep quiet and let this go through. The reason is simple: we believe in parliamentary scrutiny and the benefits it brings to legislation and departmental and ministerial decisions. As the noble Baroness, Lady Worthington, the right reverend Prelate the Bishop of Manchester, my noble friends Lady Young of Old Scone and Lord Liddle, and others have asked, will the Government look again at these clauses?
Similar to the emergency legislation passed during Covid, this legislation gives the Secretary of State powers to extend provision on a rolling basis every six months at a time when investment in our own homegrown energy generation has never been more crucial to UK energy security. The unintended consequences of this Bill for investment could be far and wide-ranging.
We will of course look at all of these issues in more detail in the remaining stages on Monday, so I will finish off by briefly saying that the most important thing to come out of the Bill is not what is contained within it or the issues with those measures but the lack of a long-term plan that it signifies. The Bill’s solution to the problem of some renewable and nuclear electricity generators making windfall profits because of the way they price their electricity, where it was contracted under the renewable obligation arrangement and pegged towards expensive gas, is a short-term fix. There is no long-term solution in the Bill; or, as the noble Lord, Lord Teverson, said, there is no exit strategy. We would include powers to solve this problem in the long term by delinking the price of low-carbon power from that of gas for good. Unless the Government dramatically change course on their fundamental approach, we could face similar crises in the years ahead.
What we need is a sprint towards green energy—towards solar, wind, hydrogen and nuclear—and, as the noble Lord, Lord Foster, said, energy efficiency. I know that the Minister often talks about an energy mix, and again, he is right, but it is about prioritising those sources over oil and gas. Not pushing forward with these over the last 12 years has significantly raised bills and imports, and undermined our own energy security, contributing to the crisis we are facing today. We cannot let this be repeated. It is time for change.
Lord Callanan (Con)
I thank all noble Lords for their contributions to this important debate today. I will respond to as many as possible of the issues that were raised in the time that is available to me.
I start by briefly reminding noble Lords of the importance of the Bill. Russia’s illegal war in Ukraine has led to a global energy crisis, and the Government are taking urgent action now to support households and businesses across the UK which would otherwise face significant financial difficulties this winter. I know that many speakers in the debate recognised that. This legislation will ensure that households, businesses and other bodies such as charities and public organisations—and indeed churches—receive the financial support that they need by providing the framework to deliver the Government’s energy support package. In so doing, the Bill will help drive down inflation and support economic growth.
I turn to points raised by noble Lords in their contributions. First, I thank the noble Lord, Lord Lennie, and the noble Baroness, Lady Blake, for their letter that I received this morning on the Energy Security Bill. I will respond to them in writing shortly, but I assure the House that the government remain committed to the important measures in that Bill to deliver change in the energy system over the longer term. We have to deal with the short-term crisis but we are not forgetting the longer-term context, and many of the measures in that Bill are to ensure that changes are made in the regulations that will benefit us all in the long term.
In the meantime, we are facing a global energy crisis, and we must ensure that we prioritise delivering the measures in this Bill to provide that much-needed support to consumers. I will say a few words about why it is so important to get this legislation passed soon. I thank the noble Baroness, Lady Worthington, and the right reverend Prelate the Bishop of Manchester for raising the important issue of the speed of this legislation; I readily accept that we are going through it extremely rapidly.
Households and businesses face rising energy prices, and it is essential that this legislation and subsequent secondary legislation that will be laid under it is in place by the end of this month. This is to allow for urgent financial assistance for householders, businesses and other organisations across the UK ahead of the winter, and particularly from the start of November.
Building on the DPRRC’s report, the noble Lords, Lord Lennie, Lord Teverson, Lord Foster and Lord Grantchester, and the noble Baronesses, Lady Worthington and Lady Young, raised concerns about the delegated powers in the Bill. Again, I pay tribute to the work of the DPRRC and thank the committee for its report, which I will also respond to shortly. The Bill takes a relatively limited number of powers but I readily accept that they are broad ones. They are essential for ensuring that these crucial support schemes can be stood up at pace. The House will appreciate the speed at which this measure has been drafted. I pay tribute to the exemplary work of the officials involved in delivering it; it has involved lots of late nights and weekend working for them, for which I thank them. It is essential that these measures are delivered as intended. To be frank with noble Lords, these powers will allow us to do this with the appropriate scrutiny.
As I said in my introduction, the vast majority of the powers in the Bill are effectively time-limited through either direct sunsetting—normally, noble Lords are calling on me to sunset powers—their link to other powers in the Bill, or indeed the duration of this energy crisis. The ability to extend time limits ensures that we have sufficient scope if we need to change them over time. I assure the House that noble Lords will of course have an opportunity for further scrutiny on the details of those schemes via the secondary legislation route, much of which is subject to the affirmative procedure.
A number of noble Lords raised concerns about the powers in Clauses 21 and 22, specifically powers to modify licences and give direction; those concerns were also reflected in the DPRRC’s report. In my view, these powers are necessary to facilitate the delivery of a number of support schemes, including the Northern Ireland energy bills support scheme and the alternative fuel payment for domestic and, potentially, non-domestic customers as well. Let me make it clear to the House that, under the terms of the Bill, Clauses 21 and 22 must be used in response to the current energy crisis. Using the powers in either clause in relation to action under any of the other powers in the Bill is in effect time- limited, as these powers are themselves time-limited.
As expected, and as always happens in these debates, many noble Lords raised the important issue of energy efficiency. A crisis gives even greater urgency for action to make homes more energy efficient in order to reduce energy bills and, crucially, to tackle fuel poverty. That is why the Government are investing £12 billion in our Help to Heat scheme, including £1.5 billion to upgrade around 130,000 social housing and low-income properties in England. I was able to launch an additional £800 million of that scheme in discussions with housing associations and local authorities only last week.
The Government have also announced further support on energy efficiency through the ECO Plus measures. This scheme was announced in the mini-Budget—it is one of the few measures from the mini-Budget to have survived so far. It will help hundreds of thousands of households to reduce their energy bills by targeting that support to the most vulnerable. Of course, as it is an obligation, we will consult on the detailed policy design of ECO Plus shortly; I am sure that noble Lords who take an interest in these matters will want to contribute. We hope to have the scheme up and running by April next year.
In addition, our energy security strategy sets out further commitments to support property owners, including facilitating low-cost finance from retail lenders to help consumers upgrade their properties at low cost. This includes zero-rating VAT on the installation of insulation and low-carbon heating for the next five years. That will potentially save up to £2,000 on the cost of an air source heat pump—should the noble Baroness, Lady Young of Old Scone, want to move in that direction.
The noble Lord, Lord Lennie, and the noble Baroness, Lady Young, raised the cost-plus revenue limit. The Government recognise the importance of dispatchable and baseload generation for security of supply. The low-carbon technologies that can deliver these types of power, such as biomass and nuclear, tend to have higher input costs. This is being considered as part of the detailed policy design for the cost-plus revenue limit. We intend the limit to last only for as long as it is strictly necessary. A number of noble Lords referred to the five-year sunset provision. That would allow the Government to respond to the immediate effects of high wholesale prices on consumers while ensuring their ongoing protection if gas prices remain abnormally high for a prolonged period beyond current expectations.
Lord Teverson (LD)
Can the Minister clarify that renewables on the cost-plus, whether hydro, solar, wind, AD or whatever, will be assessed separately within those different sectors, rather than it being an across-the-board average?
Lord Callanan (Con)
That goes back to the point I made in my introduction. There are many different circumstances facing different providers. Some of them have pointed out quite loudly that they have sold their power in long-term contracts, et cetera, so it varies from provider to provider. However, the noble Lord gives me the opportunity to say that the precise mechanics of the temporary cost-plus revenue limit will of course be subject to a full consultation, which we will launch shortly.
The noble Baroness, Lady Worthington, raised important issues on who should bear the cost of the measures. The energy profits levy on oil and gas and the cost-plus revenue limit that have been announced for low-carbon generators will help to fund these schemes. The scale of the crisis means that the sums involved are beyond those two mechanisms so higher borrowing will be necessary to pay for this temporary support, and it is right that we use all the available tools to support businesses through this crisis and to spread the costs over time.
The right reverend Prelate the Bishop of Manchester, the noble Baroness, Lady Young—
Baroness Worthington (CB)
I am sorry to interrupt when the Minister is trying to finish, but on a point of clarification, with the profits levy, up to 85% of that tax can be defrayed by the Government investing in North Sea oil and gas, keeping us hooked on a volatile and unpredictable source of fossil fuels, whereas this cost-plus recovery has no provision for generators to invest in cleaner power. Why is there not equal treatment?
Lord Callanan (Con)
There are separate provisions allowing generators to invest in clean power. The aforementioned contracts for difference scheme is doing exactly that, providing the incentive for them to invest in clean power. We have increased the number of CfD rounds that we have launched. As the noble Lord, Lord Teverson, said, this has proved to be an immensely successful scheme. I pay tribute to the officials who designed it. It has been so successful that most of the rest of Europe is proposing to adopt a very similar scheme for their own wind generation. It is precisely because that mechanism exists and provides guaranteed revenue for their investments that those incentives that the noble Baroness refers to already exist.
The right reverend Prelate the Bishop of Manchester, the noble Baroness, Lady Young, and the noble Lord, Lord Grantchester, all raised important points regarding the default tariff cap. The energy price guarantee will now determine the prices that households pay for their energy. However, we are retaining the price cap to help deliver this energy price guarantee. Clause 20 will ensure that Ofgem continues to calculate the cap level to determine what it costs an efficient energy supplier to provide a household with gas and/or electricity. Of course, this will not determine the prices that householders pay, but it will enable the Government to identify what level of support is needed to deliver the prices in this energy price guarantee. The price cap is a mechanism that has been proven to prevent excessive charging and to reflect the real costs of supplying energy. Retaining it will ensure that suppliers price in line with the energy price guarantee and that public funds are used efficiently.
The noble Lord, Lord Foster, gave his view that the Bill treats renewables less favourably than oil and gas. No energy firms, however they produce, should be profiting unduly from Russia’s war in Ukraine, whether they generate low-carbon or fossil-fuel energy. Current price levels in electricity markets are far higher than any energy firm could possibly have envisaged or forecast, or would have predicted they would need, to continue investing in renewables.
Low-carbon electricity generation from renewables and nuclear will be key to securing more low-cost homegrown energy, which is why we continue to support investments in the sector. I remind noble Lords of the point I have made continuously: the schemes have been extremely successful. We have the highest proportion of offshore wind energy in Europe, by far. We have the second-highest proportion in the world, and we have extremely ambitious plans to continue investing and producing more of it, precisely because the scheme has proven so successful and is delivering much cheaper power. It is our flagship scheme and it has worked a treat, as I said—so successfully that other countries are now adopting it. In 2023, the scheme will move to annual auctions, helping to further accelerate the deployment of clean low-cost generation, which is something that I know all contributors will welcome.
The energy price guarantee and the energy bill relief scheme support millions of householders and businesses with rising energy costs. The Chancellor made clear that they will continue to do so from now until next April. Looking beyond that, I am sure noble Lords would be interested to know that the Prime Minister and Chancellor have agreed that it would be irresponsible for the Government to continue exposing the public finances to unlimited volatility of international gas prices. Therefore, it is the Government’s intention that, after this winter, support is better focused on the most vulnerable households and those least able to pay, with greater incentives to improve energy efficiency.
The noble Lord, Lord Foster, raised issues on the essential importance of encouraging solar energy use in households. I completely agree with the noble Lord. We are committed to solar power, which not only is good for the environment but at the moment represents the cheapest way to generate electricity in the UK, albeit intermittently. The British Energy Security Strategy sets out an expectation of 70 gigawatts installed solar capacity in the UK by 2035. To achieve that and meet this increased ambition, we will need a significant increase in both ground-mounted and rooftop solar in the 2020s and beyond. The noble Lord will be pleased to know that there is a healthy pipeline of ground-mounted projects, currently amounting to around 19 gigawatts across Great Britain, which either are in scoping or have already submitted planning applications.
The noble Baroness, Lady Worthington, asked me yesterday and again today about our negotiations with Norway.
Lord Foster of Bath (LD)
I apologise; I thought the Minister was going to continue points about solar. Before he finishes, could he respond to the question I asked on the Environment Secretary’s plans to stop further solar farms? Could he update us on that situation?
Lord Callanan (Con)
I have referred to the pipeline of solar for which planning permission has already been granted or that is in scope. I think the noble Lord can see that there is a considerable pipeline of solar plants that are already coming on stream and that our target remains in place.
Baroness Young of Old Scone (Lab)
Would the Minister give way on that point? I hope we can depend on him to make the point to the Secretary of State for the Environment that, if he had a proper land use strategy, he would not have a conflict between wind farms, solar farms and agricultural land. We would have a proper planned process to use our land wisely.
Lord Callanan (Con)
I thank the noble Baroness for that point. It is now on the record, and I will ensure that it is drawn to the attention of the Secretary of State for the Environment. In answer to the point made by the noble Baroness, Lady Worthington, about our negotiations with Norway, following the successful vaccine task force, we have created a new energy supply task force under the leadership of the excellent lady Maddie McTernan. She had such success with vaccines that we have now given her an even tougher challenge to solve. She and her team are already negotiating new long-term energy contracts with domestic and international gas suppliers to bring down the cost of the intervention immediately. The Government are opening negotiations with domestic and international gas suppliers on the prospects of longer term, lower cost gas contracts.
The right reverend Prelate the Bishop of Manchester was wrong to question whether the Bill should include suspension of green levies. In fact, we have not suspended the green levies in Great Britain; £150 of the savings will be delivered by temporarily suspending environmental and social costs being passed on to consumers. They were levied on bills, but they will now be directly funded by the Exchequer under the energy price guarantee. The Whip is telling me that I am running out of time, so apologies if I do not manage to get all the remaining points in. Those costs will be transferred to the Exchequer, so they are not borne by consumers, but they are present and still funded to help us benefit from low-carbon electricity generation.
The noble Baroness, Lady Bennett, asked about community-owned energy schemes, and we recognise the role community and locally owned renewable energy schemes can and do play in supporting the UK’s national net zero targets. These projects help encourage innovation and investment as well as community engagement with the energy challenge.
The noble Baroness, Lady Young, asked about the £100 alternative fuel payment, as did the noble Lord, Lord Rogan. This is designed by reference to past increases in the cost of heating oil in the year to October 2022. We will be monitoring the price of heating oil and other alternative fuels closely in the months ahead to see whether further payments are required at a future point in time. The noble Baroness also asked about the off-grid gas consultation. As I said to her in our conversation, we consulted last year on plans to phase out the use of fossil fuel heating on the gas grid. We have not made any decisions yet on how to move forward. The noble Baroness will be the first to know when those decisions are made and announced.
If the House will permit me just a little bit of time to say something on the important subject of Northern Ireland, I would like to touch on our equivalent support for Northern Ireland, in response to the noble Lord, Lord Rogan. In the absence of an Executive, the UK Government are taking steps to ensure that households and businesses across the whole of the UK are able to access support to manage their energy bills. In doing so we are ensuring that households and non-domestic consumers in Northern Ireland receive an equivalent level of support to those in Great Britain. I am sure that will reassure the noble Lord.
To conclude, I am encouraged by the support for the Bill, and I thank, in particular, noble Lords in the Opposition for that. I realise, of course, that on all the various subjects noble Lords have many other points that they wish to make and to put forward, but I think there is general support across the House for the Bill. As always, I look forward to continuing constructive engagement as the Bill progresses through your Lordships’ House.
Statement of Changes in Immigration Rules
(2 years, 1 month ago)
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Lord Hylton
That this House regrets that the Statement of Changes in Immigration Rules (HC17), published on 11 May, implements plans to differentiate between refugees depending on how they entered the United Kingdom, does not provide for safe routes, and was not accompanied by an impact assessment on the effect of the changes. 2nd Report from the Secondary Legislation Scrutiny Committee
Lord Hylton (CB)
My Lords, this debate should really start with a health warning. I say that not because of the time of day but because the official list of changes in the Immigration Rules since 1994 covers more than one large page of closely typed A4. There have been some four to seven changes every year since then. The good news is that the Secretary of State will review the changes made since 2017, produce a report and publish it. We may get some insights into the various zig-zags of policies over the years.
I turn now to the statement of changes of 11 May, referred to in my Motion. The statement implements Section 12 of the principal Act. I regret that it is equally discriminatory, giving successful asylum applicants different rights depending on how they arrived here. Group 1 will be a very small group who arrived here direct from the country they fled or who entered under another visa and then applied for protection—for example, following a change of regime. Group 2 applies to successful asylum applicants who arrived via other countries. They will be the great majority of recognised refugees in future.
Group 1 will get status and leave to stay for five years, after which they can apply to remain permanently. They can sponsor a partner and any children under 18. By contrast, group 2 will gain status and leave to stay for 18 months only. In the last of those 18 months they may apply for an extension, but they will have no automatic right to settlement here. Reunion will be possible only for a spouse or child who cannot safely live elsewhere. Your Lordships will see that there is a huge difference in the treatment of the two groups, although both will have been accepted as bona fide refugees.
The British Red Cross, which I thank for its information, points out that refugees should have support based on their need for protection, not their method of arrival. Short periods of leave to enter will harm integration, making it difficult to learn new skills and gain employment. The Home Office will have to decide on applications to extend the leave to remain. This resource could be better used in reducing the backlog and giving better and quicker first decisions. I note that on 30 June the backlog was more than 99,000 cases.
The restrictions on family sponsorships will harm women and children by removing, for many, an existing safe method of arriving. This in turn may lead to more dependants attempting dangerous journeys to reach their next of kin. Lasting family separation and uncertainty will make it harder for recognised refugees to integrate.
The new regulations on family reunion may be slightly clearer than the old ones. There can be little doubt that they are more restrictive, but the complexities are such that free legal aid would be extremely helpful. At present it is not available. Therefore, much will depend on guidance that we have yet to see and on training for caseworkers and sympathetic implementation.
I come now to the special case of El Salvador, from which in 2017 there were only 38 asylum applications. Then, because of that Government’s harsh repression, the figures rose by stages to reach 658 in the first six months of 2022. Over the last two years, more than half of these applicants received refugee status or humanitarian protection. Why has this safe and legal route now been closed?
The May regulations had no impact assessment. I therefore ask: will one be published, in particular on group 2 refugees? Shorter periods of leave, no automatic route to settlement and restrictions on family reunion are the most important points to be considered.
The success of the two schemes for Ukrainians shows what can be done when there is good will and good co-operation all round. Over 133,000 entry clearance visas were granted for Ukrainians in the year ending last June. I have met a number of those who have benefited, and simply ask that every effort be made to enable people with good qualifications and good English to move into suitable work.
The media have enjoyed a field day over cross-Channel arrivals, but there can be no doubt about the desperation on the part of those facing the risks. We can gain a sense of proportion by comparing the numbers of cross-Channel arrivals with the much greater volume of visas provided for students and workers, and indeed for Ukrainians and British overseas nationals.
I have, I hope, outlined the weaknesses and omissions in these changes to the rules. They provide serious grounds for regret. I trust that subsequent speakers will touch on positive steps that this country could take to prevent loss of life in the channel by closer co-operation with France. If speakers can offer new ways of making the asylum process more humane, I will be delighted. I beg to move the Motion in my name.
Lord Lilley (Con)
My Lords, I begin by saying how sad I am to see the Home Secretary depart from her job today. I had very high regard for her; she brought great legal expertise and determination together. At the same time, I wish Grant Shapps well in his new job as Home Secretary. He was my neighbour in Hertfordshire and is a long-standing friend of mine. I hope that he will pursue with equal diligence the obligations we have and the commitments that we had in our manifesto.
However, there is little point in tidying up the law in the way that we are doing today if the law itself can be turned inside out by the courts. It is pretty clear that that is what has happened time and again in recent years. As a result, we have some 250,000 rejected—failed—asylum seekers in this country who, since 2005, have not been returned to their countries or removed from this country. That is in addition to the 125,000 who have been granted asylum.
The rate of acceptance on first application in this country suddenly doubled after the Windrush scandal, although it is hard to see what the logic of that doubling was. The effect is that we now accept twice as high a proportion of asylum seekers on first application as does France, on the other side of the channel—which is doubtless one reason why people choose to leave France and come here, even by dangerous routes.
Can I just deal with three or four delusions, illusions or mistakes that are very prevalent? The first is that we have no safe routes into this country. The noble Lord, Lord Hylton, made some very sensible points, particularly about the constant change in the regulations we face. We have some 13 different routes and they have exploded in numbers over the last year. We have seen the best part of 300,000 people arrive in this country and be accepted by safe migration routes, including 150,000 from Ukraine. That is a wonderful way we are responding to the problems in Ukraine and almost all of them want to return if and when peace returns to Ukraine. Sadly, that may not be immediate and many of them will put down roots in this country, so will add to our population. They are wonderful people, but we have to take into account the fact that we have a massive increase in our population. There were 120,000 from Hong Kong—again, one understands why—and 20,000 from Afghanistan. All arrived by safe routes. So when President Macron says that the problem with Britain is that is has no safe routes, he is simply out of touch with what is happening in this country.
The noble Lord, Lord Hylton, said that there can be no doubt about the desperation of people who cross the channel in small boats to come to this country. Let us be quite clear: they are coming from France, Germany and Belgium. If they are desperate, what is it about those countries that makes them desperate? They are not coming here from Afghanistan or Iran by boat; they are coming from France and Germany. One of the reasons can be that they have applied or could apply in those countries but know they would be rejected, whereas here our system—having been degraded by constant legal undermining of the rules—makes it much more likely that they will be accepted, even if other countries would not consider them legitimate asylum seekers.
The third point I want to make is that it is an illusion to say we have taken back control of immigration. Over the last year we have given over 1 million visas to people to come and settle in this country. Where are the houses going to be?
Lord Paddick (LD)
I am grateful to the noble Lord for giving way. I was agreeing with him about the numbers who have been given visas—a tiny fraction of whom are asylum seekers. I am not applauding the millions of people who are being given visas; I was agreeing with him that that was happening.
Lord Lilley (Con)
I misinterpreted his “Great”; he was saying that I am great rather than that the number is great. That is good.
It is an extraordinary thing: 1 million people. The problem with immigration is not that immigrants are different from us, but that they are exactly the same. They need homes to live in, medical facilities, schools and everything else. We have not got enough for the existing population, so we ought to be thinking very clearly: is it wise to issue 1 million visas for people to come and live in this country?
Finally, it is constantly asserted that migration is good for economic growth. In the last decade and a half, we have had the highest rate of immigration to this country in our history and the slowest growth in productivity. I rest my case.
Baroness Falkner of Margravine (CB)
My Lords, I want to briefly make some observations about the remarks of the noble Lord, Lord Lilley, and ask the Minister one or two questions of clarification. Before I do, I point to my interests in the register and make it clear that I am speaking in a personal capacity.
Lord Lilley (Con)
First, we do have a system of numbers in this country. Does the noble Baroness not know about the national insurance number? You cannot get a job without it. Secondly, I was strongly against identity cards—
Viscount Younger of Leckie (Con)
I would be grateful if my noble friend addressed the House rather than turned behind when speaking.
Lord Lilley (Con)
I apologise; I am still a new boy, really.
In addition, I was not including overstayers in any of the numbers that I mentioned, so they are in addition to all those numbers.
Baroness Falkner of Margravine (CB)
The noble Lord is quite right, but they add to all the pressures he was talking about. Perhaps if we had a more rigorous method of knowing who was actually here, and by what route they came, we would be able to ascertain more clearly—and certainly more fairly—whether they should stay or not.
My final point to the Minister is related to but, I admit, slightly removed from this debate. The Home Office has announced that it is to do away with the golden visa route into the country, which is how kleptocrats arrive here. When we think of people coming here—documented or undocumented, but particularly those who have legal documentation—it is not particularly fair that there are people who buy themselves a route into the country by having millions, whereas those who are genuinely in distress and concerned for their lives must go through hurdles such as those identified by the noble Lord, Lord Hylton.
Lord Horam (Con)
I have some sympathy with the comments of the noble Baroness on the subject of people overstaying and on the right to remain here. In particular, she made the point that, very often, students overstay—that after their two-year period here they stay on, and so forth. She made the point that neither the coalition Government nor the Conservative Governments have gone along with the idea of having personal identification cards of any kind. She is right about that—but, with respect, that is rather a sledge- hammer to crack a nut. To some extent, it is a responsibility on people who sponsor students to come to this country, for example, to find out whether they have complied with the rules and go back to the country or overstay. There is some personal responsibility on organisations—companies, the NHS and public organisations—to follow that up. That would be simpler than having such an expensive solution. I think personal identification cards for the whole population were calculated as costing about £20 billion.
Baroness Falkner of Margravine (CB)
Very briefly, I was also referring to undocumented people who overstay tourist visas and stay on here. If the noble Lord, Lord Lilley, needs any proof of that, he needs to go to—I should not single out any particular nationality —a fine ethnic minority restaurant in Birmingham and go into the back rooms. He will see plenty of those. Then there are Deliveroo drivers, for instance.
Lord Horam (Con)
I take that point.
On the main point made by the noble Lord, Lord Hylton, I sympathise with his point about the changes in the Immigration Rules. They have been extensive; there has been a huge number of changes—almost every few months, frankly—and they are practically incomprehensible. It is a paradise for lawyers; the detail they go into and the language they use is virtually incomprehensible. The noble Lord who spoke for the Opposition is nodding with some feeling on that. It is incredibly difficult to understand what is going on half the time. For heaven’s sake, there must be some way of simplifying all this for the ordinary person in the street.
I wish, more than anything else, for some transparency. I am in favour of a transparent framework for asylum seekers and economic migrants of all kinds, which would be debated in the House of Commons annually. You would have a cap for a year; it would be looked at, people would understand where it came from and particular interest groups would be consulted. We could do that for the year and then look at it again to see what had happened—what had gone wrong, what had gone right and so on. We could have an annual debate, like the Budget debate—although perhaps not as long; maybe a day’s debate—in the House of Commons and the House of Lords, so that everyone could have their say about this. It would be a much more transparent and sensible way, and it could deal with some of the ignorance and myths, which, as my noble friend Lord Lilley pointed out, surround this whole subject of immigration and asylum seeking.
Having said that, I do not disagree with the noble Lord, Lord Hylton, on his point in his Motion. The fact is that there is a huge problem here of human trafficking—we all know that; it is an international business. The smugglers—they are smugglers in effect—started off with drugs and tobacco and so forth, and now they deal in human beings. It is an international trade and all western European countries are facing this difficulty. It is completely illegal and to deal with it you really have to make a differentiation in law. You cannot deal simultaneously, in the same breath, with people who abide by the rules and who come here under acknowledged schemes, such as the Ukrainians, the Hong Kong people, the Afghans and so forth—they are large in number and we admit them freely and gladly to this country—and people from Albania who pay someone £2,000 to illegally enter this country. You cannot treat those people on the same basis; it is impossible to deal with the human trafficking and have the same legal basis for both activities.
Secondly, on safe routes, again, my noble friend Lord Lilley made the point that there is quite a large number of safe routes into this country. How far can you really expand them, realistically? Even now, Manston camp is taking in 3,000 asylum-seeking people, and it is really capable of taking only 1,000. With hotels in the north of England and the Midlands full of asylum seekers, we are now getting to the point where the hotels can no longer take them, because they want to do ordinary tourist business, so local authorities will be asked to take more. That means that council properties will be consumed by asylum seekers and will not therefore be available to local people. Of course, inevitably, it is the poorer parts of the country where all these people end up; they do not go to the Cotswolds or Hampstead because of the house prices. They end up in Blackpool, Middlesbrough or Darlington. Therefore, ordinary people—very often the poorest people—suffer the consequences. In all conscience, we have to consider that, as well as our natural and understandable concern about the position of genuine asylum seekers.
My final point is that, however many safe routes you have, there will still be trafficking across the channel, and people saying to those in Albania, Afghanistan or wherever, “We can get you into England—if you pay us a couple of thousand quid, we will get you across the channel.” However many safe routes you have and however much you expand that—I do not think that it can be expanded too far, for all the other reasons I have given—it will happen none the less. Therefore, there must be some system of deterrence, and I believe that the Government’s proposals—which have not yet come into practice of course because of all the legal objections—are the only answer to deterring people totally.
We are already seeing that some Albanians have decided not to apply for asylum in this country because they are afraid of being sent to Rwanda. They have been sent within 24 hours back to Albania under the agreement that we have with the Albanian Government. In a small way, even despite all the legal problems and judicial reviews and so on, you can see a deterrent factor working. The Government are pursuing the right angle here; it is not working in practice at the moment because of all the judicial reviews and legal difficulties, which is a great pity.
We are in a democratic society, where there is a clear public will to deal with illegal immigration. The Government—the major party—have voted it through the Commons and we have voted the Bill through the House of Lords. For it then to be stopped, potentially for months and months, by judicial activity, makes it seem that democracy is not working properly. That should not be allowed to happen in a functioning country such as ours. On that basis, I cannot agree with the noble Lord, Lord Hylton, despite understanding his desire for the whole issue to be treated with great humanity, with which I would agree.
Lord Dubs (Lab)
My Lords, I congratulate the noble Lord, Lord Hylton, on securing this debate; I very much agree with what he says about the Immigration Rules.
Before going too deeply into the details, I want to say that I agree with the noble Lord, Lord Horam, about the complexity of the Immigration Rules. They are so difficult. I chanced upon a document produced by the Law Commission—I do not know how long it has been out; it does not have a date. It says at the beginning that the Law Commission was asked to review the Immigration Rules to identify ways in which they could be redrafted to make them simpler and more accessible. The one thing I can say about the rules we are debating today is that they are certainly not simple or accessible. I have read them about three times, and I have read the explanation of the rules about three times, and I am still not very much the wiser. I commend to the Home Office the Law Commission’s report. If it was written some time ago, it is still very much up to date. The idea is that the rules should always be drafted in such a way that they are meaningful and comprehensible.
I will comment very briefly on one or two things that have been said. I am personally very much in sympathy with what the noble Baroness, Lady Falkner, said about identification. I do not think that I can bring my own Labour Party with me on this, but I believe that, in terms of the rights of individuals, it would be an improvement. If any noble Lords have tried to open a building society savings account, they will know of the number of documents that one has to produce as evidence that one is who one is—sometimes, I just take my passport with me, as it is a lot simpler than anything else. I also have a little advice: when one is moving house, make sure that your wife or partner is also named on the utility bills, because there comes a point when you have to produce evidence for her as well—or the other way round. I have gone through this in getting a blue badge for my wife; it is complicated, because one has to get all this evidence. ID cards might well be helpful, and we should debate that more fully another day.
I was a little surprised by the noble Lord, Lord Lilley, when he said that more people claim asylum in the UK than in France. I was not aware of that. It was my understanding—and the Minister may be able to give us the figures—that of the people arriving in France, far more claim asylum in France than seek to come to this country to claim asylum here.
Lord Lilley (Con)
I am sorry if I was unclear. I said that of those who make a claim in France, only half as many are granted asylum on first application as in the UK.
Lord Dubs (Lab)
I am grateful to the noble Lord. I think that is an argument on my side rather than on his, though, is it not? If more people who get to this country are given refugee status because of the claim they have made, surely that is an argument to say that we should look differently at groups 1 and 2, which would lessen their chances, if I have understood it correctly. At any rate, my proposition is that the majority of people reaching France claim asylum in France; only a minority seek to come here. It is surely the lack of safe and legal routes from France to this country that has given the traffickers a field day. The answer must be to have a better relationship with France and to do this on a more co-operative basis. Rather than simply criticising the French, I think we have to co-operate with them as the only way to move forward.
The Earl of Leicester (Con)
My Lords, I add my support to the Government and the aims and objectives of this immigration statement of 11 May. Respectfully, I do not support the regret Motion tabled by the noble Lord, Lord Hylton. I found it very interesting to listen to the arguments of my noble friends Lord Horam and Lord Lilley, with which I agree.
Of course I empathise with the terrified people whose desperation is so great that they risk their lives, and their families’ lives, to seek a safe refuge. This is an unimaginable position for anyone. However, I also accept that something effective must be done at our borders to stop criminals intent on abusing these fears and risking people’s lives. It cannot be right that a country such as ours, which stands proudly for protecting the vulnerable, standing strongly with those who have been wronged and upholding the highest standards of human rights and justice, should at the same time, due to inaction or inefficient action, be facilitating conditions for this injustice to occur.
That is why I support the statement from 11 May and believe it will help with the immigration crisis we face on our shores. The statement has introduced new permissions to stay where a person is granted on a protection route and made a pledge finally to define what “claim for humanitarian protection” means, so people who really need the help most know clearly who they are and their application can be completed swiftly, with the most minimal of delays. A clearer definition for the exceptional circumstances which warrant children coming to join refugee parents or relatives will also provide more transparency and clarity and make it easier for children to join loved ones sooner and more safely.
It also provides some different allowances for when a person comes to the UK via another safe country. I think this is fair enough. Maybe the noble Lord, Lord Dubs, stuttered, but he said that people come through another safe country, and then slightly retracted the comment. We must deter dangerous journeys and encourage asylum claims to be made in the first safe country. Differentiating between people who come here first and people who come via another safe country is important and fair.
I support all these measures and the Government’s other moves on immigration, such as amending criminal offences, with increased maximum penalties for people smugglers and boat skippers, and the ability to impose visa penalties where countries pose a risk to international peace and security, to name but a few. These will ensure that those most at risk and most vulnerable will be welcomed and protected while those who use current loopholes for their own criminal gains and risk other people’s lives in the process are stopped in their tracks. We should get on with this without delay.
Lord Paddick (LD)
My Lords, it has been an interesting and wide-ranging debate, bearing in mind the subject of the regret Motion, but we support the regret Motion in the name of the noble Lord, Lord Hylton, and we are very grateful to him for bringing these changes to the attention of the House.
The noble Lord, Lord Hylton, regrets the implementation of plans, set out in the Nationality and Borders Act 2022, to treat refugees differently depending on how they entered the United Kingdom. The issue is yet to be tested in the courts, as it inevitably will be. We maintained at the time, as the noble Lord, Lord Dubs, has said, that it was a breach of the UK’s international obligations under the UN refugee convention—a view supported by the UN High Commissioner for Refugees.
The noble Lord, Lord Lilley, has an interesting perspective on the backlogs in asylum applications. Some 10 or more years ago, we had double the number of asylum applications and a fraction of the backlog. We were deporting far more overstayers and illegal immigrants than we do now. All this points to a catastrophic failure by the Home Office—nothing more, nothing less.
As far as Ukraine is concerned, the Government have been very generous on the basis that they expect and hope that the vast majority of those people will return to Ukraine, once peace has hopefully been restored. It is a very different situation.
I agree with the noble Lord, Lord Lilley, that rather than taking back control of our borders, we have thrown them open. As the noble Baroness, Lady Falkner of Margravine, said, there is nothing now to stop people coming here with visa-free entry, which is not only still open to residents of all EU countries, but the Government have added 10 more countries to that list. These are people who can put their passports in the e-passport gates at the airport, disappear into the country and nobody knows who they are, where they have gone or whether they ever leave.
I am a little confused about the arguments on identity cards. The noble Lord, Lord Dubs, who apparently supports the idea, told us how difficult it is to open a bank account. Tell me about it—I have been trying to open a bank account for the last two weeks. I have shown my passport and I have gone to the bank; it wants to know where my income comes from—most of it is a Metropolitan Police pension. Yet, apparently, we need identity cards as well, to try and control things. I think things are difficult enough as it is.
But we digress, widely. The Minister may argue that our objections were debated during the primary legislation that these rule changes are based on, and the majority of this House rejected those arguments. The specifics—for example, that group 2 refugees will get permission to remain for only what I thought was 30 months but the noble Lord, Lord Hylton, thinks is shorter—were not on the face of the Bill, and this is the first time that Parliament has had the chance to debate the specifics in legislation.
We should not expect details of safe and legal routes to be included in the Immigration Rules, but when refugees are to be treated differently depending on whether they have arrived by a safe and legal route—that is, group 1 refugees—or otherwise as group 2 refugees, Parliament has the right to expect the Government to set out what safe and legal routes are available currently and those that are planned, including any limits on those numbers. Without knowing how many or what proportion of asylum seekers will fall into each group, how can Parliament make a judgment as to whether to agree these changes to the Immigration Rules?
As the noble Lord, Lord Hylton, said, group 2 refugees will be disqualified from family reunion, so we are going to have far more unaccompanied child refugees coming to this country who will not be able to be joined by their families.
This week, the BBC reported that 181 of these unaccompanied asylum-seeking children aged 18 or under have disappeared since they have come to this country. They are put into hotels with no supervision, and they disappear. How many more unaccompanied asylum-seeking children are going to be lost and potentially abused, whether through modern slavery or through child abuse, if they are not allowed to bring their families to join them and look after them? Why is there not a risk assessment around how many more unaccompanied child refugees are going to be placed at risk as a result of these changes?
There is no risk assessment on this at all, but there is precedent in the past for impact assessments to be published alongside changes to the Immigration Rules. In September 2020, the Government published an impact assessment for changes to the Immigration Rules for students. In November 2020, they published an impact assessment for changes to the Immigration Rules for skilled workers. The changes we are debating today are arguably the most fundamental changes to the Immigration Rules ever enacted—so where is the impact assessment?
Lord Horam (Con)
The noble Lord says that that is an effective deterrent, but, with respect, it would have to be tested in reality, just as the Government’s measures are being tested in reality—or not tested in reality yet.
Lord Paddick (LD)
Arguably, the Government’s policy is being tested in reality, because the threat hangs over everybody who crosses the channel that they could be sent to Rwanda—albeit that there is a stay on it because of the action before the courts—yet there are record numbers coming across the channel. So, I would argue that we need to try something else.
The whole disgraceful Rwanda policy is designed to avoid the UK making any decision about whether someone is a genuine refugee or not by simply removing them to Rwanda and letting the African nation decide. The change in the rules ensures asylum seekers who arrive in the UK, other than through what I would argue are practically non-existent “safe and legal” routes, will automatically be removed without any consideration of the merits of their claim for refugee status. Can the Minister explain, for an unaccompanied child refugee who claims asylum in the UK because they were in danger of persecution in both their country of origin and the country from which they travelled to the UK, do these changes mean that their persecution in the country from which they fled immediately before arriving in the UK will no longer be considered as grounds for eligibility for humanitarian protection because it was not their country of origin?
Has the Home Office thrown the baby out with the bath water through these changes? If, as the Minister claimed earlier today, the Home Office will consider the vulnerability of asylum seekers before sending them to Rwanda, why can it not consider at the same time whether the application for asylum has any merit, rather than refusing to even consider it and sending people to Rwanda?
We objected to almost every provision in the Nationality and Borders Act and it is therefore no surprise that we regret these Immigration Rules, which give effect to the primary legislation. In recent years, asylum seekers have amounted to only around six in every 100 immigrants to the UK. If anti-immigration advocates, such as the noble Lord, Lord Lilley, believe there is a problem that needs to be addressed, we on these Benches believe the focus should be on the 94% who are being given visas, not the most vulnerable desperately seeking sanctuary in the UK.
There appears to be a glimmer of light in the former Home Secretary’s resignation letter to the Prime Minister today in which she said that
“I have had serious concerns about this Government's commitment to honouring manifesto commitments, such as reducing overall migration numbers and stopping illegal migration, particularly the dangerous small boats crossings.”
The resigning Home Secretary says she has serious concerns about the Government’s commitment to stopping illegal immigration. Can the Minister enlighten us as to what she means?
Lord Coaker (Lab)
My Lords, this has certainly been a wide-ranging debate. I intend to concentrate on the regret Motion from the noble Lord, Lord Hylton, which we fully support. We welcome the Motion and the opportunity to discuss matters relating to asylum and immigration in general.
I say to the noble Lord, Lord Horam, that while I do not agree with some of his policy prescriptions, I totally agree with him—which is why I was nodding—on the complexity and sometimes impenetrable nature of trying to understand what is actually going on. That is really unhelpful to any of us debating these matters. We all have different perspectives on this, but all of us are seeking an immigration and asylum system that works and is fair. We will debate how that is achieved but, in order to achieve it, we certainly have to understand what is meant and, frankly, that is sometimes quite difficult. I very much agreed with the point the noble Lord made about that.
I say gently to the Minister that it is extremely unhelpful to the whole debate on asylum, immigration and refugees to have the chaos we have at present. The Home Secretary has just resigned. The noble Lord, Lord Paddick, just quoted her letter, which appears to suggest that although there was a security or national security breach—we are not sure yet—there was also a furious row in government about what was happening with respect to migration targets, visas, refugees, small boat crossings, et cetera.
Whatever our view, how on earth can we debate these matters without being certain what the Government themselves believe in? What is the Government’s policy? Are the new Immigration Rules, which we have debated and discussed and which my noble friend Lord Dubs referred to, government policy? Does the new Home Secretary agree with the Immigration Rules or will he disagree with the Prime Minister? We just do not know. I am not trying to make a political point. I am making the point that from the point of view of this it is extremely important that the Government sort out what they are saying: otherwise, who can have confidence around any of this?
Indeed, while we have been speaking, there have been rumours that the Chief Whip and Deputy Chief Whip have resigned—which are as yet unconfirmed. Here we are—the noble Lords, Lord Lilley, Lord Horam and Lord Paddick, the noble Baroness, Lady Falkner, the noble Earl, Lord Leicester, and my noble friend Lord Dubs—and that is going on all around us. Whatever our view, that just cannot go on.
These are real people, families, refugees and people in need. Even if we think this or that should happen, we cannot have a situation where the Government are falling out among themselves with all that going on. I will just say, because this is the opportunity to do it—I know the Minister will take this—that we simply have to know where we are in order to debate these things.
I found this an interesting debate, which showed the House of Lords at its best. Many of us were Members in the other place, and even where views and arguments clash, out of that comes better public policy, which is what we want.
I want to concentrate on the regret Motion in the name of the noble Lord, Lord Hylton. I will reiterate some other points that were made, because it is important for us to put these on the table and then ask some specific questions.
The Statement of Changes in Immigration Rules published in May reflects changes made by the Nationality and Borders Act 2022, as the noble Lord, Lord Paddick, said, as well as covering a number of other issues. The key change which the regret Motion quite rightly focuses on is to implement the provision in the Nationality and Borders Act to have two tiers of refugees, with the support a person is entitled to based on how they travelled to the UK rather than their actual need. As the noble Lord, Lord Paddick, outlined, can the Minister clarify what support is available to the different groups: the length of stay, the support that they will or will not get, the nature of any detention that they would face should they be put in group 1 rather than group 2, and so on? It is unclear to me, reading the Immigration Rules, what they mean with regard to all that, so we need some clarity. The statement makes some changes to definitions, including changes needed to allow for the effective operation of the migration and economic development partnership with Rwanda, and there is some clarification on the family reunion rules.
This Chamber and His Majesty’s Opposition and others raised detailed and sustained objections to the Nationality and Borders Act during its passage. The Act did nothing to address the backlog of asylum claims and in fact clearly risks making things worse. In our view, it did nothing to create genuine safe routes to prevent dangerous journeys. Instead, it put barriers in the way of refugees fleeing war, persecution and unimaginable situations, as well as victims, including children, who are trying to escape modern slavery.
In this House, multiple votes were won calling for proper planning of safe routes, preventing offshoring, calling for international co-operation—a point my noble friend Lord Dubs made with specific reference to the need to work with France—and ensuring safe family reunion routes for unaccompanied children in refugee camps. As the noble Lord, Lord Paddick, said, many children are going missing on arrival in this country; we do not know where they are, which is completely and utterly unacceptable. The House also called for protecting the rights of modern slavery victims, and addressed many other issues. Unfortunately, the elected House, as is its right, insisted on the Act remaining and rejected many of the changes that your Lordships put forward. The regret Motion that the noble Lord, Lord Hylton, has brought forward seeks for us to look again at some of these issues and to raise certain questions.
I point out to the Minister that whatever system you have, there has to be greater effectiveness of the bureaucracy. There is administrative chaos with much of this, and it simply has to be resolved. I will give the Minister some statistics, and perhaps he can say what is being done about it. The number of basic asylum decisions being taken each year by the Government has collapsed. Decisions have fallen from 28,000 to only 14,000 last year. What an earth is going on? It does not matter what system you have; if the number goes from 28,000 to 14,000, there is a real problem. That is fewer decisions than either Belgium or the Netherlands, let alone Germany or France.
According to the Red Cross in the submission it gave us for this debate, of the applications submitted in quarter 4 of 2021, only 7% received a decision within six months. The equivalent of that was 56% in 2018 and more than 80% in 2015. What on earth is going on? What on earth is happening? Irrespective of the system you have, if you get a collapse in the effectiveness of the administration, nothing will work. All you get is undermining of the system. That backlog costs the taxpayer huge sums of money and prevents the system operating effectively. Can the Minister confirm how long—that is, how many years—the average wait for a basic decision to be made on an asylum claim now is?
The creation of group 2 refugees, who will receive only temporary asylum leave, will require the system not only to make the initial decision but to retake that decision multiple times. What impact assessment have the Government done on that change—the noble Lord, Lord Paddick, made this point, I think—where multiple decisions must now be made? What are the Government doing to address their backlog and how will the system, which is already struggling, cope with the additional burden that this measure places on it?
The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)
My Lords, I thank noble Lords for all the contributions that have been made during this debate, which, as has been observed, was very wide-ranging. There are obviously significant differences of opinion on the subject, so whatever I say I will upset half your Lordships. I thank the noble Lord, Lord Coaker, for the spirit of his remarks; I completely understand where he is coming from, and they are noted.
I will start by talking through the changes to the Immigration Rules. I will try to deal with all the questions that have been asked of me but, in the time available, I suspect I will struggle. I expect a bout of letter-writing at the end, which I commit to do in full, having studied Hansard.
The changes to the Immigration Rules that have been the subject of this debate were made in line with the relevant provisions within the Nationality and Borders Act 2022, as has been observed, which came into force on 28 June. I remind noble Lords that we debated similar topics extensively throughout the passage of the Nationality and Borders Bill. The guidance was also published on 28 June, in line with the relevant provisions in the Act. I assure and remind the noble Lord, Lord Hylton, that our policies do not contravene our international obligations, a subject that I will come back to. Everything that we do complies with the refugee convention. I will try to deal with the more specific questions at the end.
Your Lordships will excuse me if I do not get into a philosophical discussion about ID cards. However, as an aside, I note that we all carry around a smartphone which probably has far more detail than any ID card ever would, so perhaps it is time to reopen that debate.
I take on board the very sensible comments of the noble Lord, Lord Dubs, about the Law Commission. This is a complex subject and we are extremely grateful to the Law Commission for its detailed and constructive work. We have already established a simplification of the rules review committee to look at the drafting and structure of the rules, as part of the multiyear programme of change which is being led by the Home Office. I hope to have some good news for the noble Lord in due course.
Pretty much everybody raised the subject of an impact assessment. In essence, the question is whether there will be an impact assessment for group 2 refugees and, if so, when will it be published. As with all our policy changes under the New Plan for Immigration, differentiation will be subject to ongoing monitoring and evaluation, with the operation of our policies being kept under close review. The Home Office routinely publishes migration statistics, which form the basis of our analysis. My predecessor committed to publishing this in due course, and I am also happy to undertake that, but I cannot go further than that at this precise moment.
If your Lordships will allow me, I will take this opportunity to explain the purpose and function of the Nationality and Borders Act. Its core objectives are to increase the fairness and efficacy of our asylum system, to deter illegal entry to the UK and to remove those with no right to be here more easily and quickly. Differentiation is designed to discourage individuals from embarking on unnecessarily dangerous journeys to the UK and to arrive by the various safe and legal routes that are available. I will come back to “safe and legal”. It is self-evident that those in need of protection should claim in the first safe country that they reach; that is the fastest route to safety. It is not right that the control of national borders should be suspended to allow people who have already reached safety in countries with fully functioning asylum systems to travel further to another country as a matter of preference. This undermines the broader immigration system and, as has been noted across the House, encourages people to fund criminal gangs and risk their lives trying to get into the UK in unseaworthy vessels or packed dangerously into cars or lorries. We have all seen the tragic results and there are some very uncomfortable statistics about how that sometimes ends.
I will briefly touch on the subject raised by the noble Baroness, Lady Falkner. We will come back to golden visas on another Bill so, if she does not mind, I will pass on that for the moment.
As I have said, people are losing their lives by making extremely dangerous crossings over the channel. As a responsible Government, we have to do everything in our power to stop these criminal smugglers. I think that is a general point of agreement.
I will briefly clarify how differentiation functions. Section 12 of the Nationality and Borders Act introduced two groups of refugees. Individuals who came directly to the UK, claimed asylum without delay and, where appropriate, can show good cause for any illegal entry or presence will be recognised as group 1 refugees. If an individual does not meet all these requirements, they will be deemed a group 2 refugee. Both groups will have full access to the labour market and healthcare. The Act means that we may differentiate between refugees based on their group in a number of ways, including the length of permission to stay granted, the route to settlement, recourse to public funds and family reunion rights. That probably does not go into enough detail for the noble Lord, Lord Coaker, and his more detailed question about that subject so, if he will permit me, I will write rather than waste all the time of the speech.
This is what the policy and legislative changes established, with the intention to influence the decision-making of migrants, stopping them turning to criminal smugglers and thus undercutting that business model.
The noble Lord, Lord Dubs, asked about the United Nations High Commissioner for Refugees. There is no specific provision within the refugee convention that defines a certain term or sets out a specific procedure. Where there is no supranational body akin to the European Court of Human Rights, for example, it is open to states to interpret the terms of the refugee convention. Limit is placed on that autonomy to interpret by way of the principles of treaty interpretation in the Vienna Convention on the Law of Treaties. The general rule of interpretation in Article 31(1) of that convention requires a treaty to
“be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.”
On that basis, we have considered relevant factors, such as the law in other jurisdictions, case law and the words of academics. We believe that all provisions reflect a good-faith, compatible interpretation of the refugee convention. I appreciate that opinions on that may differ, but the purpose is to discourage asylum seekers from travelling to the UK other than via safe and legal routes. It aims to encourage individuals to seek asylum in the first safe country they reach after fleeing persecution, avoiding dangerous journeys across Europe. The policy is compliant with our international obligations under the refugee convention and the European Convention on Human Rights.
The noble Lord, Lord Dubs, asked me about returns to various countries. On a case-by-case basis, we have returned asylum seekers to Denmark, Ireland, Italy, Slovenia, Spain and Sweden. I do not believe there are overarching agreements, but it does happen on a case-by-case basis.
Lord Coaker (Lab)
That is exactly the point. I do not know whether that means that somebody coming from Iran would be eligible. That is the point the noble Lord, Lord Horam, made, which I was agreeing with. So it is either yes or no, and I just do not know from that answer.
Lord Sharpe of Epsom (Con)
My reading of it is that it does, but I accept that my reading may not be entirely accurate. I will also say that, obviously, women in Iran should seek safety in the nearest available safe place, and that is the point of what we are talking about to a large extent.
All this is to underline that we remain committed to helping the world’s most vulnerable and oppressed people. This country has a long-standing tradition of extending the hand of friendship to those fleeing conflict, tyranny and persecution, and that record will continue.
The noble Lord, Lord Hylton, asked me a number of very specific questions which I will do my very best to answer in full. He talked about legal aid for refugee family reunion and whether that may or may not be available under the exceptional case funding scheme. It is where failure to provide legal aid would mean there is a breach, or a risk of a breach, of the individual’s human rights and it is subject to means and merits tests. In 2019, we amended the scope of legal aid so that separated migrant children are able to receive civil legal aid for applications by their family members and extended family members. This includes entry clearance and leave to enter or leave to remain in the UK made under the Immigration Rules or outside the rules on the basis of exceptional circumstances or compassionate and compelling circumstances.
The noble Lord, Lord Hylton, asked why the safe route for people from El Salvador has closed. Since 11 May 2022, Salvadorean nationals have been required to obtain a visa prior to entering the UK as a visitor. The decision to impose a visa regime was taken solely for migration and border security reasons. Over the preceding five years there had been a sustained and significant increase in the number of UK asylum applications from Salvadorean nationals at the UK border: up 1,750% since 2017. While this change requires Salvadorean nationals to obtain a visa entry clearance in advance of travel, it does not close the safe and legal routes available to Salvadorean nationals to enter the UK.
The noble Lord also asked whether, under the two existing Ukraine schemes, there is any progress in getting professional and technical qualifications recognised in the country. The Department for Levelling Up, Housing and Communities is working with the Department for Business, Energy and Industrial Strategy, other government departments and the UK Centre for Professional Qualifications to clarify and promote the process for converting professional qualifications into comparable UK equivalents. That will help Ukrainians to keep up employment in their chosen professions or industries and make the most of their opportunities to use their skills and knowledge while they are living in the UK.
The noble Lord, Lord Coaker, asked about asylum wait times. As he noted, the asylum system has been under mounting pressure for several years. Increased and sustained intake, and a growing number of people awaiting a decision, have led to significant delays. We are currently concentrating on deciding older claims, high-harm cases, those with extreme vulnerability and those of children. I am afraid I am unable to offer specific timescales at this time, but I commit to notifying the noble Lord as and when I can. I will pursue that particular statistic.
Before I finish, I will talk about the practicalities and practice. They were noted by a number of people, including the noble Lords, Lord Hylton and Lord Horam. To some extent this informs the debate about Iran. Who are we talking about, coming across in small boats? That is essentially the nub of this. In 2022, 87.7% have been male. Between 2019 and 2021, 89.7% were male—it is pretty consistent. The top five countries of origin for small boat arrivals this year, bearing in mind that most of the migrants are men, are Albania, Afghanistan—where there is a safe and legal route—Iran, Iraq and Syria. I am not diminishing those people’s reasons for wanting to be in this country, but I question whether Albania is really the right source for asylum claims. It has been noted that some of them have chosen not to seek asylum, with the deterrent effect of the policy around Rwanda. I also point out that of those men—I did the numbers this morning—approximately three-quarters are between the ages of 18 and 39.
A couple of noble Lords, including the noble Lord, Lord Dubs, pointed out that there has been persistent criticism of France. I am not here to do that. I am here to commend France, because since July 2020 we have made more than 500 arrests, dismantled 21 organised crime groups and prevented more than 23,000 crossings. So I thank our French friends for their efforts in that regard. I hope they continue and perhaps improve. Who knows? There may be room for improvement.
The noble Lord, Lord Coaker, asked me a bit about Rwanda in relation to women from Iran. With the exception of unaccompanied children, any individual who has arrived in the UK through dangerous, illegal and unnecessary methods since 1 January 2022 may be considered for relocation to Rwanda. But decisions will be taken on a case-by-case basis and nobody will be reallocated if it is unsafe or inappropriate. Everyone considered will be screened and have access to legal advice. I cannot be more unequivocal than that, but I take the noble Lord’s point and will certainly raise it in discussions. I hope that satisfies him.
This is a very complex subject. It is a global phenomenon, influenced by multiple and complex factors. I am sure noble Lords are aware of the horrifying statistics of displaced persons around the world. I think this country is trying to do its bit but, obviously, we cannot take all of them. That is just not possible, as my noble friend Lord Lilley noted.
I close my remarks by again thanking noble Lords for their contributions throughout this debate. I understand this remains an emotive issue, obviously. The Government are committed to upholding our domestic and international obligations through safe and legal routes while also securing our borders, upholding our immigration laws and preventing unnecessary and dangerous journeys to the UK. We do not concede that the legislative changes and policy intentions behind differentiation are insufficient or problematic, as proclaimed in the regret Motion. We therefore cannot agree with the stated position of the regret Motion advanced by the noble Lord, Lord Hylton.
Lord Hylton (CB)
My Lords, I had slightly expected that this might have been a rather dry-as-dust debate on the precise terms of the regulation. To my delight, it has branched out and blossomed. Many very important issues were raised, so I am doubly grateful to all those who have taken part in it. I note that they have come from all sides of the House. I join in the congratulations made earlier today to the Minister on his new role, and thank him in particular for his precise answers to the several questions that I raised with him in preparation for this debate.
The debate has touched on Rwanda, so maybe I could briefly say why sending people there would be a very bad idea. It is a country with a high poverty level and very poor human rights record. For example, refugees who have protested have been fired on and a number killed. There are strong allegations that refugees who have left Uganda to go to other countries have been murdered by Rwandan agents. I note that Israel had an agreement with Rwanda but has had to abandon it. I very much hope that Denmark will not follow this dangerous and unreliable course, and that development aid will not be used as a bribe to persuade the Rwandans to take external people.
That is all I need to say on that. Having done so, and having thanked those who need to be thanked, I beg leave to withdraw my Motion.