House of Commons

Monday 9th January 2023 Commons Chamber

Monday 9 January 2023

The House met at half-past Two o’clock

Prayers

Monday 9th January 2023 Commons Chamber

[Mr Speaker in the Chair]

Business Before Questions

New Writ

Ordered,

That Mr Speaker do issue his Warrant to the Clerk of the Crown to make out a New Writ for the electing of a Member to serve in this present Parliament for the County constituency of West Lancashire in the room of Rosemary Elizabeth Cooper, who since her election for the said County constituency has been appointed to the Office of Steward and Bailiff of His Majesty’s Three Chiltern Hundreds of Stoke, Desborough and Burnham in the County of Buckingham.—(Sir Alan Campbell.)

Oral Answers to Questions

Monday 9th January 2023 Commons Chamber

The Secretary of State was asked—

[Priti Patel (Witham) (Con)]

1. What steps he is taking to help communities protect themselves from potentially unsuitable development proposals.

[The Minister of State, Department for Levelling Up, Housing and Communities (Lucy Frazer)]

Mr Speaker, I would like to start by apologising on behalf of my right hon. Friend the Secretary of State for his absence from the Chamber. As I believe you and the hon. Member for Wigan (Lisa Nandy) are aware, he has a family reason that means he is unable to be here today.

The Government are taking action to protect communities from inappropriate development through measures in the Levelling-up and Regeneration Bill and through our proposals for updating the national policy planning framework, which we launched for consultation at the end of last year. Those proposals include giving increased weight to plans in decision making, removing the requirement to demonstrate a five-year housing land supply where a plan is up to date and strengthening the protections from speculative development for areas that have a neighbourhood plan that meets its housing requirement.

[Priti Patel]

The Minister is well aware that communities across the Witham constituency, including many villages such as Hatfield Peverel, Tollesbury, Tiptree and Black Notley, have been subject to speculative developments, some of which have gone through on appeals from builders in particular or have been approved by councils concerned about their five-year land supply. What assurances can she and the Government give my constituents, who are fighting against many speculative developers and developments, that the Government’s planning policies are on the side of those communities?

[Lucy Frazer]

I am very aware of the issues my right hon. Friend raises, because we discussed them at length as the Bill was going through the House. I am grateful for her contributions, which have strengthened the Bill. I know that communities, including in her constituency, invest considerable time and effort in preparing neighbourhood plans, and I understand their frustrations when decisions go against their wishes. The current NPPF already provides important additional protection from speculative development for areas with a neighbourhood plan, but we want to go even further. We have just published proposals to increase protections for areas, including those with neighbourhood plans. Those proposals are now out for consultation and I know the Secretary of State will consider all views carefully before making a final decision.

[Mr Speaker]

I call the Chair of the Select Committee.

[Mr Clive Betts (Sheffield South East) (Lab)]

Happy new year to you, Mr Speaker, and to everyone else.

The consultation on the NPPF before Christmas included quite a lot of flexibilities and potential for changes on the standard methodology that would be the basis for calculating the housing needs assessment, but the one area where there did not seem to be much flexibility was the urban uplift. Can the Minister justify the 35% uplift and set out how it has been calculated for each of the urban areas? Secondly, in cases such as that of Sheffield, where the urban uplift will force development on to greenfield sites and the green belt, will there be flexibility so that the extra amount from the urban uplift does not have to be applied where it can do real damage to local communities?

[Lucy Frazer]

I am sure other hon. Members have questions for me and other Ministers about the importance of infrastructure where we have development. Developments in urban areas have the benefit of that infrastructure, and it is important to build houses where there is infrastructure, so that uplift remains. However, the hon. Gentleman mentioned the green belt, and we are very conscious of the impact of building on green belt. There will be strengthened protections around that in the NPPF.

[Boris Johnson (Uxbridge and South Ruislip) (Con)]

Does my right hon. and learned Friend agree that the best way to stop building housing in unsuitable areas is to build more on brownfield sites across the country? Is it not therefore all the more tragic that under the current Labour Mayor of London, house building has gone off a cliff because he remains obsessed with unrealistic targets for social housing in every development, stopping good projects from going ahead and depriving the people of this city and this country of houses for sale and for market rent, and of social housing as well?

[Lucy Frazer]

My right hon. Friend makes an excellent point, as always. We do agree that it is important that we build first on brownfield land. That is why we have a brownfield-first policy that we are absolutely committed to, and a brownfield fund to encourage investment in those areas. It is, of course, important that we have social housing, affordable housing and homes that first-time buyers can buy. But it is important that we have mixed developments, and that those houses are in the right places and in the right quantities.

[Rachael Maskell (York Central) (Lab/Co-op)]

Happy new year, Mr Speaker.

York is becoming unrecognisable as developers are building not only luxury student accommodation but luxury apartments across our city when we desperately need social and affordable homes. That is leading to the highest price rises in housing across the country—a staggering 23.1% last year—pricing out my constituents. How will the Minister ensure that local authorities just build housing according to need rather than the want of developers?

[Lucy Frazer]

We do ensure that. We are committed to ensuring that we have in our new infrastructure the same amount of affordable housing that we have at the moment. As I am sure the hon. Member is aware, we have a fund of £11.5 billion going into affordable housing so that developers can create the houses that people not only want but need.

[Bill Esterson (Sefton Central) (Lab)]

2. What assessment he has made of the potential impact of changes in the level of (a) interest rates and (b) inflation on regional inequality.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

11. What recent assessment he has made of the impact of increases in inflation on the adequacy of levelling-up funding.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

I wish you a very happy new year, Mr Speaker.

The recent autumn statement protected the most vulnerable by uprating benefits and pensions with inflation, strengthening the energy price guarantee, and providing cost of living payments for those who are most in need. My Department is continuing to analyse and respond to the challenges that inflation presents to the delivery of our levelling-up programmes and the levelling-up agenda, working closely with the places affected. We are continuing to explore what other support can be offered to mitigate against those inflationary pressures.

[Bill Esterson]

Happy new year, Mr Speaker.

According to the Department, construction of major projects has stalled because industry prices are well above the headline rates of inflation. As the Minister knows, UK inflation is projected to be the highest in the G7 this year, as it was last year. In the north-west, the Government have cut £206 million from the much-needed shared prosperity fund, so will the Minister confirm that her Department will make up the shortfall in the funds to help the construction industry play its part in rebuilding the economy and communities across the country?

[Dehenna Davison]

I am grateful to the hon. Gentleman for bringing attention to the shared prosperity fund, which is just one of the many measures that this Government have put in place to help to promote investment in local areas right across the country. One point that I draw his attention to is that, in recognising the challenging landscape that we face at the moment, our Department is making an additional £65 million of funding available to successful applicants to ensure that they can take on board consultants, train up extra staff and increase their capacity so that they are responding to the challenges that they face.

[Gavin Newlands]

Happy new year, Mr Speaker. It is great to see the former Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), take a break from his career break to come and join us today—he is very welcome.

The UK is already the second most unequal G7 country, with inflation higher in poorer regions—including many parts of the west of Scotland—than in London and the south-east of England. That is set to become even worse as a consequence of the Tory cost of living crisis. Local initiatives such as the Clyde green freeport are designed to boost economic prospects in the west of Scotland, but inequality is still a major impediment to economic growth. How can the Tories fix that inequality when they largely caused it in the first place and have spent the last decade making it worse?

[Dehenna Davison]

I am grateful to the hon. Gentleman for again drawing attention to the green freeports programme, which will provide brilliant opportunities for residents in Scotland; we hope to make an announcement on that incredibly soon. I draw his attention to the incredible UK Government funds going into Scotland: the UK shared prosperity fund, the levelling-up fund and the community ownership fund—all things that Scottish people can access thanks to the UK Government improving opportunities for Scottish people.

[Sara Britcliffe (Hyndburn) (Con)]

Happy new year, Mr Speaker.

In Hyndburn and Haslingden, we welcome the shared prosperity funding we have received, which will support places such as Haslingden market. But after significant stakeholder engagement, we now eagerly await the outcome of our levelling-up fund bid. Can the Minister confirm that the results will be known before the end of the month?

[Dehenna Davison]

I am grateful to my hon. Friend, who is an excellent champion for her community—this is not the first time she has bent my ear on the levelling-up fund, and I am sure it will not be the last. I can confirm that we will announce the full outcome of the levelling-up fund by the end of January.

[Sir Jake Berry (Rossendale and Darwen) (Con)]

In Darwen, our town deal is absolutely crucial as part of our levelling-up plan. However, because of inflation, not only is time a wasting asset, but so is the value of that deal. Will the Minister meet me and representatives of Blackburn with Darwen Borough Council to discuss how we can speed up the release of the Darwen town deal funds?

[Dehenna Davison]

Yes, I absolutely will.

[Mr Speaker]

I call the shadow Minister.

[Sarah Owen (Luton North) (Lab)]

Thank you, Mr Speaker, and happy new year.

Conservative failure to tackle regional inequality is just one in a long list of let-downs. Thirteen years of Tory rule, and parts of the UK have plunged further and further into poverty. Local authorities spent over £27 million applying for levelling-up bids, only for many to lose out—places such as Barnsley and Knowsley, which have been denied multiple bids with little transparency, leaving many colleagues in the dark and resorting to questioning Ministers about local bids, with no answers at all. Will the Minister please clarify the lack of transparency and the financial costs of these bids to cash-strapped councils, particularly during the cost of living crisis?

[Dehenna Davison]

I thank the shadow Minister for her question. We are keen to get the levelling-up funding announced by the end of the month, with additional funding to what we were originally forecast to put out. We had £1.7 billion in the pot; we are now going to be divvying out £2.1 billion to local areas that really need it. It is the Conservative Government who deliver for the people across this country.

[David Linden (Glasgow East) (SNP)]

3. What assessment he has made of the strength of the Union.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

5. What assessment he has made of the strength of the Union.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Felicity Buchan)]

When we work together as one United Kingdom, we are safer, stronger and more prosperous. We are better able to tackle the big problems—from supporting families with the cost of living, to leading the international response to Russia’s war in Ukraine and to being a world leader in offering the vaccine to all our citizens. We are taking specific action in Scotland, Wales and Northern Ireland, including putting local voices at the heart of decision making.

[David Linden]

Oh—is it still Monday? Six of the last seven polls in Scotland have shown majority support for Scottish independence. What does the Minister think is driving up that support? Is it the ignoring of the majority of pro-independence MSPs? Is it the assault on workers through the anti-trade union legislation coming forward? Or it just 12 long, brutal years of Tory rule, for which Scotland has not voted since the 1950s?

[Felicity Buchan]

We respect the priorities of the Scottish people, who are focused on improving the NHS, on education, on tackling inflation and on getting a ferry that actually works and takes them to the islands. We will work in co-operation with the Scottish Government. We respect devolution and we want to work with them to implement the people’s priorities.

[Alan Brown]

If the Government and the Minister, as a proud Scot, respect the wishes of Scottish voters, surely they will respect the votes in the last Scottish parliamentary election, which elected a pro-independence majority in Parliament. Also, an opinion poll last year showed that 72% of Scots want to remain in the EU—what has happened to respecting that wish? If this is a voluntary Union, what is the mechanism for the people of Scotland to demonstrate their consent or otherwise to staying in it?

[Felicity Buchan]

I am very proud to be a Scots person. The hon. Gentleman mentioned the 2021 Holyrood elections: less than one third of the Scottish electorate voted for the SNP in that election.

[Mr Speaker]

I call the SNP spokesperson.

[Chris Stephens (Glasgow South West) (SNP)]

A guid new year tae yin and a’, and monie may ye see.

The Minister talks about Administrations working together, so how is it working together when the Government propose unpopular and extreme legislation, such as the proposed anti-strike legislation that they have trailed in the media, which no devolved Administration support and which has not been consulted on? How is that strengthening the Union?

[Felicity Buchan]

This Government work tirelessly with the devolved Administrations. I have been in post for only a few months, and I have had two conversations specifically on Homes for Ukraine with the Scottish and Welsh Administrations. In the first three quarters of last year, there were more than 200 departmental meetings. The Prime Minister, within three weeks of taking office, met the First Ministers in Blackpool. That is the commitment of this Government.

[Chris Stephens]

If the devolved Administrations say no to the proposed anti-strike legislation, the Government will accept that then, will they not?

[Felicity Buchan]

We have established procedures in place. We are there to discuss.

[Mark Menzies (Fylde) (Con)]

4. Whether his Department is taking steps to reform the leasehold system.

[Richard Fuller (North East Bedfordshire) (Con)]

6. If he will bring forward legislative proposals to give freeholders rights to directly challenge management and service charges equivalent to those of leaseholders.

[The Minister of State, Department for Levelling Up, Housing and Communities (Lucy Frazer)]

The Government are committed to building on the Leasehold Reform (Ground Rent) Act 2022 and delivering the second phase of our major two-part leasehold reform programme within this Parliament. This will make it easier for leaseholders to purchase their freeholds and will establish greater fairness between those parties.

[Mark Menzies]

I welcome the steps taken by my right hon. and learned Friend and look forward to seeing them progress into law. Nationally, much of the focus has been on high-rise flats, but in Fylde there are many new housing developments completed in recent years with leasehold issues of their own. In light of that, what action is she taking to ensure that these reforms include those living on recently completed housing developments?

[Lucy Frazer]

I can give my hon. Friend assurance that the many measures we will bring in will affect not only new purchasers but existing leaseholders. We will be bringing forward legislation later in this Parliament.

[Richard Fuller]

In my constituency, Councillor Weir of Great Denham, Councillor Gallagher of Shortstown and Councillor Dixon of Stotfold are leading efforts on behalf of local residents who own a freehold property to challenge excessive fees, lack of transparency and poor service by estate management companies. Will the Minister review the terms of reference of the property ombudsman to make it easier for homeowners—freeholders—to challenge these unfair practices?

[Lucy Frazer]

My hon. Friend is right to highlight unfairness in relation to freeholders. Estate management companies must be more accountable to homeowners on how money is spent to maintain privately managed estates. We will be giving freehold owners on these estates new rights to challenge costs and appoint a manager, as well as requiring private estate management companies to join a redress scheme.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The Minister will know that in some parts of the country, residents are impacted by chief rents. The Rentcharges Act 1977 extinguishes all chief rents in 2037, but many of the property companies that hold the chief rents are now using sharp practices and scams to con their residents out of extra money by sending questionnaires to residents about home improvements they have had. What is she doing to tighten up on these scams and sharp practices?

[Lucy Frazer]

The hon. Member makes an important point, and I know that freeholders are paying charges for maintaining communal areas, known colloquially as “fleecehold”. It is something we are looking at, and I am happy to update him on that.

[Hilary Benn (Leeds Central) (Lab)]

Just before Christmas, a constituent of mine received a service charge bill in respect of her leasehold flat for fire-stopping works. Leaseholders rightly believe they should not have to pay to fix fire safety defects, and they think the Building Safety Act 2022 protects them from having to do so. Can the Minister therefore set out for the House in what circumstances it is still lawful for the owner of a building to charge leaseholders to fix fire safety defects?

[Lucy Frazer]

As the right hon. Gentleman will know, we are taking a number of steps in the Building Safety Act 2022 to strengthen protections for the residents living in these buildings. The Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for North East Derbyshire (Lee Rowley), or I will write to the right hon. Gentleman on his specific question.

[Sir Peter Bottomley (Worthing West) (Con)]

I welcome what the Minister has said about bringing forward legislation, which this House needs to pass as soon as possible, to protect leaseholders in ways put forward by the Law Commission, with proposals commissioned by the Government. Will she also consider how to make leaseholders parties to the building insurance for which they pay the premiums? For some reason, they are not thought to have an interest in it, but they should. That needs to change.

[Lucy Frazer]

I have had a number of conversations with my hon. Friend; I know he is very committed to this area. He will know that we are bringing in legislation in due course that will make it much easier for leaseholders to enfranchise their leases. I am already looking at the particular area that he mentions.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Last month marked five years since a previous Secretary of State, the right hon. Member for Bromsgrove (Sajid Javid), promised to liberate leaseholders from “feudal practices”. We have obviously had some progress in terms of new builds, but existing leaseholders are still facing the same problems. I recognise the warm words from the Minister, but can she confirm that we will see legislation coming forward this year to deal with all the existing problems that leaseholders face?

[Lucy Frazer]

What I can confirm is that we will be bringing forward legislation in this Parliament to make valuations easier for those extending their leases, to make the lease extension experience easier and cheaper, to make it quicker for freeholders to take control of the management of their buildings with a right to manage and a number of other measures.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

7. What steps his Department is taking to support the building of high-quality homes.

[The Minister of State, Department for Levelling Up, Housing and Communities (Lucy Frazer)]

The design of our homes matters. That is why we have already taken steps to embed design quality in the planning system through changes to national planning policy and guidance. Furthermore, the Levelling-up and Regeneration Bill requires areas to adopt local design codes, setting clear rules for development.

[Andrew Jones]

I thank the Minister for that answer. Councils can only require developers to build homes with energy measures that are in line with national guidelines. What work is being done to update these frameworks so that developers can be mandated to install measures such as solar panels or ground-source heat pumps and thereby reduce carbon emissions and, crucially, cut domestic energy bills?

[Lucy Frazer]

My hon. Friend is absolutely right to highlight the importance of ensuring that our homes use green energy. In 2021, the Government introduced an uplift in the energy efficiency standards that means that new homes are now expected to produce 30% less carbon dioxide than the current standards. Furthermore, that is just a stepping stone to the 2025 future homes standard. Although we do not mandate specific technologies to enable innovation and tailoring to individual sites, we expect that most developers will use solar panels or heat pumps to meet those new standards.

[Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)]

It has been six months since Birmingham City Council applied for round 2 of the levelling-up fund. Sadly, Ministers overlooked our bid in round 1, but that was two Governments ago. I am grateful to the Minister for Levelling Up for confirming that the results of the second round will be announced by the end of this month. If our bid is successful, the funding will totally transform Erdington High Street—

[Mr Speaker]

Order. Unfortunately this is not a levelling-up question.

[Mrs Hamilton]

Have I missed it?

[Mr Speaker]

Do not worry. I will see whether we can pick you up later.

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

The Welsh Labour Government have applied schedule 3 to the Flood and Water Management Act 2010, which provides minimum standards for sustainable urban drainage systems on new housing developments. New properties in England lack those same statutory flood protections. The Government launched a review last year, so when will its results be concluded and when will schedule 3 be applied here so that homes in England can have the same standard of flood protection as those built in Wales?

[Lucy Frazer]

The Government have taken a number of actions on flood and waste water management, which we have increased through the Levelling-up and Regeneration Bill. We will respond in due course to the consultation that the hon. Lady talked about.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Happy new year, Mr Speaker.

Reference to high quality housing is often a shorthand for reference to expensive housing, yet in my community nearly 6,000 people are on the council house waiting list, so we desperately need affordable homes that are of high quality. Will the Minister agree to change planning law so that councils such as mine in Cumbria and in our national parks have the power to enforce 100% affordability, so that we build to meet need not just demand?

[Lucy Frazer]

I have had a number of conversations with the hon. Gentleman, and he knows that we are taking steps to help improve and build homes in his area. Not only do we have the £11.5 billion fund, but we have taken steps on the issue of second homes that he and other hon. Members on both sides of the House have raised with me, so that we ensure that people who live in particular areas continue to live there and use their services.

[Mr Richard Bacon (South Norfolk) (Con)]

Does the Minister agree that the best way to build high quality homes is to give the greatest choice to the people who live in them as to what is built? Can she think of any ways in which we might encourage that?

[Lucy Frazer]

I wonder whether my hon. Friend is talking about self and custom-build, about which I have had many conversations with him. He knows that we are strengthening the ability in the Bill to build such homes.

[Mr Speaker]

I call the shadow Minister.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

Happy new year, Mr Speaker.

The Government’s decision to signal the end of enforceable local house building targets has already resulted in a number of local authorities pausing work on their local plans. I have a simple question for the Minister: has her Department carried out any analysis or assessment of the impact on overall housing supply of the changes to national planning policy outlined in the national planning policy framework consultation that is now under way?

[Lucy Frazer]

The simple fact is that under the present system, too few local authorities have local plans, because people do not want development in their area. Through the Bill, we are seeking to ensure that communities have a say on their local plans so that those plans are passed within the 30-month time limit that we have set out in the Bill.

[Wendy Chamberlain (North East Fife) (LD)]

8. What assessment he has made of the potential impact of his Department’s levelling-up agenda on the cost of living for people in rural areas.

[Helen Morgan (North Shropshire) (LD)]

22. What assessment he has made of the potential impact of his Department’s levelling-up agenda on the cost of living for people in rural areas.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

Levelling up is all about improving opportunities and living standards in all parts of the country, but we know that some cost pressures, including transport and energy, can be even greater in rural areas than in urban areas. That is why, in this year’s provisional local government finance settlement, we have proposed maintaining the £85-million rural services delivery grant. As we are concerned about the impact of the cost of living, the recent autumn statement also protected the most vulnerable by uprating benefits and pensions with inflation, strengthening the energy price guarantee, and providing cost of living payments to those most in need.

[Wendy Chamberlain (North East Fife) (LD)]

Happy new year, Mr Speaker.

Levelling-up funding will not help the systemic issues behind the cost of living crisis, but one of the challenges in rural communities is that the infrastructure is often not in place, so I am concerned about the Government’s delay in announcing the successful bids for levelling-up funding, particularly for the projects and communities that would benefit in North East Fife. I am also concerned that the Government are not pushing back the deadline on capital expenditure beyond 31 March 2025, because capital expenditure is difficult to deliver. Will they consider extending that deadline?

[Dehenna Davison]

I am grateful to the hon. Lady for her pertinent question. That is precisely why we are putting in place additional funding to help to support local areas to build up their local capacity and improve their ability to deliver those projects on time. Ultimately, all our constituents want to see spades in the ground and projects completed as soon as possible.

[Helen Morgan]

Happy new year, Mr Speaker.

As the Minister just said, it is well documented that the cost of living crisis is affecting rural parts of Britain to a much greater extent because of the higher costs of petrol, food, transport and housing, and the lower average wages. I am seeing a growing number of emails from increasingly desperate constituents, including one who contacted me this week to say that she was wearing coats and hats in her house, despite having worked all her life. Her email concluded:

“I wish I was dead, I’m so depressed”.

Will the Minister acknowledge the extent of the problem affecting rural parts of Britain and work with her colleagues across Government to address the factors that are making the cost of living crisis much worse for people in rural Britain?

[Dehenna Davison]

Again, I am grateful to the hon. Lady for raising the case of her constituent. Sadly, I think all of us have seen examples like this, but it is particularly acute in rural communities. I represent a rural constituency so I have seen similar cases. A lot of work is going on right across Government to try to mitigate cost of living pressures, including cost of living payments and additional help with energy bills, but I am certainly willing to work with anyone across the House who can help us in that mission.

[Caroline Nokes (Romsey and Southampton North) (Con)]

In many rural areas there is no mains drainage, and the cost of sewage disposal is adding to the rising cost of living. One housing association in Romsey and Southampton North is levying charges to homeowners of £300 per month, meaning that their sewage disposal charges are higher than their energy bills. Will my hon. Friend agree to meet me so that she can hear more about the specifics of that case and understand if there is anything the Government can do to help?

[Dehenna Davison]

I am grateful to my right hon. Friend for raising this, and I will of course meet her to learn more and see what more we in Government can do to help support her constituents.

[Dr Neil Hudson (Penrith and The Border) (Con)]

Levelling up must cover all parts of our country—north, south, east and west—including rural areas. With that in mind, does my hon. Friend agree that a great way for the Government to show their support for rural areas would be to back the Inspiring Eden Enterprise Hub bid, which would really be a shot in the arm for the people of Penrith, Eden and rural Cumbria?

[Dehenna Davison]

My hon. Friend, my constituency neighbour, is an excellent champion for Penrith and The Border, and I certainly see the excellent work he does. I am certainly happy to meet him to discuss this further.

[Miriam Cates (Penistone and Stocksbridge) (Con)]

9. What steps his Department is taking to empower local communities.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

The Government are of course committed to seeing more empowered and accountable local leadership, and we believe that devolution is the key to ensuring that that happens. Alongside the existing nine devolution deals already in place, last year the Government announced deals with six new areas, which will provide them with over £4 billion to help drive growth and innovation, and to help them respond to the challenges and needs in their areas.

[Miriam Cates]

The town deal initiative has been very successful in empowering communities by enabling local people to decide for themselves how regeneration money will be spent. We are delighted in Stocksbridge to have had final sign-off on our town deal, which is £24 million of Government investment that is going to transform our high street, improve transport and enable people of all ages to flourish in our town. Does my hon. Friend agree with me that the towns fund initiative should be a blueprint for future levelling-up projects, and will she honour Stocksbridge—I believe it is not very far at all from where she grew up—with a visit to see this community power in action?

[Dehenna Davison]

Well, I cannot possibly say no now, as a proud south Yorkshire lass, can I? My hon. Friend is a fantastic champion for Stocksbridge, and I congratulate her and the Stocksbridge board on securing £24.1 million to respond directly to the needs of the town. The town deal model is indeed a strong one, and I can assure her that responding to the views of local communities and stakeholders, including the local MP, will continue to be at the core of our approach to levelling up.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her answer. What assessment has the hon. Lady made of the implications for her policies of the UK100 “Local Net Zero Delivery Progress Report” on local powers, which are critical for that very progress to actually happen?

[Dehenna Davison]

I thank the hon. Member for his question. Our net zero strategy sets out our commitments to enable local areas to deliver net zero and recognises that local authorities can and do play an essential role in delivering on our climate action. The UK100 “Local Net Zero Delivery Progress Report” forms part of a growing body of evidence that reviews what is going on with net zero.

[Tom Hunt (Ipswich) (Con)]

10. What recent steps his Department has taken to help protect people from unsafe cladding.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

The Government are providing a significant amount of taxpayer subsidy to remediate cladding on high-rise residential buildings, 95% of buildings with unsafe ACM cladding have work under way or complete, and over £1.6 billion has been allocated from the fund alongside a wider set of interventions to speed up resolution for those leaseholders who are impacted.

[Tom Hunt]

It is quite clear to me that freeholders and managing agents have a duty of care towards residents, whether they be leaseholders or tenants. In Ipswich, we have two quite dramatic examples of where these freeholders and agents are dramatically failing the residents. We have Cardinal Lofts, which the Minister is aware of, but we also have St Francis Tower, where we have had residents for over a year living in darkness with no natural light because of the shrink wrap. Will the Minister confirm whether there are any plans for a new regulatory framework to make sure that these cowboy companies such as Block Management, which has refused to respond to my emails about block management, are held to account, and also to ensure that there are clear standards when it comes to remediation works?

[Lee Rowley]

My hon. Friend is an absolute champion for the issues that his constituents have highlighted to him, and I had the privilege of accompanying him on a visit to one of those particular buildings—Cardinal Lofts—a few weeks ago. Building owners have a responsibility to remediate the buildings that they own, and they have access to funds with which they are able to do that. They should be ensuring that developers and other interested parties are followed up accordingly to make sure that the ultimate aim, which is to ensure that leaseholders are not impacted, is resolved as quickly as it can be.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

The Minister understands what a terrible problem this unsafe cladding is. A development in my constituency, Dalston Square, has unsafe cladding and the builders, Barratt, have accepted responsibility and put up scaffolding to deal with it. That scaffolding has been up for two years and nothing has happened because of a dispute between the builders and the contractors. Is there no way in which the Government can ensure that unsafe cladding is dealt with promptly so that tenants or residents do not suffer from the problems they encounter in having scaffolding up for two years?

[Lee Rowley]

The right hon. Lady raises an important point. We need to get these properties resolved, mitigated and improved and that needs to be done in a way that works, as much as it can, for leaseholders, who should not be impacted by this in the first place. I will be happy to receive any information on the building she mentioned; I visited a flat in Manchester just a few weeks ago which had a similar issue and I will be happy to talk to her about this specific issue in more detail.

[Richard Burgon (Leeds East) (Lab)]

12. What assessment he has made of the feasibility of bringing in voter ID for local elections in May 2023.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

The Government continue to work actively to ensure that voter ID is delivered in time for the 2023 elections, and we will continue to work with the Electoral Commission and all other parties, including local authorities, to ensure that that occurs.

[Richard Burgon]

I thank the Minister for his answer, but the Government’s imposition of voter ID, despite there being hardly any instances of voter fraud, is a crass attempt at vote rigging, and now the Electoral Commission and the Local Government Association are warning it will not even be possible to have everything ready by this May’s local elections. So will the Minister do the right thing for our democracy and pause the roll-out, or will the Minister ignore the experts and plough on, knowing full well that ploughing on and ignoring the experts will disenfranchise so many people across our country?

[Lee Rowley]

Just as when we discussed this in the statutory instrument debate, the hon. Gentleman has deployed some pretty outrageous rhetoric on an important issue. The issue is important for the integrity of the ballot box going forward, and we will continue to work with all parties. I will be speaking with the Electoral Commission shortly, which just today has begun its process of outlining this to people through its communications campaign, and we will ensure that in May 2023, when people go to the ballot box, they are able to cast their vote, and that people have an absolute commitment from this Government that votes are cast by people who are who they say they are.

[Michael Fabricant (Lichfield) (Con)]

But does not the Minister agree that the reason why Opposition Members say that there is no voter fraud is that they do not know, and only when we have voter ID will we be able to be sure there will be no voter fraud?

[Lee Rowley]

My hon. Friend makes an important point and the basic principle is that we want to ensure that the ballot box is sacrosanct and that the process has integrity, so when people go to vote, it works.

[Alex Norris (Nottingham North) (Lab/Co-op)]

Happy new year, Mr Speaker, to you and to all of our colleagues.

[Michael Fabricant]

To you too, and thank you.

[Alex Norris]

You are very welcome.

Those who set the standards for our elections, the Electoral Commission, thinks that May is too soon for voter ID reforms, and those who have to implement them, our electoral administrators, say the same. There are just 115 days until the local elections and the Minister seems to put a lot of stock in a campaign that is only starting today. The Minister did not address in his answer to my hon. Friend the Member for Leeds East (Richard Burgon) nor in the statutory instrument debate what it is in his judgment that he believes supersedes the views of those who actually have to make this happen.

[Lee Rowley]

We will continue to work with everybody in order to deliver this, because the Government have been absolutely clear for a number of years that it is important that the ballot box has integrity. We are bringing forward voter identification to ensure that that happens, and we will continue to work with all organisations to make sure it is successful in the 115 days to which the hon. Gentleman refers.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

13. What recent assessment he has made of the impact of his Department’s policies on regional inequality.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

In this challenging economic context, levelling up to tackle regional inequality is more important than ever. While this requires a whole-Government effort, my Department continues to push ahead through investment in local places, for example through the UK shared prosperity fund, from which I understand the Glasgow city region has been allocated more than £73 million for interventions that will build pride in place and improve life chances for people living in the region.

[Margaret Ferrier]

Happy new year, Mr Speaker. As successful bids for the levelling-up fund are finalised—I hope to see Shawfield in my constituency receive some money—how does the Minister expect this round of funding to support wage growth across the UK in the light of the cost of living crisis?

[Dehenna Davison]

I appreciated the hon. Member’s pitch, which I am sure we will take on board alongside those made by colleagues across the House. The levelling-up fund is there to support local capital projects, of which there is such a wide range. Many of those will help improve wage growth, improve life chances and improve the skills of young people so that they can get on in life, because that is what the Conservative Government are all about.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

With £56 million from the levelling-up fund, a £17.6 million Kidsgrove town deal, masses of funding from the shared prosperity fund and, of course, a Conservative-led council building 1,000 homes a year, on average, and reopening things such as Tunstall town hall, which Labour left shut for 30 years, does the Minister agree that those who want to see regional inequality broken should vote Conservative in May’s local elections?

[Dehenna Davison]

I could not have said it better myself.

[Mark Pawsey (Rugby) (Con)]

14. What steps his Department is taking to encourage the early provision of infrastructure for residential developments.

[The Minister of State, Department for Levelling Up, Housing and Communities (Lucy Frazer)]

Providing the right infrastructure at the right time is really important to communities. That is why, in the Levelling-up and Regeneration Bill, we are introducing a new infrastructure levy that will more effectively deliver infrastructure such as schools, GP surgeries and roads. It will also give the ability to a local authority to collect that money earlier. We will be publishing a consultation on the new levy shortly.

[Mark Pawsey]

There is no better example of providing infrastructure early than Houlton in my Rugby constituency, where 6,000 new homes are being provided. The Minister will be able to see that on her forthcoming visit. The access road went in after just 272 homes. On education, the primary school went in after 79 homes, and the secondary school after just 776. With 1,000 new homes already on the site, the facility that is missing is primary healthcare, and discussions with the local NHS are moving far too slowly. What steps can she take to ensure that vital third item of infrastructure is provided as soon as possible?

[Lucy Frazer]

I am pleased to hear about this successful development and look forward to seeing it. Due to the quasi-judicial role of Ministers in the planning system, I cannot comment on specific planning applications. However, as part of the new infrastructure levy, we are very committed to ensuring that the infrastructure delivery strategies, which councils will have to put together, will make it clearer to communities what will be provided. That should include things such as GP surgeries, which should have the integrated care board’s support.

[Mark Fletcher (Bolsover) (Con)]

17. What steps his Department is taking to help first-time buyers.

[The Minister of State, Department for Levelling Up, Housing and Communities (Lucy Frazer)]

There are currently no plans to further extend or replace Help to Buy, but all options to increase home ownership are kept under review. Our other schemes, including shared ownership, the mortgage guarantee scheme and First Homes, which have been trialled in my hon. Friend’s constituency, continue to support first-time buyers.

[Mark Fletcher]

The Help to Buy scheme has been an invaluable way of getting on the housing ladder for so many people. I was recently visited by a constituent—a young nurse—who was desperate to use the scheme but worried that it runs out in March. Will the Minister give us an update? Will we be able to keep this invaluable scheme?

[Lucy Frazer]

We do not currently have plans to do so, but we will keep that under review. Since 2010, more than 819,000 households have been helped to purchase a home through Government-backed schemes. That includes how we cut stamp duty land tax, and extended the mortgage guarantee for a further year to maintain the availability of mortgages to buyers with only a 5% deposit.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

First-time home ownership is a pipe dream for most people in my constituency, where more people rent privately than own their homes and more people rent social housing than those combined, with more than 13,000 people on a pruned-back social housing waiting list. What will the Minister and her Department do to help councils build the right housing—affordable housing—in boroughs such as Hackney so that people can get their foot into any secure housing, whether rented or owned?

[Lucy Frazer]

The hon. Member raises a very important point about how we help people to buy homes and get on the housing ladder. We have an £11.5 billion fund to help build affordable homes. She also mentions social housing. Since 1980, through the right to buy scheme, 2 million social housing tenants now own their own home, and we continue to develop schemes to secure people’s home ownership.

[Caroline Ansell (Eastbourne) (Con)]

18. What steps he is taking to encourage developers to redevelop empty buildings in town centres.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

Regenerating our town centres is essential to the Government’s commitment to level up the country. The Levelling-up and Regeneration Bill includes measures to tackle vacant properties, such as high street rental auctions, and it clarifies compulsory purchase powers. We have also revised the business development and use class rules so that commercial buildings can change easily between uses. Through the town deals programme and future high streets fund, the Government are also investing £3.6 billion to regenerate town centres, which of course includes projects to redevelop empty shops.

[Caroline Ansell]

With zero VAT on new build, demolition and greenfield development would seem to be the smart choice for developers, while empty buildings such as the former Debenhams in Eastbourne town centre, which would carry 20% VAT for renovation, are overlooked and year on year move towards dilapidation. Has any assessment been made of the number of new homes that could be delivered should different VAT regimes be levelled up? And, as there has been a great deal of negative campaigning—[Interruption.] I will come to that point next time.

[Mr Speaker]

One question.

[Dehenna Davison]

I thank my hon. Friend for her question; she is a fantastic champion for levelling up in her community. Questions on VAT would be a matter for His Majesty’s Treasury, but we are of course committed to reviewing incentives around brownfield development and will announce further details on the scope of that review in due course.

[Andrew Selous (South West Bedfordshire) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Minister of State, Department for Levelling Up, Housing and Communities (Lucy Frazer)]

On 28 December, we announced an historic devolution deal between the Government and the local authorities of Northumberland, Newcastle, North Tyneside, Gateshead, South Tyneside, Sunderland and County Durham. A new Mayor for the north-east will ensure that local priorities are at the heart of decision making and will provide £1.4 billion to level up the area over the next 30 years. We have now struck deals with eight of the 11 areas identified for devolution in the levelling up White Paper, putting more power in the hands of local leaders representing over 7 million people in England.

[Andrew Selous]

Will the Government remedy the completely unacceptable situation whereby thousands of homes are built in areas such as mine—and in Rugby and elsewhere—without adequate general practice capacity? What will the Government do to put that right in areas where that has happened?

[Lucy Frazer]

My hon. Friend has a great deal of experience on this issue in his area, as well as having raised it nationally. I was very pleased to discuss it with him and the relevant Minister in the Department of Health and Social Care today. It is important that all the necessary infrastructure for a housing development is built, whether in relation to education or GP surgeries. The infrastructure levy will facilitate that even further—[Interruption.]—but it is important that we work together.

[Mr Speaker]

I call the shadow Secretary of State.

[Lisa Nandy (Wigan) (Lab)]

Thank you, Mr Speaker. I wish the Secretary of State well and thank him for advance notice of his unavoidable absence today.

What do the Government have to say to the 1.4 million households who woke up this morning to find that they are facing eye-watering hikes in their mortgage interest payments this year?

[Lucy Frazer]

The hon. Member will know that the Government are already taking steps to help people with the cost of living. We have already taken steps to help people with their energy bills. I know that she will know, because she is a shadow Minister on top of her game, that the Chancellor met banks at the end of last year and put in place a package of measures to ensure that bankers are helping people with their mortgages, whether through flexibility or further switching.

[Lisa Nandy]

I think “Sorry” would have been a good start. But seriously, it is chaos, isn’t it? Rents are rising at their fastest rate for seven years and mortgage payments are going through the roof since the Government crashed the economy. Leaseholder reforms have stalled and half a million people are still stuck in unsafe homes with unsafe cladding five years after Grenfell. Where is the mortgage emergency plan? Where is the end to no-fault evictions? Where is the affordable housing we were promised? What are the Government actually doing all day?

[Lucy Frazer]

From 1980, this Government have delivered 2 million social homes. This Government have a proven track record: the period since 2020-21 has seen the third highest annual rate of additional homes built in the last 30 years. This Government have provided people with £37 billion-worth of support. This Government are on people’s side, helping them through this difficult time as well as when times are good.

[Peter Aldous (Waveney) (Con)]

T6.   The all-party parliamentary group for the east of England has carried out a review of levelling up in the region. It has found that although a good start has been made, there are five of the White Paper missions in whose delivery there is low confidence, four in which there is medium confidence and only three in which confidence is high. I would be most grateful if the Minister provided a full written response to the report, but in the first instance will she seek to make Lowestoft’s enterprise zone an investment zone? That would underpin and support levelling up.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)]

Pitch for Lowestoft heard loud and clear! The Chancellor announced at the time of the autumn statement that the existing investment zones programme would be refocused to

“catalyse a limited number of the highest potential knowledge-intensive growth clusters”.

Our Department will work closely with key partners on how best to identify and support those clusters. My officials have read the APPG’s report; we will respond in full in due course.

[Mr Speaker]

I call the shadow Minister.

[Paula Barker (Liverpool, Wavertree) (Lab)]

A very happy new year, Mr Speaker. In September, amid the political chaos, the then Minister, the hon. Member for Walsall North (Eddie Hughes), published the Government’s rough sleeping strategy. Despite all the good intentions, the problem is evidently getting worse, not better. Data from CHAIN, the Combined Homelessness and Information Network—the most up-to-date rough sleeping snapshot for London—has confirmed that between July and September 2022, numbers were up 24% on the previous year. Figures published earlier in 2022 show that rough sleeping rose by 89% in the west midlands, 68% in Yorkshire and the Humber and 65% in the north-west—a shameful indictment of this Government’s record. Can the Minister rise—

[Mr Speaker]

Order.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Felicity Buchan)]

This Government have made an unprecedented commitment on rough sleeping and homelessness. We are investing £2 billion over three years. We do see seasonal fluctuations, but the rough sleeping numbers are at under 3,000 at the moment. Every single person sleeping rough is one too many, but we are very much on top of this.

[Marco Longhi (Dudley North) (Con)]

T7.   If we can spend huge sums of money housing people who come to this country illegally, as was attempted in a hotel in my constituency, how can it be remotely acceptable that we have a single rough sleeper on the streets of our country?

[Felicity Buchan]

We are absolutely committed to ending rough sleeping. In September we came out with a strategy to end rough sleeping by the end of this Parliament. As I say, one person sleeping rough is one too many.

[Wera Hobhouse (Bath) (LD)]

T2. I am pleased that the Government have committed to banning no-fault evictions, but the law on illegal eviction must be reformed at the same time to stop frustrated landlords taking unjustified action against their tenants. The current law on illegal eviction is very difficult to understand and is rarely enforced. Can the Minister confirm whether the Government intend to reform the law on illegal eviction alongside banning no-fault evictions? If not, will she meet me to discuss the matter?

[Felicity Buchan]

We have committed to taking a renters reform Bill through this Parliament. I am very happy to meet the hon. Member to discuss her particular issue.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T10.   Will the Minister update the House on his discussions with developers about replacing unsafe cladding? What process is in place to resolve disagreements between residents and developers when a dispute arises about the level of remediation needed, as has happened at Morello Quarter in Basildon?

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

My right hon. Friend the Secretary of State is working to bring forward the developer contract; it has been discussed and debated for several months and we hope to have progress on it shortly. We are very clear that building owners ultimately have the responsibility to remediate these properties and make sure that leaseholders can continue to live their lives as they should be able to.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

T3. Last month, Barclays announced that it was replacing its Ellesmere Port branch. We are losing shops in the town centre weekly. We have put in a levelling-up bid that we hope will address the issues, but every previous application has been rejected, so we are not hopeful of success this time around. What is the Government’s plan B for areas whose levelling-up bids are not successful?

[Dehenna Davison]

We keep that under constant review. We are looking at the provision of further funds, but also at simplifying funding through schemes such as the UK shared prosperity fund, to empower local areas to make decisions on what is best for them.

[Robert Courts (Witney) (Con)]

Vital infrastructure for new homes includes upgrades to the sewerage networks that are needed to service them. Bringing schedule 3 to the Flood and Water Management Act 2010 into effect would remove the automatic right to connect, which would mean extra money to upgrade those systems. The Government are reviewing it, but are they going to do it?

[Lucy Frazer]

As my hon. Friend has said, the Government are reviewing it.

[Joanna Cherry (Edinburgh South West) (SNP)]

T4.   Building cost inflation is having an adverse effect on the proposed refurbishment of Edinburgh’s historic King’s Theatre, and a levelling-up application has been made to try to cover the shortfall in its fundraising. Will the Minister meet me so that I can brief her on this problem and tell her all about the fantastic project, which has been specially designed to benefit the whole community in Edinburgh?

[Dehenna Davison]

Another pitch heard loud and clear! I should be delighted to meet the hon. and learned Lady.

[Shaun Bailey (West Bromwich West) (Con)]

My life peaked last month when I finally got to cut the ribbon on the Poundland in Owen Street, Tipton, which was opening after years of negotiation. A high streets strategy will be an important part of our levelling-up agenda. Will my hon. Friend meet me to discuss how we can make the most of the true beating heart of the Black Country, including the high streets in Tipton and Wednesbury?

[Dehenna Davison]

My hon. Friend has been a fantastic champion for his constituency. I congratulate him on his ribbon cutting, which I am sure was a moment of real joy. I should be delighted to meet him to discuss how best we can move forward with our high streets strategy.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

T5. What recent discussions has the Department had with the Scottish Government about the gap in funding for remediating unsafe cladding, following the Building Safety Act 2022?

[Lee Rowley]

As the hon. Lady knows, this is a devolved issue. I shall be happy to talk to the Scottish Government if it is appropriate for me to do so, but I know that they, along with the UK Government, are absolutely committed to resolving the situation at the earliest possible opportunity.

[Simon Jupp (East Devon) (Con)]

The Dinan Way extension in Exmouth and the Cullompton relief road are two major projects that are needed to cut congestion and improve air quality locally. My hon. Friend knows that I have made the case for those bids previously, but may I make one final plea now?

[Dehenna Davison]

My hon. Friend is another fantastic champion, not just for his constituency but for the whole of the south-west. We will announce the outcome of the bids in due course, but his question has been heard loud and clear.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

T8.   Answers to parliamentary questions have revealed that the Government’s spending guidelines relating to local authority delivery of the holiday activities and food programme have seen, in just one year, more than £37 million wasted on the likes of publicity and marketing, as opposed to being spent on food for hungry children. Why is that?

[Lee Rowley]

As the hon. Lady knows, local authorities need to make a set of decisions whenever any money, such as grants, is made available. If she wants to provide any further information, the Department will be happy to respond to her.

[Siobhan Baillie (Stroud) (Con)]

Stroud’s levelling-up bid works with the private, public and charity sectors, which means that if we are successful, we can deliver jobs and meaningful change very quickly. However, in the light of the delayed announcement, will the Minister clarify whether we need to submit updated information, and will she meet me to discuss the matter?

[Dehenna Davison]

My hon. Friend is yet another fantastic champion for her constituents. No further information is needed at this stage, but I should be happy to meet her to discuss the issue that she has raised.

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

T9. First we saw footage of the Prime Minister admitting to activists that he had diverted money away from urban Labour-voting areas. Then we saw the ex-Culture Secretary, the right hon. Member for Mid Bedfordshire (Ms Dorries), saying that the decision to defund the English National Opera was “politically motivated” and a “stunt”. To avoid accusations that levelling up is based merely on Tory targets and is anti-London, can the Minister tell us which funding formulas were changed, with what justification, and on whose authority?

[Dehenna Davison]

A great deal of transparent information is available on gov.uk, which I should be happy to send to the hon. Lady.

[Nick Fletcher (Don Valley) (Con)]

Devolution has been a resounding success in places such as Teesside and the west midlands, but in Labour-controlled South Yorkshire it has been an absolute disaster. Will the Minister meet me, and my South Yorkshire colleagues, to see what we can do to turn its fortunes around?

[Dehenna Davison]

We believe that local empowerment is the right way forward, but it takes the right local leadership. I shall, of course, be happy to meet my hon. Friend and his South Yorkshire colleagues to see how we can improve things for the great people of South Yorkshire.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

Hard-pressed tenants in my constituency have been contacting me, worried about losing their homes and about unaffordable bills and rent. Well over three years after the Government promised to end no-fault evictions, when will they finally stop dithering and bring in the renters reform Bill?

[Felicity Buchan]

The Government are giving unprecedented support to help with the cost of living. We have been very clear that we will bring in the renters reform Bill in this Parliament, as soon as parliamentary time allows.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

I believe a mistake was made when the levelling-up parks fund was announced, because Stoke-on-Trent did not get any money. When will the Minister correct that, so that I can put pump tracks in Middleport and at the old BMX track in Norton and Ball Green?

[Dehenna Davison]

That is another fantastic pitch from my hon. Friend the Member for Stoke-on-Trent North, Talke and Kidsgrove—I am not sure I have got all the titles in there. I would be happy to meet him to discuss it further.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

Last month, 51,000 people came to the end of their placement under the Homes for Ukraine scheme, leaving them desperately needing somewhere to live. However, with the private rented sector unaffordable and council waiting lists already overwhelmed, families are having to choose between returning to a war zone and being homeless. What will the Government do about it?

[Felicity Buchan]

We are delighted to have welcomed more than 150,000 Ukrainians into this country. We thank all the sponsors. On homelessness, 1,720 homelessness duties were owed to households who arrived under the Homes for Ukraine scheme. That is a small fraction.

[Mr Speaker]

Let’s get the questions in, please.

[Sammy Wilson (East Antrim) (DUP)]

An essential ingredient to levelling up is the ability to trade within a country to get the best prices and products. In Northern Ireland, that cannot happen because of the imposition of EU law, which has obstructed trade between Northern Ireland and Great Britain. Will the Minister accept that only by removing the Northern Ireland protocol and abiding by the terms of the Northern Ireland Protocol Bill can this iniquity be removed?

[Lucy Frazer]

The right hon. Member will know that the Government have brought forward legislation on the Northern Ireland protocol, recognising that it is not working at the moment.

[Mr Speaker]

I call Sir Christopher Bryant.

[Sir Chris Bryant (Rhondda) (Lab)]

The reason the British countryside looks different when driving down the motorway is that the Labour Government in 1945 banned out-of-town advertising hoardings. Why have the Government allowed them to start appearing on every single motorway in the land? When will they get rid of these horrible excrescences?

[Lucy Frazer]

That is a very interesting point. I am sure a Minister will take that up and consider it with the hon. Member.

[Mike Amesbury (Weaver Vale) (Lab)]

Cheshire West and Chester Council and I have put in an excellent bid in round 2 of the levelling-up fund for the corridor at Winnington bridge. On what day in January can we expect a positive outcome?

[Dehenna Davison]

I cannot promise a positive outcome at this stage. All bids are under consideration, but there will be an outcome before the end of the month.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

Over a million households and growing have real housing needs. According to the Institute for Fiscal Studies, the Minister’s Department has seen the largest proportional reduction across Government in post-2025 spending plans. What steps are the Government taking to ensure that there is adequate funding for social housing?

[Lucy Frazer]

The Government have an £11.5-billion fund to ensure that we have affordable housing.

Channel 4

Monday 9th January 2023 Commons Chamber

15:38

[Lucy Powell (Manchester Central) (Lab/Co-op)]

(Urgent Question): To ask the Secretary of State for Digital, Culture, Media and Sport if she will make a statement on the future of Channel 4.

[The Secretary of State for Digital, Culture, Media and Sport (Michelle Donelan)]

Happy new year, Mr Speaker.

Channel 4 is a great British success story. It was set up by Margaret Thatcher and it has done exactly what she wanted it to do: positively disrupting British broadcasting and driving an expansion in the UK’s independent production sector, which is now surging at £3 billion. However, in the last decade, the media landscape has been transformed by technology and the entry of new, rapidly growing streaming platforms. Channel 4, along with all public sector broadcasters, faces unprecedented competition for viewers in terms of both programming and talent.

Channel 4 is uniquely constrained in its ability to respond to those challenges. There are limits on the broadcaster’s ability to raise capital and make its own content. Under current legislation, Channel 4 operates as a publisher-broadcaster, meaning that all its shows are commissioned or acquired from third parties, such as independent producers or other broadcasters, who typically retain the rights relating to those programmes.

The challenges faced by Channel 4 are very real. That is why the previous Administration decided to proceed with the sale in order to free the broadcaster from the constraints that were holding it back under public ownership. Over the last few months, I have carried out my own examination of the business case for the sale of Channel 4. I have listened to stakeholders and taken a close look at the broadcaster’s long-term sustainability and the wider economic outlook, and I have decided that pursuing a sale is not the best option to ease the challenges facing Channel 4. However, doing nothing also carries a risk. Change is necessary if we want to ensure that the corporation can continue to grow, compete and keep supporting our thriving creative industries. Anyone who says otherwise is burying their head in the sand.

After discussions with Channel 4, I am therefore announcing an ambitious package of interventions to boost the broadcaster’s sustainability. Under this agreement, Channel 4 will continue to play its own part in supporting the UK’s creative economy, doubling both the number of jobs outside London and its annual investment in the 4Skills training programme for young people. Meanwhile, we will introduce a statutory duty on Channel 4 to consider its sustainability as part of its decision making. We are working with Channel 4 to agree updated governance structures to support that long-term sustainability.

We will provide Channel 4 with new commercial flexibilities, including by looking to relax the publisher-broadcaster restriction to enable it to make some of its own content. In doing so, we will work closely with the independent production sector to consider what steps are necessary to ensure that Channel 4 continues to drive investment in indies, particularly the newest, smallest and most innovative producers. That includes increasing the level of Channel 4’s independent production quota, which is currently set at 25% of programmes, and potentially introducing specific protections for smaller independent producers. Any changes will be introduced gradually and following consultation with the sector. Finally, we will make it easier and simpler for Channel 4 to draw down on its private £75 million credit facility.

Alongside the changes to Channel 4, the media Bill will introduce a wide range of measures to modernise decades-old broadcasting regulations, including prominence reforms. Further details will be announced in due course.

[Lucy Powell]

First, I want to congratulate the Secretary of State on her happy news and to thank you, Mr Speaker, for granting this urgent question. It is extraordinary that this matter of huge interest to Members across the House was leaked to the media during the recess with no attempt to make an oral statement. Of course I welcome this decision, having campaigned against this terrible Tory plan since it was announced. The Secretary of State has at least reached the conclusion that was staring her in the face: that the plans for the sell-off were bad for Britain, bad for our creative industries and bad for British broadcasters and advertisers. The plans would have likely seen this treasured institution, which has been responsible for some of Britain’s best-loved films and exports, sold to a US media giant.

What a total waste of time and money this has been. At least £2 million has been spent, and there has been a huge opportunity cost not just for Channel 4, but across the creative industries, with the plans sucking the life out of all the important work that Ministers should have been getting on with. MPs on both sides of the House knew that the privatisation of Channel 4 was an act of cultural vandalism from a Government who simply did not like its news coverage. Can the Secretary of State give us her estimate of how much pursuing this flawed policy has cost the taxpayer, Channel 4 and our public sector broadcasters in lost opportunity?

This is the second time in six years that the Government have proposed this privatisation. What guarantees can the Secretary of State give that privatisation is off the agenda for good? How is she going to ensure future financial sustainability without damaging our vibrant independent sector? Prominence reform is key to that, so when will she bring forward the long overdue media Bill? Does she agree that these plans have been a massive distraction and have already led to British broadcasters losing out to the global streaming giants?

Finally, is it not the truth that after 13 years, this tired Government have run out of road and run out of ideas? They have no plan for growth to support our world-renowned creative economy; just infighting, time-wasting and petty vendettas.

[Michelle Donelan]

As the hon. Lady will know, we have outlined, including in today’s written ministerial statement, an ambitious plan to secure and safeguard the sustainability of Channel 4 so that it can thrive and survive. It is completely wrong to suggest that we are not doing anything, or that the money we have invested in looking at this proposal has been wasted.

In fact, as I have already stated, Channel 4 has now committed to doubling its investment in skills across the country to £10 million. This is a new package, and the money we have invested in considering Channel 4’s sustainability is very clear and on the public record. It is important that we now work together to secure the future of Channel 4 and of our independent sector. As I outlined in my opening remarks, we will particularly safeguard small, innovative independents.

[Mr Speaker]

I call the Father of the House.

[Sir Peter Bottomley (Worthing West) (Con)]

I follow the hon. Member for Manchester Central (Lucy Powell) in saying that, over the last 13 years, Channel 4 has done better than ever before. If we want to congratulate Channel 4, we should also congratulate the Government on making that possible by not disturbing its arrangements.

The Secretary of State is right to examine the proposals put forward a year or so ago. I would not have frozen the BBC licence fee, I would not have proposed the privatisation of Channel 4 and I would not have put pressure on Arts Council England to strangle the English National Opera, but there is more to be done to put them on the right path.

Alex Mahon, the chief executive of Channel 4, spoke for me when she talked about Channel 4’s innovativeness in reaching audiences that others do not serve so well, and I think the publisher-producer split is worth preserving. I hope Channel 4 will not be forced to make too many programmes in-house, as it is vital that we keep the independent producers going. I hope we are back here in 10 years’ time with no more proposals to change the ownership of Channel 4, which is a good public broadcaster that successfully operates commercially.

[Michelle Donelan]

I absolutely agree with my hon. Friend that it is essential Channel 4 remains an incubator of the independent sector, which is why one measure we will be taking forward is increasing, from 25%, the proportion of content it has to take from the independent sector. Let us not forget that the package of measures announced today is about giving Channel 4 the tools to be viable in the long term. Of course, it is up to Channel 4 what it does with those tools. Nobody is forcing it to do anything.

[Mr Speaker]

I call the SNP spokesperson.

[John Nicolson (Ochil and South Perthshire) (SNP)]

Happy new year, Mr Speaker.

I congratulate the Secretary of State, but I heard her refer to a previous Administration. There is no new Administration, just the same old Tory Administration. This is the second time I have sat on these Benches to listen to a Conservative Secretary of State reverse their predecessor’s damaging proposal to privatise Channel 4.

Channel 4 is a flourishing, much-loved public institution that is making record profits and offers fearless journalism. The Secretary of State says her decision is based on evidence, which is a good call, but evidence, rather than any personal agenda, should surely have been the guiding principle from the get-go. For those who are not aware, Channel 4 receives no public funds. Can I try again: how much public money went into this Government’s aborted attempt at privatisation?

[Michelle Donelan]

We have already put that amount on the public record. As the hon. Member for Manchester Central (Lucy Powell) said, the amount is just shy of £2 million, but that also covers the general sustainability work that led to the package we announced today.

[Damian Green (Ashford) (Con)]

It is clearly new year, new politics when the Opposition secure an urgent question to praise a Minister because the Government have got a policy right, and I echo their congratulations. My right hon. Friend the Secretary of State has got this absolutely right, but can she assure me that the independent sector, which has been a huge economic and cultural success since it was created in the 1980s, will be not only protected but enhanced by the measures announced today?

[Michelle Donelan]

I can absolutely guarantee my right hon. Friend that it will be. We will be working extremely closely with the independent sector throughout this period and consulting it to make sure we get this right, not just for Channel 4, but for our thriving independent sector.

[Kevin Brennan (Cardiff West) (Lab)]

The problem with TV repeats is that we all know what the ending is going to be in advance, and we have seen this movie before. However, I am interested in what the Secretary of State has to say about the media Bill. She said she had an announcement to make today, but she did not make a statement to the House. When are we going to see that Bill? When are we going to see the measures that are vital to the future of our public service broadcasters in this digital age and that will ensure their sustainability and prominence?

[Michelle Donelan]

I share the hon. Gentleman’s commitment to the media Bill, and we will be bringing it forward shortly. I cannot stipulate the exact timeframe here today, but I can reassure the House that this Government are absolutely committed to that Bill and to its important aspects, including prominence, for not just Channel 4, but all our public sector broadcasters.

[Simon Jupp (East Devon) (Con)]

Channel 4 is a great British success story, with creative hubs across the country, including in the south-west, creating jobs and improving our economy. Will my right hon. Friend confirm that this move will safeguard the future of our world-leading independent production sector and help Channel 4 remain sustainable?

[Michelle Donelan]

I assure my hon. Friend that this move certainly will make sure that Channel 4 has the tools—a range of tools—to be sustainable in a changing media landscape, where we know that the pressure is on things such as linear advertising, and to help it to continue to be an incubator for the independent production sector, which is home to many jobs in a number of our constituencies.

[Julie Elliott (Sunderland Central) (Lab)]

After the enormous waste of public money that this political exercise has been, I am very relieved that the Secretary of State has come to this decision. One thing Channel 4 has said is that it wants to thrive in the digital era. What steps is she taking to ensure that the outcome of the Government’s consultation on digital rights for listed sporting events is implemented as quickly as possible?

[Michelle Donelan]

We will be updating the House on that matter shortly.

[Karen Bradley (Staffordshire Moorlands) (Con)]

Happy new year to you, Mr Speaker. I thank my right hon. Friend for her answer today and for the sensible decision she has taken on Channel 4, which is exactly the right thing to do. Will she expand on how small, creative, independent production companies in north Staffordshire, and those wanting to become such companies, can benefit from this announcement?

[Michelle Donelan]

We will be working hand in glove with the independent sector to ensure that we put in place specific safeguards, especially for the most innovative, small and new independent sector producers. We will give an update shortly on that, but we are listening to them at all stages.

[Valerie Vaz (Walsall South) (Lab)]

Happy new year, Mr Speaker. May I ask the Secretary of State: why did right hon. and hon. Members only hear about this U-turn on “Channel 4 News” and why has she not put the package before the House?

[Michelle Donelan]

We are laying a written ministerial statement today.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

Happy new year to you, Mr Speaker. I warmly welcome what my right hon. Friend has said. Is not the key point that Channel 4 operates in a distinctive niche in the broadcasting landscape, and everything we do should be designed to enhance that, not erode it? Is it not the case that what she has described today has the best chance of enhancing it, whereas privatisation would erode it?

[Michelle Donelan]

I came to the same conclusion as my predecessor that the long-term sustainability of Channel 4 was questionable. That is why we put in place a package, which is different from that of my predecessor but has the same goal in mind of ensuring that Channel 4 can survive, thrive and flourish in the future.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Happy new year to you, Mr Speaker, and to everybody else. Who can forget the reading of the poem “Stop all the clocks” in “Four Weddings and a Funeral”, one of Channel 4’s greatest triumphs? The point I wish to make is that that film featured Scotland in it and “Derry Girls” features Northern Ireland in it. As a Unionist, I believe that the British Isles is like a diamond: each facet is important. Channel 4 contributes massively to that, so may I ask the Secretary of State what special efforts will be made with the production companies in the provinces—the parts of the United Kingdom other than England?

[Michelle Donelan]

We are working with the independent production sector across the UK, because it is vital that we protect job creation in all corners of our United Kingdom. I agree with the hon. Gentleman that this is not just an England-specific issue.

[Dame Caroline Dinenage (Gosport) (Con)]

Happy new year, Mr Speaker.

I warmly welcome the Secretary of State’s words. The creative industries are simply our global superpower, and it is right that Channel 4 has the flexibility to be able to move with the times, respond to the changing media landscape and take advantage of commercial opportunities. Part of this is about nurturing the skilled workforce of the future so that they can respond to the needs of our creative industries. What kind of flexibility and focus will there be for Channel 4 to have the ability to do that?

[Michelle Donelan]

As part of this package, Channel 4 has agreed to double its investment in skills for young people around the UK—from £5 million to £10 million—which will be important for the entire creative sector.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Happy new year to you, Mr Speaker, and to everyone working in the creative industries, especially those in Yorkshire and the north of England.

I do not want to be mealy-mouthed about this, because I am delighted with the Government’s change of course, but is the Secretary of State aware of the favour that she has done us? The campaign to save Channel 4 has been amazing in bringing together all the people in the creative industries in Yorkshire and the north, giving them a sense of purpose that will not go away. We are a vital part of the creative economy, and we will go from strength to strength in the future.

[Michelle Donelan]

The creative sector is important to the whole UK economy, not just to London. That is why I am delighted that, as part of this package, Channel 4 has also agreed to double the number of jobs outside London, which goes to the hon. Gentleman’s point that it is important that we are boosting the creative sector all around the UK.

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

I agree with my right hon. Friend that reform is needed for Channel 4 to thrive in the future. Can she say whether the review will include Channel 4 having the ability not just to take a stake in programmes, which it cannot do at the moment, but to attract additional investment to go into programme making, as Channel 4 requested as part of its response to the Government’s review?

[Michelle Donelan]

On accessing borrowing, we will make it easier for Channel 4 to draw down on its existing allowance, but any additional borrowing will be taken on a case-by-case basis.

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

As a Leeds MP, I am delighted by today’s announcement, but I know from my constituents that it has been a wasted 18 months for them as they have had to deal with these privatisation proposals. Can the Secretary of State tell me what additional benefits will accrue to Leeds and Yorkshire from the announcements today, and, specifically, how many jobs will move from London to Leeds, so that people can have a much-improved life in Leeds and Yorkshire working for Channel 4?

[Michelle Donelan]

The additional jobs will be going not just to Leeds, but to other areas of the UK, including Glasgow and Bristol, and that will be a decision made and communicated by Channel 4 itself. As stated, the amount of jobs outside the capital will be double the number that has already been announced. The people of Leeds can take comfort from the decision that we have made today of putting Channel 4 on a sustainable footing so that its long-term future is secure.

[Michael Fabricant (Lichfield) (Con)]

I do recall, by the way, how Channel 4 had to be dragged kicking and screaming to move to Leeds, and even then the majority of personnel still remain in London. There is no question but that Channel 4 has some questions to answer on that. At the moment, Channel 4 has only 10% of the total audience. We want to increase that and we want to see Channel 4 survive. My question is that if that is to be achieved by borrowing, will Channel 4 not sink under debt? That was the reason why I supported its sell-off.

[Michelle Donelan]

As my hon. Friend will note, we have not increased the amount that Channel 4 can borrow. That will have to be done on a case-by-case basis. What we are doing is enabling Channel 4 to have the tools that it needs to survive in a very changed media landscape, including relaxing the publisher-broadcaster remit. That will enable it to have those commercial freedoms and to stop it having its current rigid business model.

[Sir Chris Bryant (Rhondda) (Lab)]

Would it not be really nice if, one day, when a Government Minister was appointed to replace another Government Minister and they knew that the policy their predecessor came up with was completely and utterly bonkers, instead of leaking a letter to the Prime Minister and letting it go out to the country rather than coming to the House first, they decided, “I know what I’m going to do: I’m going to come to the House of Commons and apologise. I’m going to say, ‘I am sorry, my predecessor had completely lost the plot for completely unknown reasons. I apologise to everybody for wasting all this time and energy and I am going to do better.’”? Or is that just the kind of plot that appears on Channel 4?

[Michelle Donelan]

As I am sure the hon. Gentleman knows, this topic has been looked at under various predecessors in this role. In fact, the consultation commenced well before my predecessor’s time. In terms of leaks, I can assure him that it was not a Government leak and there is an investigation going on.

[Andy Carter (Warrington South) (Con)]

I agree with my right hon. Friend’s assessment that Channel 4’s current business model is too rigid. Changing the publisher-broadcaster model will mean that Channel 4 can sell more of its products overseas, generating different revenue streams. Can she outline what percentage of the corporation’s overall revenue she expects to be generated from non-linear TV advertising in future?

[Michelle Donelan]

That is in the hands of Channel 4 and depends on what it does with the tools we are giving it. We are setting it up with the possibility of being sustainable in the future, but on the business model and how it reacts to the changes we have introduced, Channel 4 needs to be in the driving seat.

[Sir David Evennett (Bexleyheath and Crayford) (Con)]

I welcome my right hon. Friend’s statement and approach and the new package she has unveiled today. The media landscape is changing radically. Does she agree that it is essential that we give Channel 4 more freedom to generate income and to remain a sustainable business in future?

[Michelle Donelan]

I completely agree with my right hon. Friend. It is essential that we give Channel 4 the tools to succeed in a changing media landscape. To ignore the problem is to be in denial.

[Mr Toby Perkins (Chesterfield) (Lab)]

It appears that the best we can expect of this Government is that occasionally a Minister will come to the Dispatch Box and tell us they are not going to do the stupid thing that one of their predecessors had announced, so in that regard today is a day of triumph for this Government. The Secretary of State has said the status quo is not an option; will she expand on how she envisages the relaxation of the publisher-broadcaster restrictions on Channel 4 will work in practice? What does she think that will look like?

[Michelle Donelan]

We will be detailing that and it will form part of the media Bill. In the coming weeks we will work closely with Channel 4 and the independent production sector to make sure we get that absolutely right.

[Jason McCartney (Colne Valley) (Con)]

I welcome this boost to Channel 4’s sustainability and commercial freedom. With Channel 4, as we have heard, pledging to double its skills budget to £10 million and double the number of jobs outside London, and with its headquarters being in Leeds, does my right hon. Friend agree that this announcement is really good news for Yorkshire?

[Michelle Donelan]

This is good news for Yorkshire, but it is also good news for the taxpayer. Let us not forget that it is the taxpayer who owns Channel 4 and it is this Government who are putting it on a sustainable footing.

[Andrew Gwynne (Denton and Reddish) (Lab)]

I am not a churlish chap, so I want to thank the Secretary of State for her U-turn. I think she has come to the right decision on Channel 4; it is only a shame we had to spend £2 million to work that one out. May I ask her for a bit more detail on the package? She says there will be a statement at a later date, but can she explain to the House now whom the Department plans to consult and how in order to determine how it will relax the publisher-broadcaster restrictions on Channel 4?

[Michelle Donelan]

As I said, we will be working very closely with Channel 4, the independent production sector and public service broadcasters at large, and we will bring forward the details in the media Bill in due course.

[Steve Brine (Winchester) (Con)]

It is the right decision not to proceed with the sell-off of Channel 4 and the end—I hope—of picking fights. The channel told me at the Digital, Culture, Media and Sport Committee last year that it spent £220 million in 2021 supporting about 10,000 people down the supply chain in the nations and regions. Indeed, that was one of the main reasons I did not want to see this jewel sold. May I press the Secretary of State on the important independent sector? She mentioned increasing that portion to 25%: how might we get there and reach deeper into the creative industries in places such as Hampshire?

[Michelle Donelan]

I know that my hon. Friend’s constituency is a thriving hub for the creative sector, so people there will be listening very closely. As he stated, at the moment Channel 4 has to take only 25% of its content from independent producers. We will increase that. We will also look at what additional measures we can introduce to support in particular the small and most innovative independent producers by working with and listening to them.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

Happy new year, Mr Speaker.

Last year, evidence to an inquiry in the other place indicated that Channel 4 has commissioned about £84 million-worth of work in Wales over the last decade. What assurances can the Secretary of State give that DCMS will work with the Welsh Government to develop the relationship between Channel 4 and the Welsh independent production sector?

[Michelle Donelan]

I have an upcoming meeting with my Welsh counterpart to discuss that among other things. It is important that we work together on these agendas when they are vital for the whole of the UK.

[Nickie Aiken (Cities of London and Westminster) (Con)]

Happy new year, Mr Speaker.

I welcome the decision by the Government not to privatise Channel 4, and I thank my right hon. Friend for her time to discuss the matter with me. I am very proud that Channel 4’s headquarters are in my constituency. Does she agree that what makes Channel 4 so special is that it is a levelling-up company that supports jobs and production companies across the four nations? It is so important that we continue to support Channel 4 and ensure that it can sustain its business model.

[Michelle Donelan]

I know that my hon. Friend has been vocal on this topic. It is absolutely essential that we support Channel 4 in its levelling-up agenda. That is why I am particularly delighted that it is doubling its investment in skills and doubling the number of jobs outside London while retaining its footprint in the capital.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

Part of the agreement is that Channel 4 will double the number of jobs outside London, so what discussions have Ministers had with the broadcaster about how many jobs that will lead to in Glasgow specifically?

[Michelle Donelan]

Channel 4 has been very open in saying that these jobs will be based in a number of locations, including Glasgow, but the exact number in each location will be a decision led by Channel 4, which will communicate that itself.

[Nick Fletcher (Don Valley) (Con)]

Channel 4 spends much of its money in the north—and is set to spend more, which I welcome—but much of that is spent in Leeds. Doncaster has a wonderful creative industry, so will the Secretary of State meet me to see how we can expand the opportunities for Doncaster’s creative businesses?

[Michelle Donelan]

Obviously, the exact location of staff is a decision for Channel 4, but I know that several opportunities spring from making sure that Channel 4 is sustainable, especially in the independent production sector. I am sure that Doncaster can lead the way in that area.

[Jim Shannon (Strangford) (DUP)]

I very much welcome the Secretary of State’s statement, on which I think we are all very much in agreement. It was announced last year that Channel 4 had a new partnership with Northern Ireland Screen in a bid to grow the production sector in Northern Ireland. In addition, there are two Channel 4 higher-education partnerships in Northern Ireland—in Belfast and Newry. What discussions has the Secretary of State undertaken with Channel 4 to ensure that Northern Ireland is still a crucial part of TV production in the UK, whether or not Channel 4 is privatised?

[Michelle Donelan]

In the conversations and work that I have undertaken with Channel 4, the sentiment has been very much about the importance of the UK in general—including Northern Ireland—not just England. I am sure that Channel 4 would be more than happy to meet the hon. Member to discuss that in detail.

[Scott Benton (Blackpool South) (Con)]

Channel 4 has an unmistakable liberal-left metropolitan bias in its programming, particularly in its news output—so much so that it almost makes the BBC look impartial by comparison. How exactly will a few pages in its annual report change that ingrained cultural bias?

[Michelle Donelan]

At the heart of this piece of work, and of my predecessor’s piece of work, was not impartiality but the sustainability of Channel 4. That is what we have achieved from this announcement. However, as part of that, Channel 4 has agreed to have a new section in its annual report detailing a review of impartiality and editorial content from the previous year. That is certainly a good start and something that I look forward to reading.

NHS Winter Pressures

Monday 9th January 2023 Commons Chamber

16:10

[The Secretary of State for Health and Social Care (Steve Barclay)]

Mr Speaker, I wish to take this first opportunity to update the House on the severe pressures faced by the NHS since the House last met. I and the Government regret that the experience for some patients and staff in emergency care has not been acceptable in recent weeks. I am sure that the whole House will join me in thanking staff in the NHS and social care who have worked tirelessly throughout this intense period, including clinicians in this House who have worked on wards over Christmas. They include my hon. Friend the Member for Lewes (Maria Caulfield), the Minister for mental health, and the hon. Member for Tooting (Dr Allin-Khan), the shadow Minister for mental health.

There is no question but that it has been an extraordinarily difficult time for everyone in health and care. Flu has made this winter particularly tough: first, because we are facing the worst flu season for 10 years—the number of people in hospital with flu this time last year was 50; this year, it is over 5,100. Secondly, it came early and quickly, increasing sevenfold between November and December. It also came when GPs and primary and community care were at their most constrained. When flu affects the population, it affects the workforce too, leading to staff sickness absence that constrains supply just as it also increases demand.

These flu pressures came on top of covid. Over 9,000 people are in hospitals with covid, while exceptional levels of scarlet fever activity and an increase in strep A have created further pressure on A&E. All that comes on top of a historically high starting point. We did not have a quiet summer, with significant levels of covid, and delayed discharges were more than double what they were during the pandemic. I put that in context for the House: in June 2020, there were just 6,000 cases per day of delayed discharge—patients medically fit and ready to leave hospital—whereas throughout last year the figure was between 12,000 and 13,000 per day. The scale, speed and timing of our flu season have combined with ongoing high levels of covid admissions in hospital and the pandemic legacy of high delayed discharge to put real strain on frontline services.

Since the NHS began preparing for this winter, there was a recognition that this year had the potential to be the hardest ever. That is why there was a specific focus on vaccination. There were 9 million flu shots and 17 million autumn covid boosters. We extended eligibility more widely than in the past, to cover the over-50s, and became the first place in the world to have the bivalent covid vaccine, which tackles both the omicron and the original covid strain.

NHS England also put in place plans for the equivalent of 7,000 additional beds, including the introduction of virtual wards of a sort that one can see at Watford General Hospital. That innovation is still at an early stage of development, but has the potential to be significant in reducing pressure on bed occupancy in hospitals; in Watford alone, it has saved the equivalent of an extra hospital ward of patients. In addition, our plan for patients put £500 million specifically into delayed discharge, with a further £600 million next year and £1 billion the year after. Although the funds are already starting to make a difference, efforts have taken time to ramp up operationally with local authorities and the local NHS.

In addition, our 42 integrated care boards, recognising how bed occupancy in hospitals and social care are connected, will fully integrate health and care in the years to come. But likewise, they are at an early stage of maturity, with ICBs having become fully operationalised only in July 2022, less than six months ago.

Our plans involving the integration of hospital care and social care, additional funding for discharge, increased step-down capacity, the equivalent of 7,000 additional hospital beds and a vaccination programme at scale have provided the groundwork for the Government response, but it is clear we need to do more right now in light of the level of flu and covid rates and given that hospital occupancy remains far too high and emergency departments are too congested. Recognising that, we launched the elective recovery taskforce on 7 December, and in the coming weeks, we will publish our urgent and emergency care recovery plans. NHS England and the Department of Health and Social Care have been working intensively over Christmas on these plans, which were reviewed with health and care leaders at an NHS recovery forum in Downing Street on Saturday.

The recovery falls into three main areas of work: first, steps to support the system now, given the immediate pressures we face this winter; secondly, steps to support a whole-of-system response this year to give better resilience during the summer and autumn—as we have seen with the heatwave this summer and with the levels of covid, pressure is now sustained throughout the year, not just, as in the past, during autumn and winter; and, thirdly, our work alongside those two areas on prevention, on maximising the step change potential of proven technologies, such as virtual wards, and on the wider adoption of innovations such as operational control centres and machine reading software to treat more conditions in the community, away from someone reaching an emergency department in the first place.

Let me first set out the measures I can announce today to provide support to the NHS and local authorities now. First, we will block-book beds in residential homes to enable some 2,500 people to be released from hospitals when they are medically fit to be discharged. When that is combined with the ramping up of the £500 million discharge funding, which will unblock an estimated 1,000 to 2,000 delayed discharge cases, capacity on wards will be freed up, which will in turn enable patients admitted by emergency departments to move to wards, which in turn unblocks ambulance delays. It is important, however, that we learn from the deployment of a similar approach during the pandemic by ensuring that the right wraparound care is provided for patients released to residential care. I have asked NHS England to particularly focus on that, so that it is the shortest possible stay on patients’ journey home and into domiciliary care, and indeed it is in the NHS’s own interests for those stays to be as short as possible. Taken together, this is a £200 million investment over the next three months.

Next, our A&Es are also under particular strain. From my visits across the country I have seen and heard how they often need more space to enable same-day emergency care and short stays post emergency care. Our second investment is in more physical capacity in and around emergency departments. By using modular units, this capacity will be available in weeks, not months, and our £50 million investment will focus on modular support this year. We will apply funding from next year’s allocation to significantly expand the programme ahead of the summer. We are giving trusts discretion on how best to use these units to decompress their emergency departments. It might be for spaces for short stays post A&E care, where there is no need for a patient to go to a ward for further observation, or for discharge lounges that previously have not been able to take a patients in a bed—many of those are often simply chairs—or for additional capacity alongside the emergency department at the front end of the hospital.

The third action we are taking to support the system right now is to free up frontline staff from being diverted by Care Quality Commission inspections over the coming weeks, and the CQC has agreed to reduce inspections and to focus on high-risk providers in other settings, such as mental health. Those are the actions we are taking that will have an immediate effect.

I turn to the measures we are taking now that will give greater resilience into the summer and next winter. We now have 42 NHS system control centres in operation across England, staffed 24 hours a day, seven days a week, tracking patients on their journey through hospitals, helping us to identify blockages earlier and getting flow through the system. Where we have implemented these systems, such as the one I saw in operation in Maidstone, they have had a clear impact. We will therefore allocate funding in next year’s settlement to apply these systems more widely.

Similarly, we have also seen how the use of artificial intelligence and data can demonstrably reduce demand and release patients sooner. NHS England has been tasked with clarifying and simplifying the procurement landscape, taking on board best international practice, so that a small number of scalable interventions are taken forward where international experience shows they can deliver meaningful benefits to patients.

Next, we will capitalise on the incredible potential of virtual wards. Last week at Watford General Hospital, I saw how patients who would have been in hospital beds were treated at home through a combination of technology and wraparound care. Patients released sooner are often much happier, knowing that they are receiving clinical supervision and always have the safety net of being able to quickly return to hospital should their condition deteriorate. There is scope to expand these measures to many more conditions and many more hospitals in the months ahead.

We are also opening up more routes for NHS patients to get free treatment in the independent sector and offering even greater patient choice. The elective recovery taskforce is helping us to find spare operating theatres, hospital beds and out-patient capacity.

We must also take steps in primary care. We are clear that our community pharmacists can support many more things to ease pressure on general practice. From the end of March, community pharmacists will take referrals from urgent and emergency care settings; later this year, they will also start offering oral contraception services. But I want to do even more, as they do in Scotland, and work with community pharmacists to tackle barriers to offering more services, including how to better use digital services. The primary care recovery plan will set out a range of additional services that pharmacists can deliver.

Finally, notwithstanding very severe pressures, we know that to break the cycle of the NHS repeatedly coming under severe pressure, the best way to reduce the numbers coming through our front doors is to address problems away from the emergency department. On Friday, we signed a memorandum of understanding with BioNTech —a global leader in mRNA technology—to bring vaccine research to this country, which will give as many as 10,000 UK patients early access to trials for personalised cancer therapies by 2030. This builds on the 10-year partnership we struck with Moderna in December to also invest in mRNA research and development in the UK and build state-of-the-art vaccine manufacturing here.

We are also reviewing our wider care for frail, elderly patients in care homes long before they ever get to A&E or our hospitals. Take the brilliant work being done in Tees valley, where community teams are being used to help with falls to prevent unnecessary ambulance trips to hospitals. We have looked at what more support we can offer elderly patients further upstream. With an ageing population, and many more people with more than one condition, it is clear that we have to treat patients earlier in the community and go beyond individual specialties to better reflect patients with multiple conditions to give the right support to people where they are, which is often at home or in residential homes.

Today’s announcement provides a further £250 million of funding, which recognises the spike in flu on top of covid admissions and high delayed discharge numbers from the pandemic. The funding will provide immediate support to reduce hospital bed occupancy and decompress A&E pressures, and, in turn, unlock much-needed ambulance handovers. This funding builds on the £500 million announced in the autumn statement specifically for discharge, which is ramping up, and the additional funding for next year.

All this work ultimately builds on the much-needed greater integration of health and social care through the 42 integrated care boards, which we will strengthen through the Hewitt review, and through a step change in capability, including operational control centres.

This immediate and near-term action sits in parallel with our wider life science investment, such as the deals with BioNTech and Moderna, and underscores our commitment to recognising the immediate pressures on the NHS and investing in the science that will shift the dial on earlier, upstream treatment at scale, particularly for the frail elderly, long before a patient reaches an emergency department. This is a comprehensive package of measures, and I commend this statement to the House.

[Mr Speaker]

I call the shadow Secretary of State.

16:25

[Wes Streeting (Ilford North) (Lab)]

Happy new year to you, Mr Speaker, and to the rest of the House. I thank the Secretary of State for Health and Social Care for advance sight of his statement.

This winter has seen patients waiting hours on end for an ambulance, A&E departments overflowing with patients, and dedicated NHS staff driven to industrial action—in the case of nurses, for the first time in their history—because the Government have failed to listen and to lead. I notice that the Secretary of State did not talk about the abysmal failure of his talks with nurses and paramedic representatives today. Let me say to him: every cancelled operation and delayed appointment, and the ambulance disruption due to strikes, could have been avoided if he had just agreed to talk to NHS staff about pay. Today, he could have opened serious talks to avert further strikes. Instead, he offered nurses and paramedics 45 minutes of lip service. If patients suffer further strike action, they will know exactly who to blame.

Of course, the Prime Minister has already shown that he is not interested in solving problems; he resorts to the smokescreen of parliamentary game playing by bringing in legislation to sack NHS staff for going on strike. I ask the Secretary of State, in his sacking NHS staff Bill, how many nurses is he planning to sack? How many paramedics will he sack? How many junior doctors will he sack? The Government have the audacity to ask NHS staff for minimum service levels, but when will we see minimum service levels from Government Ministers and the entire Government?

After arriving at the Derriford Hospital in Plymouth, an 83-year-old dementia patient waited in the back of an ambulance outside A&E for 26 hours before being admitted. That was on 23 December, when no strikes were taking place; the Secretary of State should listen. The patient’s family found him in urine-soaked sheets, and since arriving in hospital, he has contracted flu. His daughter said of the hospital staff:

“They’re polite, they’re caring, and they are trying their best. It’s just impossible for them to do the work they want to do.”

Let me say what the Health Secretary and Prime Minister refuse to admit: the NHS is in crisis—the biggest crisis in its history. That is clear to the staff who have been slogging their guts out over Christmas and to everyone who uses it as a patient; the only people who cannot see it are the Government.

What has been announced today is yet another sticking plaster when the NHS needs fundamental reform. The front door to the NHS is blocked, the exit door is blocked, and there are simply not enough staff. Where is the Conservatives’ plan to fix primary care, so that patients can see the GP they want in the manner they choose? After 13 years of Conservative government, they do not have one. Where is the plan to recruit the care workers needed to care for patients once they have been discharged from hospitals, and to pay them fairly so that we do not lose them to other employers? After 13 years of Conservative government, they do not have one. Where is the plan to train the doctors, nurses and health professionals the NHS needs? After 13 years of Conservative government, they do not have one.

Well, we do. The Secretary of State is welcome to nick Labour’s plan to abolish non-dom tax status and train 7,500 more doctors and 10,000 more nurses and midwives every year; to double the number of district nurses; and to provide 5,000 more health visitors—a plan so good that the Chancellor admitted that the Conservative Government should nick it. After 13 years of mismanagement, underfunding and costly top-down reorganisations, however, all the Conservatives have to offer the NHS is a meeting and a photo op in Downing Street.

The collapse of the health service this winter could be seen coming a mile away—health and social care leaders were warning about it last summer—so why is the Secretary of State announcing these measures in the middle of January? Why have care homes and local authorities been made to wait until this month for the delayed discharge fund to reach them? It is simply too little, too late for many patients.

In fact, this Government are so last minute that, after announcing this plan last night, they found an extra £50 million and sent out another press release. I know most of us are happy to find a spare fiver lying around the house that we did not know was there, but this Prime Minister seems to have 50 million quid stuck down the back of the sofa. What on earth is going on? No wonder they cannot get money to the frontline: the left hand does not know what the right hand is doing.

It is intolerable that patients who are fit and ready to leave hospital are then stuck there for months because the care they need is not available in the community. They are not bed blockers, and they are not an inconvenience to be dropped off at a hotel and forgotten about. They need rehabilitation at home, rather than a bed in a care facility. Vulnerable patients deserve proper support suited to their needs, or they will fall ill again and go back to hospital. What about all these beds the NHS is procuring, and what about the capacity that families need? I will tell hon. Members what will happen: they will not get the care, and they will be coming right back through the front door of A&E, with the cycle of broken systems repeating itself again and again. Where is the choice and control for patients and their families who may not want to be discharged to a hotel?

I am afraid that, after 13 years, this just is not good enough. The Prime Minister might not rely on the NHS, but millions of ordinary people do. They are sick and they are tired of waiting. There have been 13 years of Conservative Government now—13 years—and look at what they have done to the NHS. Did the Health Secretary listen to himself as he described the situation in hospitals of people waiting on chairs for discharge, the trolleys in the corridors and people waiting longer than ever? Whose fault is it? It is not that of the NHS staff he is threatening to sack, but of the Conservative Ministers who have made disaster after disaster. After 13 years of Conservative Government it is clear that the longer they are in power, the longer patients will wait. Only Labour can give the NHS the fresh start and fresh ideas it needs.

[Steve Barclay]

The hon. Member talks about a fresh start, but even his own shadow Cabinet colleagues do not seem to agree with his plans. His own deputy leader seemed to distance herself from his plans to use the private sector, and his own shadow Chancellor seems to have distanced herself from his plans for GPs. Perhaps he can share with the House exactly how much his unfunded plans for GPs will cost, because the chief executive of the Nuffield Trust has said:

“It will cost a fortune”,

and is

“based on an out of date view”.

The point is that he has no plans that his deputy and his own colleagues support, and he has not set out how he would fund those plans in a way that does not divert resource from other parts of the NHS.

The hon. Member talked about pressure, yet there was no mention of the fact that the NHS in Wales, the NHS in Scotland and, indeed, health systems across the globe have faced significant pressure as a result of the combination of covid spikes and flu spikes, particularly in recent weeks. This is not a phenomenon limited to England and the NHS; this is a pressure that has been reflected internationally, including for the NHS in Wales.

The hon. Member refers to talks with the trade unions, and it is right that we are engaging with the trade unions. I was pleased to meet the staff council of the NHS today. Indeed, the chair of the NHS staff council, Sara Gorton, said the discussions had made “progress”, notwithstanding one trade union leader who was not in the talks giving an interview outside the Department to comment on what had and had not been said in those talks. We want to work constructively with the trade unions on that.

The hon. Member says that we are only announcing measures today, but again, he seems to have written those comments before he got a copy of the statement. The integrated care boards took operational effect in July last year—[Interruption.] Because they are scaling up, we are putting control centres in place and we are integrating health and social care. In the autumn statement, we announced £500 million for discharge, a further £600 million next year and £1 billion the year after, recognising that there is significant pressure, and that is ramping up. NHS England set out its operational plans in the summer, including the 100-day discharge sprint. That, for example, set out the greater use of virtual wards, which is new technology being rolled out at scale. It also announced the extra 7,000 community beds. Indeed, we also set out the additional measures in our plan for patients.

What is clear when we have a sevenfold increase in flu in a month—50 cases admitted last year compared with 5,100 this year—is that there is a combination of a surge in demand on top of the existing high-level position, and the surge in demand corresponds with a constraint on supply as staff absences also increase because of flu, so during the Christmas period community services are more constrained. Those two things together have created significant pressure on our emergency departments. That is why in the engagement I have had with health leaders the two key messages they gave to me were the importance of getting flow into hospitals, which is constrained by the high bed occupancy—that is why getting people out of hospital is so central to relieving pressure—and, within the emergency departments specifically, the need to decompress those services with same-day emergency treatment and having short stay post-emergency departments. That is a better way to decompress those emergency departments—through the triaging and bringing other clinical specialties closer to the front door. We have listened to the NHS frontline and those were the two key requests made to me, alongside other issues such as care quality inspections and how to make them more flexible. However, alongside those immediate pressures, we need to recognise that we had pressures last summer during the heatwave and we had pressures in the autumn, which is why we have announced a wider set of measures today.

So we have listened and we have acted; we have taken measures to deal with the immediate pressure, but we have also set out how we will build further capacity that will go through into the autumn. Alongside that, we have signed deals, for example with Moderna and BioNTech, and we are bringing forward the life science investment so that that has a better impact on pressures on the frontline.

[Mr Speaker]

I call the Chair of the Select Committee.

[Steve Brine (Winchester) (Con)]

There is no doubt that, in some places more than others, patient flow in acute hospitals is the issue gumming up the system, and the Secretary of State is right to say that demand far outstrips supply, in part because of the very high flu numbers. Today’s injection of funding is very welcome as is the additional surge capacity the Secretary of State spoke about in his statement. His mention of prevention is especially welcomed by me; let us do so much more on this. Another £250 million is a lot of the public’s money. What real-time oversight does he have to ensure that NHS England spends it wisely, and may I make a plea that domiciliary care is not overlooked, because the lack of care in people’s homes is every bit as much the enemy of patient flow as the lack of care home places that he has identified today?

[Steve Barclay]

My hon. Friend raises an important issue about getting flow into the system, not least because delays in ambulance handovers lead to the highest risk in what is a whole-of-system issue where the patient is not seen and treatment is delayed. That is why flow through discharge is so important, because, while that often concerns the back door of the hospital, it is actually the pressure at the front door that is most acute. The Government recognised that in the autumn statement and that is why there was additional funding with the £500 million for delayed discharge. That has taken some time to ramp up, but we recognise that because of the flu there is an immediacy in the pressure on A&E that we need to address.

My hon. Friend’s point speaks to one of the key lessons from the covid period. It is not simply about releasing patients from hospitals who are fit to discharge; it is also about the wraparound services provided for those patients so that they do not get stuck in residential care for longer, and they are still able to go home and get the domiciliary care packages. NHS England is focused on that so that they have the wraparound services alongside that discharge.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

We have seen this year in, year out: money thrown into the NHS at a winter crisis point, too late to spend it sensibly, yet this Government have been in power for nearly 13 years. I could not identify anything new in the Secretary of State’s speech. We have talked about discharge before, and picking up on the point made by the Select Committee Chair the hon. Member for Winchester (Steve Brine), without proper funding for local councils for domiciliary care and for funding care homes, this will never work.

[Steve Barclay]

In terms of what is different, there is the block booking that will enable residential care to put the workforce in place and release the delayed discharge of the 13,000 patients who are in hospital but medically fit to be discharged. The accelerated release of those patients will help those at the front door, where the spike in flu is so acute. That is what we are doing; we are responding to what health leaders have said is the key intervention we can take. Of course, that is not being done in isolation. The point is that that is coming on top of the £500 million announced during the autumn statement and is to provide further capacity, recognising the significant pressure that the system is under.

[Chris Grayling (Epsom and Ewell) (Con)]

My right hon. Friend is absolutely right to highlight the fact that this is not purely an English issue but one affecting whole systems across the western world. I welcome many aspects of what he said, and I am grateful to staff at Epsom Hospital and those in the ambulance service in my constituency. So much of the time of those paramedics is spent taking frail elderly people from care homes to A&E where, frankly, they probably should not be. What steps can he take to divert some of those frail and elderly people from A&E to take some of the pressure off and get them to an environment where they will be much better looked after?

[Steve Barclay]

My right hon. Friend is absolutely right. That is where virtual wards have potential significant benefits in both demand management—avoiding elderly, frail patients coming to emergency departments in the first place—and releasing capacity in hospitals. The virtual ward at Watford General Hospital, equivalent to an additional ward of the hospital, is able to release patients with the comfort of knowing that they are still under supervision. Their medical information is being tracked and monitored and they get a daily phone call from a nurse. They also know that, if they need to come back to the hospital, they can do so much more quickly. That gives patients the comfort and confidence to recover at home, which is often where they want to be. Indeed, patient satisfaction from that trial at Watford was over 90%.

[Mr Ben Bradshaw (Exeter) (Lab)]

Given that there are currently 165,000 vacancies in social care—a 51% increase in just a year—where will the Secretary of State magic up the people to look after those he wants to put in hotels?

[Steve Barclay]

The whole purpose of the £500 million is to put more support into local authorities’ funding for social care. About a quarter of that funding is going specifically on workforce interventions, but we are also using other measures. One of the other things we have been doing is boosting workforce recruitment through international recruitment, with care sector staff on the shortage occupation list.

[James Morris (Halesowen and Rowley Regis) (Con)]

I welcome the Secretary of State’s statement and in particular the additional money for discharge. Does he agree that, in regard to integrated care systems, we really need to accelerate the integration between health and social care? Notwithstanding what he said about maturity, that is the key to the future integration of health and social care, and that will solve many of the problems that we face at the moment.

[Steve Barclay]

My hon. Friend is right. That is why, in the run-up to Christmas, one of the ministerial priorities was to have a whole series of ministerial meetings with the chairs and chief executives of the integrated care boards, because, as the Government have recognised, it is through the integration of those 42 ICBs that we will bring health and social care together. The ICBs have been operationally in place since July and are ramping up at pace. One thing that is making a real difference to them is having control centres that allow patient flow to be tracked through the system—Maidstone is a good example—with the data allowing blockages, as a whole-of-system problem, to be gripped at a much earlier stage.

[Rachael Maskell (York Central) (Lab/Co-op)]

Staff retention in both the health sector and the social care sector is at the heart of this crisis, but staff cannot be retained if they are not paid and, if they are not paid this year, the issues will not be addressed. Will the Secretary of State recognise that when he set the remit for the pay review body, inflation was not where it is and we did not have a war in Ukraine, so factors have changed and the remit for pay must therefore change this year so that we can retain the staff to deliver what he proposes?

[Steve Barclay]

On delayed discharge, the key is having domiciliary care support. That is not about the NHS Agenda for Change contract; it is about funding for those in the social care sector. Around a quarter of delayed discharges are due to delays in what is known as pathway 1, the domiciliary care side. That is what the £500 million in particular recognised. We are putting in more money, but that is about the social care sector so we can get flow through delayed discharge.

[Priti Patel (Witham) (Con)]

The Secretary of State speaks about getting more people treated in the community, and I think we all support that. He will know that in my constituency we have a higher than national average patient-to-GP ratio. It is a major problem for us and has been for a long time. We are short of diagnostic facilities and Essex County Council needs more resources to deal with adult social care for the very reasons he has spoken about. Will he please write to me—he will not be able to do it from the Dispatch Box today—with specific details of when, on all three of those areas, the money he has announced today will come to the frontline in Essex? Our doctors and nurses need the money and resources to do what they joined the profession for: to provide the care they really believe in to members of the public.

[Steve Barclay]

First, I am very happy to write to my right hon. Friend with further details. For the benefit of the House, in relation to the £500 million announced in the autumn statement, local authorities gave the Department and NHS England their data returns on Friday. We will have that data, which I will be able to share more specifically in relation to the £500 million. The £250 million for NHS England announced today is for very urgent delivery into systems and that will be going out extremely quickly.

[Daisy Cooper (St Albans) (LD)]

NHS leaders have today told the Health Services Journal that the Government have just seven to 10 days to get the additional funding to discharge hospital patients to the frontline for it to make any difference whatever. The NHS Confederation has said that the next three months in the NHS will likely be defined by critical incidents being declared. Will the Secretary of State promise that the extra funding will reach the frontline in the next seven to 10 days? Will he please finally declare a national critical incident, so that we can mobilise every single bit of our NHS to save lives and save the NHS?

[Steve Barclay]

The very purpose of today’s announcement—I have made it on the first day that Parliament is back—is to give that urgent uplift in funding to local authorities and ICBs so that they can act now, knowing that that funding is available. They have the additional £500 million, which is ramping up as well. That is part of a wider package of measures—NHS England putting in community support with 7,000 more beds—but the purpose is to recognise the very real immediate pressure the frontline has been under. It also needs to be viewed as something that other healthcare systems across the globe have faced: a very sudden and very significant spike in flu seven times higher than last month and 100 times what it was last year.

[Sir Edward Leigh (Gainsborough) (Con)]

Yes, but they also have covid and flu in France, Germany, Italy, Sweden and Holland. Winter after winter, they cope far better because they have much more integrated social insurance systems. Some people like me have been banging on about this for years, but now the former Health Secretary, my right hon. Friend the Member for Bromsgrove (Sajid Javid), is suggesting a social insurance system, as is newspaper editorial after newspaper editorial. What is our long-term plan? We cannot leave the Labour party to have a long-term plan while we do not. How are we going to reform this centrally controlled construct? People of my age have paid taxes all their life and their only right is to enjoy the back of a two-year queue! What is the Secretary of State’s plan?

[Steve Barclay]

First, integrating health and social care through the integrated care boards. That is what we put in place from July, recognising that actually the pressures on the NHS are often as much about pressure on social care as they are about pressures in the NHS itself. In particular, if we look at ambulances, we see that often it is the delay in domiciliary care that is driving the blockage on the wards, which in turn applies there. Secondly, it is recognising that there are workforce pressures, which is why NHS England has been working on the workforce plan that has been set up.

Thirdly, we have already set out our elective recovery plan. Over the summer, the longest waits—those of over two years—were largely cleared. [Interruption.] Opposition Front Benchers chunter, “How’s it going?” Let us look at how it is going, compared with the Labour Government’s two-year clearance in Wales. Before Christmas, there were about 60,000 people in Wales who had been waiting for more than two years; in England there were fewer than 2,000. We are making progress on the longest waits through the work of Jim Mackey, Professor Tim Briggs and Getting It Right First Time. We are innovating with the surgical hubs and the community diagnostic centres. That, in turn, gives greater resilience to the electives that used to be cancelled when there was winter pressure. With hot and cold sites, they are much more resilient.

Finally, I must take issue with what my right hon. Friend says. In France, Germany, Canada and many other countries, the massive spike in flu and covid pressure, combined with pressures from the pandemic, has placed similar strains on healthcare systems. It is simply not the case that the issue affects England alone.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

I am really not clear how, despite all the warnings, the Government have got themselves into this position after the biggest crisis in the NHS. We all know that it is a no-brainer to invest in social care to reduce bed blocking, so what exactly is the purpose of the pilot that has been announced for Hull and the Humber? It will tell us what we already know: that what we need is investment in social care and reform of social care.

[Steve Barclay]

We recognised very early—in fact, NHS England recognised it in the summer—that this winter was likely to be extremely hard, both because population resilience to flu would be lower as a consequence of the pandemic and because of the combination of pandemic backlogs with the ongoing level of covid admissions. As I have said, we have more than 9,000 patients in hospital with covid and a further 5,000 with flu; that comes on top of the other strains from the pandemic that we have seen. The measures taken, such as boosting the vaccination programme, extending it to the over-50s and being the first place to have the bivalent vaccine, were part of the package in NHS England’s operational plan.

We also recognised—this point goes to the heart of the right hon. Lady’s question—that social care is central. That is why, notwithstanding the other economic pressures that the Government faced, health and education were prioritised in the autumn statement, with an extra £6.6 billion in funding for the NHS over the next two years and an extra £7.5 billion in funding for social care. That was recognised with a clear prioritisation in the autumn statement. The reality is that we have had a massive spike in flu cases, meaning that there have been 100 times as many hospital admissions for flu as there were last year.

[Holly Mumby-Croft (Scunthorpe) (Con)]

I welcome the measures that my right hon. Friend has set out for us today; it is absolutely right that we consider a wide suite of measures. With that in mind, may I draw his attention to my region? We have, I think, the second biggest ICB area by geography, but without the population to match. Will he consider giving us an additional community diagnostic hub? For everyone in the area to have access, we need two, not one. Will he look at that, please?

[Steve Barclay]

My hon. Friend is absolutely right to highlight the importance of diagnostic centres, which we have particularly prioritised. As she knows, I am extremely keen to accelerate the programme so that where we award community diagnostic centres, they open in 2023. In my view, too many plans were for 2024, so that is a particular challenge that I have been posing. My hon. Friend has campaigned strongly on behalf of her constituents; I know that the Minister of State, my hon. Friend the Member for Colchester (Will Quince), is looking at the proposal that she has shared and will be happy to discuss it with her in the days ahead.

[Maria Eagle (Garston and Halewood) (Lab)]

Hospitals used by my constituents in Liverpool and Knowsley have had queues at A&E of 33 hours, 41 hours and 30-plus hours. They have had dozens of ambulances queuing up outside for entire shifts, unable to transfer even one patient. These problems were predictable and—as the Secretary of State has just said—predicted, yet he disappeared over Christmas and the new year when they were going on, only emerging last week to blame them on flu and covid. When will he acknowledge that leaving it until January to deal with winter pressures is too little, too late? When will he take responsibility and apologise for the lamentable situation in which he has left my constituents and many others across this country? The fear, the pain, the worry—when will he say sorry for it?

[Steve Barclay]

That simply is not accurate. Let me give the hon. Lady some specific examples. Under the auxiliary contract with St John Ambulance, we invested an extra £150 million in the ambulance service, and we invested a further £50 million in additional capacity for call centres. Taxpayers spent £800 million on the new Royal Liverpool Hospital, and during 2018-19 a brand-new hospital was built at Aintree. However, this is not simply about investing in new hospitals; it is also about looking at the integration between health and care, and that was recognised in the autumn statement, which provided an additional £500 million. It is simply inaccurate to say that there were no measures in the summer. The St John Ambulance contract and the community first responders, and the service for frail and elderly people, will help with demand management and prevent people from going to emergency departments in the first place.

[Sir Julian Lewis (New Forest East) (Con)]

Do the Government recognise the danger of a major increase in pressure on the NHS as a result of any new variant of covid that may be imported from China? How quickly would we be able to identify such a variant and prepare a vaccine against it?

[Steve Barclay]

Let me first congratulate my right hon. Friend—along with the whole House, I am sure—on the knighthood that he received from His Majesty.

According to the analysis we have received, the variant in China is the same as the one in the United Kingdom. On the other hand, the data shared by China is often not as clear as we would like. That is why, over the Christmas period, my right hon. Friends the Prime Minister and the Secretary of State for Transport announced proportionate measures involving covid tests for travellers and, in particular, sequence variant testing for those coming into the UK, in order to identify any new variant quickly.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Strikes by nurses and ambulance workers are a last resort for overworked staff, who fear that patient safety is suffering as a result of increased demand and staff shortages. Instead of providing proper pay increases, the Labour Welsh Government have responded by offering Welsh health service staff tokenistic one-off payments, and, reportedly, the right hon. Gentleman’s Government are considering doing the same in England. Can he guarantee that if that approach is taken, one-off payments will be recognised as support with the cost of living crisis rather than proper pay increases, and will be treated as such for tax and benefit purposes?

[Steve Barclay]

As we have said previously, we have a process, through the independent pay review body, to look at these issues in the round and, when it comes to the needs of our NHS—my focus, obviously, is on the NHS in England; it is for the Welsh Government to conduct negotiation in Wales—to balance what constitutes the right level of funding for retention and recruitment against the wider issues of affordability for the economy as a whole. However, we are keen to engage with the trade unions, and we had a good discussion with them today. I am pleased that they recognised the progress made in that discussion, and I look forward to further discussions with them.

[Siobhan Baillie (Stroud) (Con)]

In recent weeks I have seen a few of my constituents in tears because they have been with loved ones in A&E and seen elderly residents stuck on trolleys. No Member of Parliament wants to deal with that. I know that my right hon. Friend is working hard, and I welcome his announcements, but the public are watching more and more money going into the NHS, and I think we need to hear, very clearly, his assessment of when the further money that has now been announced will lead to meaningful change in Gloucestershire’s A&E departments and elsewhere.

[Steve Barclay]

That is a fair challenge. Let me divide it into three sections. First, there is a recognition that the combination of the legacy from the pandemic, the ongoing covid issues and, in particular, the massive spike in flu create an immediate pressure in our A&E departments. The package announced today shows that we have listened to those on the frontline, and have responded.

Secondly, there is a recognition—this is relevant to some of the questions asked today—that the system has been under pressure for some time. Therefore, the second phase looks at innovation, technology, artificial intelligence, virtual wards and ways of doing things differently. To take the example of the frail and elderly, that will address their needs upstream in the care home before they get to the emergency department or release them from hospital quicker, provided they have the safety net of being part of a virtual ward, where they are subject to ongoing clinical supervision. If they need to come back to hospital, they can do so much more easily than would otherwise be the case. That stops the boomerang of patients being released early and then coming back. That second phase includes the modular capacity, because space is needed to streamline and to triage. That compression within the emergency department also drives inefficiency and poor care.

Thirdly, the Government have invested in the life sciences industry. R&D investment of £15 billion to £20 billion is a big marker of that. One of the priorities is to say that we can do certain things at scale with companies such as Moderna that will shift the dial in healthcare. That is a third but significant part of this, particularly in respect of the prevention work that we can do.

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

The failure to fix social care is having an impact on not only the acute service but the mental health service. I have raised directly with the Secretary of State the problems facing the Humber NHS trust, where 42% of adult learning difficulty beds have been taken by patients with delayed discharge and where 17% of adult mental health beds and 22% of child and adolescent mental health beds have been taken by patients waiting for discharge. What investment and support will be given to provide the right social care and support services, to enable beds to be freed up not just in the acute service but in the desperately needed mental health services?

[Steve Barclay]

The hon. Lady is right to highlight mental health, which is an extremely important part of the wider health landscape. That is why the Government are increasing funding for mental health by £2.3 billion. We must also consider how we get better value for money from that spending. The reform of the Mental Health Act 1983 that the Minister for mental health, my hon. Friend the Member for Lewes (Maria Caulfield), is taking forward will help us better target that funding in ways that deliver value for money.

[Richard Graham (Gloucester) (Con)]

I join the Secretary of State for Health and Social Care in paying tribute to those working in hospitals, such as the Gloucestershire Royal Hospital in my constituency, so intensely and under such heavy pressure. I welcome the changes that he has announced, but will he confirm what progress his Department has made with the Home Office to prioritise tier 2 health visas and to provide a grace period for international GP trainees? Lastly, will my right hon. Friend consider helping staff with parking and out-of-hours food this winter, which has been described by so many as a perfect storm?

[Steve Barclay]

As I said at the outset, today’s announcement is part of the wider recovery programme that we discussed with health leaders at No. 10 on Saturday. That will have a number of components, one of which is the urgent and emergency care recovery. Work is ongoing with Home Office colleagues on the visa component. My hon. Friend raises an extremely important point that a number of clinicians on the frontline have raised with me, and I am discussing it with my right hon. and learned Friend the Home Secretary.

[Stephanie Peacock (Barnsley East) (Lab)]

More than 5,000 operations have been cancelled at Barnsley Hospital in the last year. What are the Government doing to reassure those in Barnsley who are waiting in pain for delayed operations? Will they ensure that any new staff are deployed first to the areas that need them most?

[Steve Barclay]

I share the hon. Lady’s desire to reduce the backlog in the electives programme, which is why the Government have invested a further £8 billion. To ensure that it delivers value for money, the key focus is on building greater resilience into that elective programme through surgical hubs and the better use of community diagnostic centres, in particular by having a distinction between hot and cold sites.

Too often in the past, as winter pressures have surged, elective operations have been cancelled to free up bed capacity. Having the surgical hubs and the hot and cold sites builds greater resilience. I pay tribute to the work of the Getting It Right First Time team, and to Professor Tim Briggs and Jim Mackey, who are leading that programme. We saw the progress that was made in the summer and we are very focused on the next stage, which is 78-week waits. We are working very actively on that.

[Jason McCartney (Colne Valley) (Con)]

Maple ward at Holme Valley Memorial Hospital used to provide much-needed community intermediate care for those leaving Huddersfield Royal Infirmary. Unfortunately, it closed temporarily around six years ago. Does the Secretary of State agree that this is exactly the kind of facility that we now need in the community, not only to give great intermediate care but to free up capacity in our main hospitals?

[Steve Barclay]

My hon. Friend makes an important point. Often the debate is about beds, but in reality it is as much the workforce that go with those beds that we need to consider. The point about step-down care is that it has a lighter patient-staff ratio compared with what is necessary for more serious patients at the acute stage. It is important that we look at the end-to-end capacity, and that includes step-down care. That is why NHS England set out 7,000 additional beds in its summer plans. We are also doing things differently using technology. Virtual wards allow some patients to be at home, which many patients prefer, but with wraparound clinical support. Virtual wards and step-down care in the community are part of that wider landscape.

[Zarah Sultana (Coventry South) (Lab)]

Iqbal fell seriously ill on Christmas eve. His family rang for an ambulance, calling 999 three times and pleading for help. They waited for three hours, but by the time an ambulance arrived, it was too late. Paramedics tried desperately to save his life, but the 58-year-old father tragically passed away. His daughter Minnie was clear about who was to blame, saying that it was not NHS staff but Tory Governments who have left the NHS in what she called a “disastrous state”. Will the Health Secretary heed Minnie’s words and undo 13 years of running down our NHS by giving NHS workers a proper pay rise, ending all forms of privatisation and giving the NHS the funding it desperately needs?

[Steve Barclay]

As I said in my opening remarks, I regret the fact that some patients in emergency care did not receive acceptable care in recent weeks, but I gently remind the hon. Lady that the pressure, particularly around flu and covid rates, is something that has put huge pressure on the NHS in Wales and Scotland, as well as across Europe and across the globe.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I thank my right hon. Friend for his statement and I welcome North Yorkshire’s involvement in the trials he has announced today. He has highlighted the increased bed occupancy that has come from the flu surge. NHS North Yorkshire briefed me earlier that flu vaccination take-up in North Yorkshire was 64%. That means that one in three people is not vaccinated. Does my right hon. Friend agree that putting more focus on encouraging vaccination take-up is one way in which we can all help to alleviate this crisis and reduce demand in our hospitals?

[Steve Barclay]

I very much agree with my hon. Friend about encouraging greater vaccine take-up. I think we can agree across the House that that is to be encouraged, and I hope all Members will reinforce the UK Health Security Agency’s messages on the take-up of the vaccine. We have expanded the scope to include over-50s, and we have the world-leading bivalent vaccine that targets both omicron and the original strain of covid, but it is important that as many people as possible get their flu jab as well, and I encourage all Members to support that.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The NHS and social care are in unprecedented crisis, even if that is a word that the Secretary of State and the Prime Minister refuse to use. We know that resilience was stripped out of our NHS years before the covid pandemic, and I come back to the level of vacancies: there are 133,000 in our NHS and 165,000 in social care. Will the Minister admit that, as well as growing the workforce, we urgently need to keep the workforce that we have? If so, why are the Government not at least meeting the nurses halfway on pay, as the Royal College of Nursing has offered to do, and why, after 13 years of Tory Government, is the average care worker’s pay less than the pay at McDonald’s or Amazon?

[Steve Barclay]

It would have been welcome if, within that list, the hon. Lady had recognised the Government’s significant investment in Brighton’s new hospital. There are also more doctors and nurses in the NHS this year than there were last year.

The Chancellor announced the £500 million in his autumn statement partly in recognition of the pressure on the social care workforce, which is why the funding was prioritised, and Home Office colleagues have put social care workers on the shortage occupation list to enable us better to attract international talent.

[Mr Robin Walker (Worcester) (Con)]

My right hon. Friend made many sensible points in his statement, but he will forgive me for focusing on the local pressures in Worcestershire, which remain acute. Our two A&Es saw 14,000 attendances in December, up from 12,500 in December 2021 and 10,600 in December 2020. The hospital trust tells me that, on any given day in December, around 100 patients in hospital beds could have been cared for somewhere else.

Today, I read my right hon. Friend’s press release on extra funding for neighbouring Warwickshire. Will he ensure that a significant amount of this £200-million funding package reaches Worcestershire hospitals? There is an acute need to upgrade our A&Es, which I understand is due to happen this year.

[Steve Barclay]

As my hon. Friend knows, I signed off those A&E upgrade plans when I was Chief Secretary to the Treasury, but they have been delayed by contractual disputes on the ground. I share his desire to see them expedited. The Government made that investment, and we want to see a consequent improvement in operational performance.

My hon. Friend is right that today’s announcement will enable ICBs, including those in his area, to accelerate their discharge plans. Plans were already in place because of the funding in the autumn statement, but today’s announcement allows ICBs to go further and quicker in releasing patients, which will in turn take pressure off A&E departments.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

It is one thing to talk about blocked beds but, as many Opposition Members have said, care is also about staff. How does the Secretary of State expect care homes to cope with this increased pressure when one in 10 social care posts remains empty and when staff feel overworked, underpaid and exhausted?

Last year, a report commissioned by the Department of Health and Social Care found that the rapid discharge of people from hospital to care homes during the first wave of the pandemic, without adequate covid testing, was “highly likely” to have caused some outbreaks. How will the Health Secretary avoid the fatal mistakes of the past by militating against the seeding of more infections in care homes and, as my hon. Friend the Member for Ilford North (Wes Streeting) said, the danger of unsuitable care leading to hospital readmissions?

[Steve Barclay]

The hon. Lady makes a good point about the risk of introducing infections into care homes, as happened in the past. It is worth the House reflecting on the fact that we are in a very different position from the start of the pandemic. First, we now have vaccines in place for care home residents and staff. Secondly, we now have antivirals. Thirdly, we now have huge knowledge about covid. From an infection point of view, the risk of releasing people into care homes is now in a very different place.

On the wider workforce, part of the reason for the £500 million announced in the autumn statement is to support measures for the workforce, but we are also looking to boost numbers through international recruitment.

[Sir Robert Syms (Poole) (Con)]

I welcome what the Secretary of State says about community pharmacists, who have always wanted to do more. They can take a lot of the burden off GPs and, if access to GPs were improved, fewer people would turn up at A&E. It seems to be a win-win-win situation, so let’s do it.

[Steve Barclay]

I could not agree more. There is a huge opportunity for pharmacists to do more, and I have asked the Department and NHS England to explore that at pace. I expect to say more on that when I announce our recovery plan at the end of the month.

I think we can go even further because, alongside pharmacists, there is much more scope to work with employers. Staff absences due to cardiovascular conditions are a significant cost to employers, so it is in their interest to work with us on prevention measures.

Much more can also be done through home testing. One of the lessons from covid is that the public will test at home. In looking at the challenge of excess deaths, there is a significant opportunity to do more home testing, employer testing and work in the community, particularly through pharmacists.

[Wera Hobhouse (Bath) (LD)]

When a constituent of mine fell seriously ill recently, his wife rang 999. It was a category 2 emergency that then escalated to category 1, but it still took the ambulance nearly two hours to arrive and, despite the paramedics’ heroic efforts, my constituent sadly died. There are now up to 500 avoidable deaths per week because of A&E delays, according to the Royal College of Emergency Medicine. Will the Government support the Ambulance Waiting Times (Local Reporting) Bill, introduced by my hon. Friend the Member for St Albans (Daisy Cooper), to identify hotspots with the largest waiting times and put support to where it is most needed?

[Steve Barclay]

I have seen a lot of speculation in the media about the excess mortality to which the hon. Lady refers. I have discussed the issue in detail with both the chief medical officer and the medical director for NHS England. The point to note is, first, that this is something that has happened internationally. It cannot be ascribed just to one issue, as is so often the case. Some of the excess mortality will be due directly to covid, albeit that that will be a diminishing proportion, and some of the non-covid excess mortality will also be driven by quite a wide combination of factors, so we have to be cautious when those sorts of numbers are bandied around.

[Amanda Milling (Cannock Chase) (Con)]

I have recently had alarming reports from constituents who have had to wait for more than 20 hours for an ambulance, so will my right hon. Friend set out in further detail how the measures outlined today will also support ambulances to reach patients more quickly?

[Steve Barclay]

The measures announced today speak to the heart of that issue: by putting in more capacity to decompress emergency departments, we allow, in particular, more same-day emergency care, where patients can be rapidly assessed, diagnosed and treated without being admitted to a ward. By unblocking capacity on wards, we enable emergency departments to release patients, which in turn creates the capacity for ambulances to hand over patients. The delay in handovers from ambulances is caused where the emergency department is already at capacity and there is an understandable reluctance from clinicians for additional patients to come in. Freeing up capacity within the emergency department is therefore about the operation of same-day emergency care at the front door of the hospital as well as what is happening at the back door with delayed discharge.

[Paula Barker (Liverpool, Wavertree) (Lab)]

The Secretary of State has said that the Government will now block-book residential homes for hospital discharges, but social care is in crisis and has been for many, many years. Care workers are leaving the profession in droves, because of low pay and poor conditions. To prevent care workers from leaving to work for supermarkets or Amazon, what will he do to recognise their incredibly highly skilled work and pay them what they deserve? Unless we retain existing staff, the international recruitment drive is meaningless.

[Steve Barclay]

We need to both maximise international recruitment and retain existing staff. That is why the Chancellor, in the autumn statement, with all the other competing pressures that he faced, prioritised putting £7.5 billion into social care over the next two years—the biggest ever increase, under any Government. Alongside the announcement of a further £6.6 billion investment in the NHS over the next two years, that was about recognising the centrality of social care in the wider pressures on the NHS.

[Mark Pawsey (Rugby) (Con)]

Does the Secretary of State agree that many of those who will need to be admitted to hospital in the coming weeks will have reason to welcome the fact that this Government, unlike the Labour party, do not have a prejudice against making use of facilities from within the independent sector?

[Steve Barclay]

I agree; I think that it is important that we maximise capacity in the independent sector. That is what we are committed to doing, and I very much agree with my hon. Friend.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

Over recent years, I have received sporadic correspondence from consultants based in my constituency complaining about the tax liabilities that they face as a result of their pension contributions, which force them to reduce their hours or to leave public health altogether. I understand that the Government are consulting on this issue and that this is probably a matter for the Treasury, but how close does the Secretary of State think we are to an innovative solution?

[Steve Barclay]

The hon. Gentleman mentions a matter that is raised with him. As he can imagine, it is also raised with me by many senior clinicians. He is right that it is a question for the Chancellor, because, as he knows, tax is a Treasury matter. I am happy to share that point though, as I know that it is under consideration by my right hon. Friend the Chancellor.

[Jack Brereton (Stoke-on-Trent South) (Con)]

As the Secretary of State knows, there are serious pressures within the NHS in North Staffordshire. The chief executive of the Royal Stoke University Hospital said on Radio Stoke last week that the key issue to addressing these pressures is dealing with social care. Will my right hon. Friend assure me that the measures will deliver more social care places across North Staffordshire?

[Steve Barclay]

I am very happy to give that assurance to my hon. Friend, but it is important to see the measures in the context of the autumn statement and the announcements that were made earlier by the Government around integrating health and social care through the integrated care boards. That will not only provide additional funding, but improve significantly the data, which will address some of our interface challenges in relation to those patients who are medically fit to be discharged from hospital, so that we can better ensure that the different pathways—whether it be domiciliary care, intermediate care or residential care, pathways one, two and three—are operating in a better way.

[Janet Daby (Lewisham East) (Lab)]

During this winter period, my constituents took their two-year-old child with severe breathing difficulties to A&E. It soon became apparent that the child needed to be hospitalised, but no beds were made available. After some 34 hours spent in A&E, a bed was found. I am sure that hon. Members from across the House can imagine how scary and exhausting that experience was for the whole family. Does the Minister view this experience as acceptable, and is this the new norm that the public should now expect from our national health service under a Conservative Government?

[Steve Barclay]

I recognised the hon. Lady’s second point at the start of my statement. On the wider point around those specific very troubling cases, one purpose behind integrated care systems having control centres is to get much earlier sight of the issues and much clearer escalation, with the result that these issues will get more scrutiny than is currently the case.

[Rob Butler (Aylesbury) (Con)]

In addition to the substantial increase in the number of cases of flu that my right hon. Friend mentioned, the intense cold snap shortly before Christmas put further unforeseeable pressure on hospitals. Stoke Mandeville Hospital in my own constituency saw four times as many broken hips as it normally would in that period, so I pay tribute to all the staff at Buckinghamshire Healthcare NHS Trust for treating those additional patients. I warmly welcome the Health and Social Care Secretary’s announcement on freeing up thousands of beds. Does he agree that putting a real, great focus on intermediate care and intermediate step-down beds is key, so it will be very important for integrated care boards, including the one covering Buckinghamshire, to put an intense concentration on that and on working constructively and effectively with the local authority and the local NHS trust?

[Mr Deputy Speaker (Sir Roger Gale)]

I call Clive Efford—

[Steve Barclay]

My hon. Friend raises an extremely important point, which is the role of step-down care in freeing up capacity in hospital. I was keen to emphasise, in my opening remarks, the right wrap-around support and care for patients when they are discharged from hospital. Over the next few weeks, it will not simply be a question of discharging those patients; there needs to be the wrap-around care as well. He is also right to point to the fact that there have been significant increases in demand—the fourfold increase that he highlights—which, combined with flu, covid and the pandemic legacy, resulted in very significant pressures. That demand pressure combined with an impact on supply—for example, from flu—also exacerbated staff absences during the Christmas period.

[Mr Deputy Speaker]

My apologies to the Secretary of State. I now call Clive Efford.

[Clive Efford (Eltham) (Lab)]

Thank you, Mr Deputy Speaker; I was as enthusiastic to make a contribution as you were for me to make it. What contingency did the Secretary of State put in place for a spike in flu cases? He speaks as if it took the Department by surprise, but it was widely predicted that there would be a spike in flu cases following on from the lockdowns during covid. He has announced 4,500 places to ease pressure, but in his statement he said that in 2020 there were just 6,000 cases of delayed discharge per day—“just” 6,000, as if that is not significant—whereas last year it was between 12,000 and 13,000 cases per day. What he has announced is roughly one third of what he said was the average per day for the last year. Is this not just too little, too late?

[Steve Barclay]

First, the central announcement at the autumn statement was the additional capacity to deal with domiciliary care and further support for social care. That £500 million announcement was part of the £2.8 billion next year and the £4.7 billion the year after. The autumn statement recognised the fact—I would have to go back and check the transcript, but there were many comments around that period pointing to it—that this was likely to be the worst-ever winter because of the combination of pandemic pressure, covid admissions and the risk of flu, which has transpired to be the worst for 10 years. That is why, for example, we expanded the cohort eligible for the flu and covid vaccine to the over-50s and invested in the bivalent vaccine. It is why NHS England put in place an additional 7,000 beds. It is why we have been rolling out virtual wards of the sort used at Watford General Hospital, which is able to address the equivalent of an extra ward. Additional measures have been taken but, over the Christmas period, in line with what happened in Wales, in Scotland and internationally, we saw a rapid spike in flu, with a sevenfold increase in cases over a short period, on top of the pressures already in the system.

[Ruth Edwards (Rushcliffe) (Con)]

I welcome the Secretary of State’s statement and the new funding announced. In Nottinghamshire, the Nottingham University Hospitals NHS trust had to declare a critical incident between 29 December and 6 January. It needs this new funding to help to discharge more patients now. Can the Secretary of State confirm when the money will arrive and start making a difference to my constituents in Nottinghamshire, and what his Department is doing not only to attract new people to work in social care, but to try to win back some of those who have recently left?

[Steve Barclay]

To address my hon. Friend’s two points, first, the NHS will take immediate action to start arranging additional step-down care; that is a clear message that she can take to her constituents to show that the Government have listened and acted on the very real pressures we have seen. On the wider social care system, an example from Hull—the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) is not in her place now—is the Jean Bishop Integrated Care Centre, which co-locates social care and NHS staff. The feedback I received from those staff was that that integrated model is extremely rewarding for staff and a much better way of operating than working in silos. The workforce themselves have said that that co-location and greater integration between social care and health is extremely beneficial.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Patients living with cancer, their families and the outstanding cancer workforce will be staggered—as am I—that we have just had a statement on NHS pressures that put forward no serious plan to tackle the deadly cancer backlog. Some 17,000 cancer patients in the last three months have had their targets for cancer treatment delayed or missed; 43% of people diagnosed with cancer in south Cumbria waited more than two months for their first lifesaving treatment, and in north Cumbria that figure was 63%. Where is the urgent plan to tackle the cancer backlog? On a practical, cross-party level, will the Secretary of State or one of his Ministers attend the all-party parliamentary group for radiotherapy’s inquiry on 18 January, so that we can work together to come up with some quick technical solutions that will save lives?

[Steve Barclay]

It is worth pointing out to the House that 92% of new patients are starting their cancer treatment within four weeks. On the substance of the hon. Gentleman’s point, however, we are rolling out the programme of community diagnostic centres and the surgical hubs programme precisely in order to prioritise cancer treatments. Also, given that it was a central part of the statement, it is rather surprising that the major investment in bringing out the potential of world-leading cancer vaccines from our life sciences strategy, which could be absolutely transformational for cancer patients, was not even referred to by the hon. Gentleman. I hope that he supports it, because it has the potential to be game-changing.

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

The Secretary of State is absolutely right: nothing about this situation is unique to the UK. There have been record delays at Canadian hospitals, Canadian emergency rooms have been closed because of staff shortages, and some Canadian citizens have had no ambulance cover at certain times, so the role of paramedics has been expanded there to enable them to do more diagnostics and to prescribe.

As somebody who works in this service, I say that it is not just about the delays in getting into hospitals; the demand on the ambulance service is equally driven by the fact that we have more people living for longer with more conditions that sometimes require care at 1 or 2 in the morning, and the only NHS service that will turn up is the ambulance service. What is my right hon. Friend’s vision for the future of community paramedicine? How can we expand paramedic roles, employ more advanced paramedics and, of course, put the proper resources into that service?

[Steve Barclay]

My hon. Friend raises a brilliant point—one that I completely agree with—about how we upskill the existing workforce and get more people operating at what is referred to as the top of their licence. One of the key areas in the discussions we had at No. 10 on Saturday was how we can better utilise the existing workforce and their roles, and what regulatory changes we need to maximise that.

I pay tribute to my hon. Friend for the work that he did over the Christmas period as a community first responder. He is absolutely right: looking at how we better integrate the data available to paramedics, for example, and therefore enabling them to do more, is exactly the direction of travel that we want to take. I look forward to discussing that further with him.

[Kerry McCarthy (Bristol East) (Lab)]

Last month, I asked the Prime Minister about a constituent with dementia who waited three hours for an ambulance and then spent 10 hours in the back of the ambulance in the car park at A&E. We have heard much worse examples today. I have now been contacted by another constituent, who went into cardiac arrest at his GP’s surgery. He waited two hours for an ambulance, and the GP eventually ended up driving him to hospital and probably saved his life. Can the Secretary of State give us some confidence that everything he is talking about today will filter through quickly to ambulance response times? At the moment, my constituents are terrified that if they call for an ambulance, it will not come.

[Steve Barclay]

Looking at the media coverage, the hon. Lady raises a very fair challenge. To give her a sense of what underscores our approach, 15 trusts are responsible for 56% of ambulance handover delays, so the targeting of additional capacity—particularly how we target what we have announced on the areas where delays are most acute—is obviously one of the central things that we are doing at pace, and there is a significant concentration of that.

There are also opportunities to look at the variation in performance and what is working effectively in other trusts. That combination of control centres and better upstream demand management is absolutely core, particularly for cohorts such as dementia patients. There are significant opportunities to target interventions better—NHS England has been doing a lot of work on that as part of its 100-day sprint exercise—but we can do more and the funding announced today speaks to that.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

I put on the record my thanks to the incredible staff at the Royal Stoke University Hospital and the Haywood walk-in centre, who have faced unprecedented pressures. Tracy Bullock and Neil Carr deserve our full respect.

We have two problems in Staffordshire. One is that community first responders do not have blue-light ability, which was taken away by the West Midlands Ambulance Service. When will it be reinstated? The second is that community pharmacies can do more—I am delighted that we will see them do more—but their core funding needs to be increased, which it has not been since 2014. How will that be rectified?

[Steve Barclay]

On the blue-light ability, I am very happy to take that away and look at it. As is often the case, these things are slightly more nuanced, as I discovered when we were looking at Ministry of Defence ambulance drivers and their interaction with blue lights. I am very happy to look at that.

The Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Harborough (Neil O’Brien), is looking at community pharmacy and, in particular, how we better enable patients to get the right treatment in the right place. Given that community pharmacies are accessible and sometimes get higher numbers in more deprived communities, there are significant opportunities for us to do more with them, and I know that that is something the ministerial team is working on.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I listened with some incredulity to the Secretary of State’s explanation—that because the integrated care boards are only six months old they are still getting to grips with the link between health and social care. Who does he think was running health and social care before the ICBs were created? It was the very same people, who know exactly what the issues are; what they are lacking is a Government committed to dealing with the systemic issues facing both sectors.

As we have heard, one of those issues is workforce and social care. A quick internet search reveals that there are 200 social care vacancies within a 10-mile radius of Ellesmere Port; we have heard already that there are 165,000 social care vacancies nationwide. I have not heard anything from the Secretary of State today about what he is actually going to do to address those vacancies. In a year’s time, how many social care vacancies does he expect there to be across the country?

[Steve Barclay]

On the interaction between vacancies and workforce, NHS England is working on a workforce strategy, as has been said, and we will say more on that shortly.

In his wider point, the hon. Gentleman is ignoring examples such as the Jean Bishop Integrated Care Centre—the ability to bring health sector and social care staff to work together in a more integrated way. Yes, the integrated care boards were operational from July. That is a factual statement; I am slightly mystified about why he thinks that was in some way an unusual observation to make. It is just the factual position. The point is that when one looks at the issue, one sees opportunities, particularly around how the data are better integrated, to understand where the workforce pressures and bed capacity are.

One of the causes of delayed discharge is about the interfaces as well as what is domiciliary care, what is step down and what is residential. There are a number of issues. By bringing them together in more integrated way, integrated care boards will be one of the ways we improve the situation. Indeed, that is what the hon. Gentleman’s former colleague Patricia Hewitt is looking at through the Hewitt review.

[Mr Peter Bone (Wellingborough) (Con)]

I am grateful to the Secretary of State for getting to grips with delayed discharges. As he will know, only a third of such discharges are in social care; most are down to the fact that there needs to be an NHS medical discharge.

I have some good news for the Secretary of State. The bad news is that Spinneyfields in my constituency, a 51-bed social care step-down facility, is going to be closed. If the Secretary of State spent a small proportion of the £250 million, the NHS could take over Spinneyfields and tomorrow 51 beds would be released at the acute hospitals in Northampton and Kettering. Will he agree to that now?

[Steve Barclay]

One of the things that my hon. Friend agrees with is that more decisions should be devolved rather than every decision being made in Westminster. Part of the reason for integrated care boards is so that they can look at where best to allocate their funds locally. He raises an extremely important point. He is right that around a quarter of delayed discharges are on the social care side—a fifth actually, in the NHS; there are a number of factors within that, which we will need to disaggregate.

On my hon. Friend’s point about local capacity, the Government are allocating the funding to his local ICB. I am sure he will have a conversation with his ICB on where the spare capacity can be best identified and rolled out at pace.

[Mr Toby Perkins (Chesterfield) (Lab)]

Last week, I met Hal Spencer, the chief executive of Chesterfield Royal Hospital; the pressures that he and his staff had faced as the hospital went into a critical incident over Christmas were etched all over his face. He spoke about the pressures on A&E registrars, ambulance drivers and nurses and about coming face to face with people who had been waiting 24 hours in a corridor on a trolley or who had been waiting many hours for an ambulance to turn up.

Is not the reality that this is a system-wide failure 13 years in the making? Did the right hon. Member for Gainsborough (Sir Edward Leigh) not hit the nail on the head in saying that Labour has a long-term plan for our NHS and this Government do not?

[Steve Barclay]

On the hon. Gentleman’s first point, this is absolutely a system-wide challenge. That is why the use of innovations such as virtual wards in demand management upstream, in the care home or on the home, is important, just as discharge—getting patients to leave hospital who are fit to do so—is important. The focus has often been on ambulances being delayed at A&E or on the significant and real pressures in emergency departments themselves, but the challenge is much wider. That is what the funding in the autumn statement recognised.

In response to his second point about this being a longer-term issue in England specifically, I would just point him to the examples in Wales and the pressures in Scotland. This surge in flu combined with covid and the pandemic legacy that we have seen in England have created so much pressure over the festive period, and it is something with which many other health systems around the globe have also been grappling.

[Anna Firth (Southend West) (Con)]

I very much welcome this extra funding, and I look forward to hearing how much will be coming to Southend University Hospital, which has had to deal with not one but two critical incidents declared by the East of England Ambulance Service NHS Trust. It has already innovated with modular units and an active discharge lounge. These NHS workers deserve all our recognition, and what they need is £8 million of capital funding to reconfigure the hospital, which is fundamentally not big enough. In the short term, will the Secretary of State agree to encouraging care homes to take discharges after 5 pm? Every day, 15% of the people who need to be discharged cannot be discharged because the care homes will not take them after 5 pm. That is at least 70 people a week who could be out of hospital. This is an emergency—everyone must put their shoulder to the wheel.

[Steve Barclay]

My hon. Friend has raised the £8 million capital request with me previously, and it is something we are looking at. She is right about how capital needs to be looked at in the context of getting flow into a local system and of where triaging can be unlocked. In response to her point about 5 pm, there are two points. First, part of the reason for looking at discharge lounges is that if we have something that is 7 am to 7 pm, there is a cultural change for the patient in going into the discharge lounge in the morning and being off the ward. Looking at other health systems around the world, we see that that can be beneficial in accelerating discharge, rather than there being a point in the day after which suddenly it is easier to leave discharging the patient until the next day.

The second point on 5 pm is that we need to look at what support care homes need to have the confidence to take the patient. To be fair to them, it is not simply a question of whether they are refusing to take the patient after 5 pm; it is also about us looking at the wider wraparound care package, so that care homes are confident in taking that risk not just after 5 pm on weekdays, but at weekends, when there is often a significant drop in the number of patients taken.

[Helen Morgan (North Shropshire) (LD)]

One of the key issues in Shropshire is a shortage of staff across every discipline and at every level. It is one of the reasons for the horrifying ambulance wait times that I raised in this place on my first day, 5 January 2022—this is not a new issue for 2023. What is the Minister’s plan to improve staff retention, because staff recruitment on its own will not plug this gap? It has not plugged it in Shropshire, and there are no signs of it plugging the gap across the rest of the country either.

[Steve Barclay]

We are expanding staff numbers—that is why there are 3% more doctors and 2% more nurses than last year—but it is about more than simply looking at that. We also need to look at the fact that we have more elderly patients, who are presenting with multiple conditions, which in turn changes the demands from a system that has traditionally been more about individual specialties. Now we are looking at treating those patients with multiple conditions, and that then needs to be factored into the skills the workforce have. That is why the point from my hon. Friend the Member for Brigg and Goole (Andrew Percy) is so important. We need to think about what upskilling can be offered to particular roles and how they can take on a wider set of responsibilities. There is also the role of technology in that. For example, many nurses in hospitals currently take time looking for beds. Operational control centres with a different cohort of staff, as is already the case in some hospitals, not only automate much of that process, which is far quicker in getting beds back into use, but free up a lot of nursing time to be used for what nurses would prefer to be doing, which is focusing on the clinical side and taken away from some of those administrative roles.

[James Wild (North West Norfolk) (Con)]

Norfolk and Waveney has already received £11 million to tackle discharges, which is making a difference. However, today there are 128 patients in the Queen Elizabeth Hospital in King’s Lynn who do not need to be there. This additional funding is welcome, but do these pressures not also underline to the Treasury the long-term importance of investing in modern hospitals that are able to meet demand and the case for including the QEH in the new hospitals programme?

[Steve Barclay]

My hon. Friend skilfully combines the importance of discharge at King’s Lynn with the importance of addressing RAAC—reinforced autoclaved aerated concrete—hospitals, on which he has campaigned assiduously. As he will know from my speech at the NHS Providers conference, it is an issue that I very much recognise. I have visited the hospital and seen the challenges at first hand; indeed, my son was born in that hospital, so I know it very well. We are discussing that issue with the Treasury and I hope to be in a position to update the House shortly.

[Richard Burgon (Leeds East) (Lab)]

We will not solve the NHS crisis without solving the NHS staffing crisis, which means sorting out pay. However, in talks with the unions today, the Government refused to make a new offer on pay. The unions say that the Secretary of State is ludicrously calling for—demanding—efficiency savings from nurses and other NHS staff. Many nurses and NHS staff are already working 18-hour shifts. When will the Government get real? When will the Government get serious? When will the Government make a proper offer to NHS staff to avoid strikes?

[Steve Barclay]

The hon. Gentleman seems to be quoting Onay Kasab, the lead national officer of Unite, who spoke to Sky News outside the Department of Health and Social Care just a few minutes after my discussions with the trade unions. The slightly odd thing was that Mr Kasab was not actually in the meeting on which he was commenting.

[Ben Bradley (Mansfield) (Con)]

It is pleasing to hear from across the House a focus on capacity in domiciliary care, which is a huge priority. Ultimately, that is where we want people to end up: independent in their own homes, as far as possible. I wonder if the Secretary of State could reassure me about some elements of the plan for the NHS to procure care beds. Where does he envisage staff coming from? If it is from the NHS, how will we ensure that more people do not leave domiciliary care for what are often better-paid roles in the NHS? In the same vein, on capacity, how will we ensure that people are able to move on from residential care beds into domiciliary care when there is that shortage of capacity?

[Steve Barclay]

As befits the leader of his own county council, my hon. Friend rightly recognises the importance of the integration of health and care. I have pointed to examples where that is already being done extremely effectively in an integrated way. As I recognised in my remarks, the medical director of NHS England has said that helping people to leave hospital with the right support when they are ready to do so is not just clinically the best option for those individuals, but one of the safest options for expanding capacity for everyone who needs care. It is the right thing to do clinically, but his point—one that we are extremely focused on—is about how we then ensure that wraparound service for patients who are released into residential care so that they can move into domiciliary care.

[Jim Shannon (Strangford) (DUP)]

I know that the Secretary of State appreciates that the winter pressures are only exacerbated by the looming strikes. I joined the picket line at Newtownards hospital back in early December. Just before Christmas, I had the opportunity to meet Pat Cullen, the leader of the nurses’ union at St Thomas’s Hospital, just across Westminster bridge, as the protest was ongoing, and we heard in the news that she referred to a glimmer of hope over today’s talks between the Government and nurses. Does the Secretary of State believe that there can be real engagement with not only nurses and midwives, but junior doctors, who are also threatening strikes? Does he agree that it is about not just a pay increase, but an increase in the numbers of staff to secure safety and accountability on shifts in hospitals tonight and every night from today on?

[Steve Barclay]

I agree that a combination of pay and wider conditions have an impact on recruitment and retention. That is why we have been keen to engage constructively with the trade unions; we had a good discussion earlier today. We recognise that there is a range of factors. To take the example of paramedics, the feedback from my discussions with a number of paramedics was that their frustration about handover times and the delays that they were experiencing was more important to them than pay. It is important to have discussions through the independent pay review bodies about pay, what is affordable and what is the right balance, but a range of non-pay factors are also extremely important to staff.

[Mr Philip Hollobone (Kettering) (Con)]

The biggest flu outbreak in 10 years has seen Kettering General Hospital become the 28th busiest hospital in the country, with a bed occupancy rate of 96.5% in the week leading up to the new year. The Secretary of State was kind enough to visit it last year and stood in the busy and overcrowded A&E. He was also good enough to visit Thorndale care home, where he was briefed on the fact that the rate of increase in the number of over-80s in Northamptonshire gives it one of the fastest-growing elderly populations in the country. In thanking the Secretary of State for the measures that he has outlined today and the extra funding, I ask whether he will ensure that Northamptonshire, North Northamptonshire Council, the Northamptonshire ICB and, crucially, Kettering General Hospital get their fair share of the funding that he has announced, so that we can tackle these winter pressures quickly and successfully?

[Steve Barclay]

My hon. Friend is right to point to the real pressures at Kettering which, as he says, I have visited. Not only am I keen to see it get its fair share, but I know that he will absolutely champion it through his good offices to ensure that that is the case, as he always does. He also raises an important point that the pressure of an ageing population is not universally distributed but is more intense in certain areas than others. Again, in our scrutiny of the data, I am keen to look at how that plays out in the variation in performance between trusts because, as I said, 15 trusts account for 56% of ambulance handover delays and there is significant variation across the NHS. Understanding what is driving that, such as different ageing profiles between different areas, is a key part of our recovery plans.

[Andy Carter (Warrington South) (Con)]

I spent Friday morning at Warrington Hospital to see the challenges that A&E department staff are facing. One senior clinician said to me that it was the busiest he had seen it in 30 years. The entire hospital was full—there were no beds—and last Monday, 90 people were waiting in A&E to be admitted to a bed. The Secretary of State knows that I am waiting for an announcement on whether a new hospital can be funded in Warrington, and I am keen to hear when that announcement will come, but can he reassure my constituents that the funding announced today will support the staff in Warrington Hospital and the social care staff in Warrington and ensure that the pressures that they are facing will be addressed immediately?

[Steve Barclay]

Yes, I can; that is the whole purpose of the announcement. Although my hon. Friend campaigns assiduously for the new hospital, he will concede that, regardless of the decision, that would take time. To his point about the hospital being full, there is an immediate challenge about how we get additional capacity into the emergency department so that it can operate more effectively, because if there are too many people, that impedes an emergency department’s ability to operate effectively. There is also a challenge about how we address the wider occupancy in the hospital as a whole, because that is at the core of getting flow into the system. That is the essence of the feedback that we have listened to and taken on board from the clinical community —as he did on Friday—particularly within emergency departments. Today’s announcement speaks to the exact issue that he raises.

[Mr Deputy Speaker (Sir Roger Gale)]

Finally, with the prize for patience, I call Shaun Bailey.

[Shaun Bailey (West Bromwich West) (Con)]

Thank you, Mr Deputy Speaker—I am last but I hope I am certainly not least. Some 700 beds are due to come online thanks to the Midland Metropolitan University Hospital and there is a new primary care centre in Wednesbury, so when my right hon. Friend’s Department delivers, we see the benefit. Clearly, however, that means nothing if we cannot get the processes right. The most pressing issue for my constituents during the winter has still been access to their GPs, as I am sure hon. Members on both sides of the House will agree. I welcome what he has said about the use of technology to ensure that people are seen, but fundamentally, people still want face-to-face appointments, because if they are digitally disconnected, they cannot access that technology. It is as simple as that. I ask him to commit—just after he commits to come to Wednesbury to see our new primary care centre—to work through his good offices with GP practices where there is best practice, particularly in the Black Country ICB, to ensure that we enable people who are digitally disconnected to access GPs.

[Steve Barclay]

We are working actively with the primary care community. Indeed, that was a key focus of the Prime Minister’s summit in No. 10 on Saturday and it is part of the work that the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Harborough (Neil O’Brien) is leading through the primary care recovery plan. Last year’s GP patient survey suggested that continuity of care and face-to-face appointments were extremely important for two fifths of patients, but that suggests that for three fifths—often younger patients—speed of access is more pertinent. Continuity of care is important for those with multiple conditions, particularly elderly patients.

Alongside that, my hon. Friend is right to raise the Midland Metropolitan University Hospital. Four years ago, when I visited as a Minister of State in the Department, it was near completion. As he knows, it has taken a significant amount of time since then to get to its opening, which is why we need to look at doing things differently when it comes to value for money. Looking at the hospital estate programme, nine of the last 10 hospitals were built over time and over spec, so we need to look at modular design, modern methods of construction, and standardisation, which deliver a 35% unit-on-unit reduction in cost and much quicker operational performance, and would enable us to get hospitals up and running earlier.

It is important to do things differently and the new hospital building programme is part of that. We have listened to the concerns of those on the frontline and today’s statement addresses the immediate issue of bed occupancy in hospitals and the pressure on emergency departments.

[Mr Deputy Speaker (Sir Roger Gale)]

My thanks to all hon. Members—Front Benchers and others—who have taken part in an important discussion.

Non-domestic Energy Support

Monday 9th January 2023 Commons Chamber

17:57

[The Exchequer Secretary to the Treasury (James Cartlidge)]

With permission, Mr Deputy Speaker, I will make a statement on how the Government are continuing to support businesses, charities and the public sector with their energy bills. Before I outline how we are helping businesses, I remind the House why we are in this position.

Although wholesale energy prices are now falling, some businesses are still exposed to higher energy bills after Putin’s illegal invasion of Ukraine pushed prices far above their historical averages. Putin’s military aggression has put households and businesses across Europe and beyond under serious financial pressure. For that reason, we have already provided a package of support for non-domestic users through this winter that is worth £18 billion, as per the figures certified by the Office for Budget Responsibility at the autumn statement.

The energy bill relief scheme gave a direct discount on energy costs for all eligible businesses. It lessened the shock of the immediate increase in prices; it gave businesses the certainty they needed to plan for the winter; and it is one of the most generous packages in Europe. It comes on top of our support for households, including the energy price guarantee worth £900 this winter according to the OBR, which further helped to support consumers and the businesses that rely on them. I remind hon. Members that that followed unprecedented business support during the pandemic.

The Government are proud to have helped businesses through a twin combination of unprecedented shocks that nobody could have expected a few years ago. We will always do what is necessary to keep the economy and the British people secure, which is why the Prime Minister has been clear that we will halve inflation this year to ease the cost of living and give people financial security before returning it to target. That is also why we unleashed the furlough scheme, which avoided 2 million forecast job losses; a groundbreaking vaccine roll-out, which saved lives and ensured the safe reopening of our economy; grants for pubs, shops and other retail businesses; and now, humanitarian and military aid to Ukraine as it fights for democracy, with the UK giving more than any other nation bar the US. All those steps have been right, but all have come at a significant combined cost, leaving our national debt standing at £2.48 trillion or 98.7% of GDP.

To secure the future of public services, we have committed to get national debt falling, including two new fiscal rules—that the UK’s national debt must fall as a share of GDP by the fifth year of a rolling five-year period, and that public sector borrowing in the same year must be below 3% of GDP.

As we look to the next steps in supporting businesses, it is therefore in our national economic interest that we chart a path to withdrawing such support and restoring fiscal sustainability, but in a sensible and fair way that strikes a balance between supporting businesses now and protecting taxpayers’ exposure to volatile energy markets. As my right hon. Friend the Chancellor said at the autumn statement, one of our key economic priorities is stability, and we cannot have stability without financial prudence. So all Members must recognise that there is a balance to be struck, and it is not sustainable for the Exchequer to continue to support large numbers of businesses at the current level.

No Government—no responsible, serious Government —anywhere in world can permanently shield businesses from this energy price shock, and we must cap the taxpayer’s exposure to volatile energy prices. We have also been clear throughout that such levels of support were time-limited and intended as a bridge to allow businesses to acclimatise. Firms need to adapt and invest in energy efficiency to remain viable, and as they do so, we will be at their side to help, including with £6 billion of additional investment to cut the UK’s overall energy use.

Yet we remain fully alive to the fact that businesses would be facing a cliff edge as support comes to an end. To avoid this, we are going to provide a further package of transitional support, so today I can confirm a new energy bills discount scheme for businesses, charities and the public sector. Up to £5.5 billion will be made available from the end of the energy bill relief scheme period on 31 March until 31 March 2024.

The Chancellor has been working with the key industry stakeholders to get this right. We heard that they needed a 12-month rather than six-month scheme. We have listened and, as a result, I confirm that we will be providing a year’s worth of support for all non-domestic bills beyond the current six-month scheme. This will give certainty and ongoing assistance to businesses locked into contracts signed before recent substantial falls in the wholesale price, and provide others with reassurance against the risk of prices rising again. It is different from the previous energy bill relief scheme, but provides long-term certainty for businesses and reflects how the scale of the challenge has changed since September last year.

From 1 April 2023 to 31 March 2024, non-domestic customers that have a contract with a licensed energy supplier will see a unit discount of up to £6.97 per megawatt-hour automatically applied to their gas bill and a unit discount of up to £19.61 per megawatt-hour applied to their electricity bill, except for those already benefiting from lower energy prices. This means a typical pub can expect a taxpayer-funded discount of up to £2,300 over 12 months and a typical small retail store will get up to £400 off its annual energy bill.

We also recognise that some businesses, especially intensive users such as major manufacturers, are highly exposed to both energy prices and international competition, which means they are unable to pass through or absorb all of these costs. I can therefore confirm that the Government are targeting a substantially higher level of support beyond April 2023 to energy and trade-intensive sectors, providing a major boost for the manufacturing sector. Businesses in scope will receive a gas and electricity bill discount based on a price threshold that will be capped by a maximum unit discount of £40 per megawatt-hour for gas and £89.10 per megawatt-hour for electricity. This discount will only apply to 70% of energy volumes. These firms will continue to be supported at source, based on a price threshold of £99 per megawatt-hour for gas and £185 per megawatt-hour for electricity. This means a typical medium-sized manufacturer would expect to receive nearly £700,000 of direct support over 12 months.

This comes on top of the £13.6 billion of support for firms with business rates over the next five years, a UK-wide £2.4 billion fuel duty cut this year and the protection from full corporation tax rises for businesses making profits of less than £250,000, with those making profits of less than £50,000—the vast majority—not facing any rate rise at all.

I have set out how this transitional support will reduce overall as a cost to the Exchequer while remaining significant at a time of elevated energy costs and providing certainty for a further 12 months. However, I have also been clear that, just as we withdrew covid support when we moved to a position of living with the pandemic following the success of our vaccination efforts, this energy support is deliberately transitional in nature. That means that in due course we will move unambiguously to a point where there is no universal support for businesses with energy bills from the taxpayer.

Ultimately, it is in the national economic interest that we move to a position where the Government do not routinely subsidise UK businesses. It is not for the Government to habitually pay the bills of businesses any more than it is for the Government to tell businesses how to turn a profit, and it cannot be that the taxpayer props up failing or unproductive firms. Instead, we must protect the forces of free enterprise and entrepreneurialism that have led to our economic success for generations. [Interruption.] Labour Members do not understand free enterprise and entrepreneurialism, and I do not think many of them have ever run a business.

The approach I have outlined today does just that: it is fair in balancing the needs of non-household energy users with the need for prudence and a restoration of competitiveness, and it shows that this Government remain committed to supporting businesses, charities and the public sector through these challenging times. I commend this statement to the House.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the shadow Minister.

18:00

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

Thank you, Mr Deputy Speaker, and happy new year. I thank the Minister for advance sight of his statement.

Businesses have been crying out for some much-needed clarity. In September, the Government promised a review to look at targeted support, saying of the energy bills support scheme:

“We will publish a review…of the scheme in three months”.

I noticed the Minister made limited mention of this review. Could he tell the House where it is, who was consulted, what were the outcomes and whether it even took place? Many industries have suspected that the review was always intended as a delaying tactic. They have strung businesses along, playing for time, just like everything the Government do—living day to day and crisis to crisis, and hoping the blame does not land on them.

It is criminal that this sticking-plaster politics has forced British businesses into the same cycle, with firms unable to plan and not knowing what the next month will bring, let alone the next quarter. Business owners and their staff have faced two Christmases racked with worry because of covid and half-baked announcements from this Government, not forgetting the £6.5 billion of money recklessly squandered by this Tory Government. Firms were promised clarity last year, but Tory chaos meant that they spent another Christmas worrying about their energy bills. Will the Minister apologise today for the distress and uncertainty caused by the Government, not least for the hospitality sector during what should have been its most profitable trading period? What has been announced today is just a sticking plaster. What are the Government doing to ensure the take-up of energy efficiency measures for small businesses, and what plan does he have to deliver energy security and lower bills for the long term, or are businesses to be treated to this merry-go-round every winter?

The Minister spoke about support for energy-intensive industries. Can he confirm what businesses are in scope and how this will be implemented? Can I point out that Wade Ceramics in Stoke-on-Trent closed while the Government dithered and delayed over energy support? What does he have to say to those 140 workers? Our steel producers paid twice as much per megawatt-hour than German producers did last year. [Interruption.] Conservative Members do not want to hear this, but these are the facts. Reports from the Scunthorpe plant are deeply alarming, so can I take this opportunity to ask what steps his Government are taking to secure the future of the domestic steel industry? Will the Minister confirm today that he will commit to the long-term investment that steel needs to protect our manufacturing base and national security?

With delayed announcements, constantly changing plans and a Government living day to day, they are forcing industries to do the same. I agree that firms need to invest, but what steps have the Government taken to make this possible? There was no mention in the statement of support for businesses investing in green technology. The British Chambers of Commerce and Make UK are very clear that, rather than inspiring business confidence and investment, the Government’s policy decisions have reduced confidence.

It simply does not need to be like this. Labour would back British businesses and give them the certainty they need to plan and invest, scrap business rates with a fair tax on the online giants, have a long-term industrial strategy alongside which our industries can invest and, crucially, deal with the energy crisis at source.

For 13 years, Britain’s energy policy has been a perfect example of sticking-plaster politics. Of course the Government are not responsible for the effects of the war in Ukraine, but the truth is that it was not the war that banned onshore wind, scrapped the home insulation and shut our gas storage facility; the Tory Government did that. That is why we are so exposed as a country, and families and businesses are paying the price. Labour’s green prosperity plan will deliver green electricity by 2030, getting bills down, ending the cycle of Tory crisis; the choice is between proper energy security that benefits Britain and a real plan to back British business with Labour, or an out-of-touch Tory Government with no ideas.

[James Cartlidge]

I am grateful to the hon. Lady. She asked what happened to the review. Well, I am making a statement about the results of the review, and the policy decisions that we have come to a conclusion on, based on the review and consulting all the key stakeholders in business and industry and also the voluntary sector, who I spoke to only this week.

The hon. Lady used the word “criminal” to describe the announcement today. I think that is a little over the top. We are continuing to provide significant support for businesses. We have a universal scheme, plus the targeted support for energy and trade-intensive sectors, with significant expenditure of up to £5.5 billion. We must balance this, however. She talked about failing to support business, but I remind the House that at this precise moment we are in the middle of a six-month scheme worth £18 billion, which is an extraordinary sum.

The hon. Lady said that we have somehow betrayed hospitality. The last statement I made, the day before the House rose for the Christmas recess, was that we would be freezing alcohol duty for another six months. We have supported pubs throughout the pandemic. To a typical pub, this will be worth about £2,300 in support over the next 12 months. Beer duty is now at the lowest real-terms level for 30 years, having been cut or frozen in nine of the last 10 Budgets, and spirits duty is at the lowest level in real terms since 1918, and of course we have extended the discount on business rates for the hospitality sector—previously it was 50% and we are increasing it to 75%. So there is a huge amount of support for hospitality.

The hon. Lady called for energy security. I agree that the long-term answer to this problem is investment in energy security; it is about having robust British energy, and we should look at the figures on that. Only a few days ago we heard from the BBC that in 2022 we had a record level of wind production in this country producing electricity: almost 27%, with just 1.5% from coal compared with 43% from coal in 2013. No other country is making that sort of progress. I am proud as an East Anglian MP to say that offshore wind has made a massive contribution; we have the largest array of offshore wind in Europe. We are delivering energy security and, as the Chancellor said in his statement, we are going to keep doing it, investing in nuclear and putting other investment in place, backing contracts for difference.

I will make one final point. A few days ago the Leader of the Opposition said that it was no longer the time for the big Government cheque book and that we need to put the cheque book away. I am not sure that his Front-Bench Members have got the memo, because there is a balance to be struck here: we need fiscal prudence. The underlying problem for the country is inflation: inflation is the reason why people are experiencing cost of living problems. If we want to get a grip of inflation, we need to set a path for fiscal sustainability, because the problem with what the hon. Lady is suggesting is that it implies not just getting the Government cheque book out again, contrary to the words of the Leader of the Opposition, but getting a blank cheque book out. The problem with that is that if a Labour Government start writing blank cheques, we know where that ends up: with them writing a letter saying there is no money left, and bankrupting the country. We must balance prudence with supporting businesses and the voluntary and public sectors with their energy bills. We have done that today as a result of our review, and I believe this is the right balance of policy for the House.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

I welcome the Minister’s announcement. He rightly points out that President Putin has, by illegally invading Ukraine, effectively weaponised the cost of energy against western economies, and he is right to highlight that we have been able to withstand that attack with £18 billion of support over this six-month period.

We now have a gas price close to where it stood before the invasion of Ukraine, and businesses across the country have realised the big risk they face in terms of their energy costs. Will the Minister encourage them not to pass on the cost of higher energy through inflation to their customers, and instead call for the wholesale price of energy to feed through more swiftly to the retail price our businesses pay?

[James Cartlidge]

I think this is the first time I have taken a question from my hon. Friend since her appointment to the chairmanship of the Treasury Committee and I congratulate her belatedly on her success. She makes the good point that wholesale prices have fallen significantly. The gas price is back to where it was before the invasion. Of course, we should be clear that before the invasion it was still elevated in relative terms historically, not least because there was an increase in energy prices following the reopening of the economy after the pandemic. Of course, we do not want prices to be passed on to customers in terms of inflation—that is the last thing we want to see—but I should stress that one reason why we are giving extra support to energy and trade-intensive sectors is that, because they tend to trade internationally, they are particularly exposed to those price pressures and find it harder than other companies that are energy intensive but not trade exposed to pass on those high prices.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Scottish National party spokesman.

[Stewart Hosie (Dundee East) (SNP)]

Happy new year, Mr Deputy Speaker.

I thank the Minister for his statement and for early sight of it, although I suspect businesses will be as underwhelmed and disappointed by it as they were frustrated by the delay in making it. I am disappointed that the higher level of discount will be removed after March this year, which is less than three months away; it does not give businesses the time or opportunity to plan.

There is also a degree of sleight of hand. I do not think the public will buy the £5.5 billion budgeted between March 2023 and March 2024 being portrayed as a year’s worth of support given that, as the Minister said, the cost of the package for six months to March this year came in at £18 billion. To dress that up as fiscal prudence simply will not wash.

The key thing is that the Minister said that no Government anywhere in the world can permanently shield business from the energy price shock—that mirrors what the Chancellor said a few days ago—and he went on to say that levels of support were time limited and intended as a bridge to allow businesses to acclimatise. May we have an assurance, however, that if this turns out to be not a short-term price shock but a medium-term price problem, this package and the level of the discount will be reviewed before next winter so that we do not have businesses that manage to survive this year falling over next December, January or February because they cannot afford to heat or light or power their workshops?

[James Cartlidge]

There will have been 18 months of support for non-domestic accounts for businesses, charities and the public sector, in which time we have emphasised—I was very open about this—the need to adapt to the new environment we all face. Everyone is having to do that —households and businesses, and so on. In the autumn statement, the Government announced a new long-term commitment to drive improvements in energy efficiency and to bring down bills for households, businesses and the public sector, with an ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030 against 2021 levels. Alongside existing support to 2025, the Government committed an additional £6 billion from 2025 to 2028 for energy-efficiency schemes across households, businesses and the public sector.

On the right hon. Member’s point about the £5.5 billion, I do think that we need some perspective, as £5.5 billion is roughly the cost of a 1p cut in income tax. That remains a significant fiscal intervention. It may be that, because of the huge amount of support that has been needed by our country, particularly since the pandemic—we have seen £400 billion-worth of support, and potentially close to £100 billion on energy—a figure such as £5.5 billion does not look as large. Perhaps that is understandable, but, compared with any normal fiscal event, it remains a very significant intervention. As I have said, it could still be worth up to £2,300 for a pub next year and, in our energy and trade-intensive sectors, up to £700,000 for a typical medium-sized manufacturer. That remains very significant support.

[Sir Robert Buckland (South Swindon) (Con)]

I welcome my hon. Friend’s statement. He will understand that many businesses face the prospect of having to pay significant up-front costs to enter into new contracts, which is a real challenge for those in my constituency and elsewhere. What work will he do with Ofgem, the regulator, to ensure that such punitive contracts can be ended and businesses can operate on a much fairer basis?

[James Cartlidge]

My right hon. and learned Friend asks an excellent question. Through the review, we have heard of issues in and around the pricing and availability of non-domestic tariffs, including increased standing charges, prohibitive contract renewal terms such as those he referred to and, in some cases, decisions by individual suppliers to withdraw from supplying particular sectors. Ofgem and the Department for Business, Energy and Industrial Strategy are working urgently to understand those issues, and Ofgem is launching a deeper review of the market. I can confirm that today, the Chancellor has written to Ofgem, asking it to do that work with the utmost urgency and to update him in time for the Budget. The Government recognise the importance of that work to many pubs, restaurants and other businesses that feel they are not getting a fair deal from their suppliers.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the Business, Energy and Industrial Strategy Committee.

[Darren Jones (Bristol North West) (Lab)]

We know from the design of the domestic scheme that people in particular circumstances are not being helped as the Government perhaps intended. Will the Minister therefore confirm that the Government will tweak the design of this policy in the same way that they did the domestic scheme where there are legitimate cases of businesses not being helped as Ministers intended?

[James Cartlidge]

It is a good question. Obviously, there are quite a few of those categories. As the hon. Gentleman is the Chair of the Select Committee, I am happy to engage with him—I think we will be speaking later, if not tomorrow—and to go through some of those categories. There are some important examples, but I can certainly confirm that where those exceptions arise, we will look to see what we can do to provide assistance.

[Mr Philip Hollobone (Kettering) (Con)]

I welcome the extension of energy price support for non-domestic users. However, may I give my hon. Friend a real-world example of what is happening in the non-domestic sector? A popular local pub in the Kettering constituency emailed me this week. Up to 2 January, it was paying £2,000 a month for electricity. At the end of the contract, its supplier switched it to an out-of-contract tariff of £9,700 a month. The pub went out to the market and, reluctantly, had to agree to a cost of £5,700 a month with another supplier. Surely that is blatant profiteering when one company can offer a price £4,000 a month less than a competitor’s quote. I therefore welcome what he said about getting Ofgem involved as quickly as possible to sort out these rogue suppliers.

[James Cartlidge]

I pay tribute to my hon. Friend for being an absolute champion for his constituency. I know that he had a question on hospitals earlier and now he is championing his pubs. We all know how important pubs are to all of our constituencies. I will make two points.

First, in response to my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) I referred to the letter that the Chancellor is sending today to Ofgem, urging it to update him as a matter of urgency on its review of the non-commercial market. Hopefully, that will look at some of the factors around how contracts operate and, indeed, at whether there are abuses and what can be done about it.

Secondly, one of the reasons we are maintaining universal support is precisely because there will be examples, such as the one my hon. Friend raised, of those who came to the end of a deal and fixed when prices were high, and so will not have benefited, even though prices are falling. This support is there to prevent that sharp cliff edge. It is about getting the balance right.

[Kerry McCarthy (Bristol East) (Lab)]

The Christmas period should be a boom time for hospitality companies; sadly, in Bristol we saw quite a number go under, and energy bills were a huge reason for that. The Newtown Park Brewing Co. was forced to stop production—a 500% increase in its energy bill quote was the final straw. It was not helped by the fact that, when it tried to speak to its energy company about what support was available, its energy company did not know. It said, “We would tell you if we did know, but we have no idea what we can offer you.” Will the Minister ensure that, with packages going forward, everybody is in the know, the details are communicated and there is enforcement so that people get the help that they are entitled to?

[James Cartlidge]

The hon. Lady asks a pertinent question. I will make a point about hospitality this Christmas. Of course, a particular factor facing hospitality was that people could not get around on our railways to enjoy hospitality at Christmas as they normally would. We all know the reasons for that. It is a great disappointment to me that that industrial action has threatened many otherwise viable businesses up and down the country. However, her question was perfectly fair. Payments should be automatic. I obviously do not know the exact circumstances of, I think, the pub—

[Kerry McCarthy]

Brewery.

[James Cartlidge]

Sorry, the brewery that she was talking about. Assuming that it is still going, it would benefit from the scheme; I hope that it can. On whether it would benefit from the universal scheme or the intensive scheme, it would likely be the universal one. If colleagues want to find out whether a particular sector is in the intensive scheme, that information should now be available on gov.uk.

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

I take no lectures from the Opposition on support for the steel industry: not only did they preside over the loss of thousands of steel jobs, but they have supported policies that have put costs on our industry and flirted with climate extremists who would close down the steelworks in Scunthorpe if they had their way.

I thank the Minister for the support for intensive industries such as steel. However, we are not operating on a level playing field across Europe, as other Governments continue to subsidise their steel industries unfairly against ours. Will he therefore continue the engagement taking place at a senior level between the steel industry and Government to look at what other support can continue into the future?

[James Cartlidge]

My hon. Friend is a stalwart champion of the steel sector, which I know is so important to him and his constituents. I absolutely agree with him. Of course, we are aware of the differing levels of support. In fact, with schemes such as this, it is difficult to make a comparison internationally because of the variations. On the additional discounted support for energy and trade-intensive industries that we have announced today, international comparators were a factor in considering the greater generosity of that support. Obviously, in the long term, what we need is secure energy supplies so that we can have choice and secure energy. That is the most important thing in the long run, but across Government we want to see what we can do to support the steel sector.

[Dame Nia Griffith (Llanelli) (Lab)]

In the long term, we need to reduce the reliance of energy-intensive industries such as steel on fossil fuels, and for that we need further investment in innovation. On 17 November, the Chancellor committed to write to me about whether the Government would earmark the £200 million contributed by steel producers and now returned to the UK Government from the EU research fund for coal and steel to set up a UK steel innovation fund. Will the Minister now tell me what the Government’s policy is and when I can expect that letter?

[James Cartlidge]

I am not aware of what has happened to the letter or where it is, but I am more than happy to look into that as a matter of urgency and to ask my officials to chase it up. We will write to the hon. Lady as soon as we can.

[Sir John Whittingdale (Maldon) (Con)]

While I agree with my hon. Friend that support cannot continue indefinitely, I welcome his recognition that high energy users will continue to require special help. Will that support cover agricultural businesses that are high energy users such as Dengie Crops in my constituency, which uses gas to dry crops to produce animal feed?

[James Cartlidge]

My right hon. Friend asks an important question. Like him, as an MP representing an East Anglian arable constituency, I am aware of the importance of such businesses to the wider agricultural sector. As I said to the hon. Member for Bristol East (Kerry McCarthy), we will be publishing a list on gov.uk showing those energy and trade-intensive industries that are eligible for the higher level of support; I refer him to that. I am also happy to write to him to confirm it exactly, because within one sector there will be a range of different types of industry that may qualify.

[Sarah Olney (Richmond Park) (LD)]

At the end of October, I had a meeting with a number of publicans in my constituency. They were looking forward to strong demand during the World cup and over Christmas, but they were deeply, deeply concerned about what would happen between January and March in particular. They were desperate for clarity on support for fuel bills. The fuel bills issue is the biggest issue they are experiencing, although it sits alongside other pressures such as staff shortages, supply chains and so on. What consultation did the Treasury have with UKHospitality and other bodies before making today’s statement and the new policy on fuel bills? What discussions did it have with UKHospitality about other potential forms of support for the sector as it comes through the crucial first quarter of 2023, which will be so challenging?

[James Cartlidge]

All I can say is that I suspect pubs did get a boost from the World cup. I wish it had run for longer, but I am afraid that is beyond my control. We very much enjoyed the tournament none the less. I understand the challenges facing hospitality. In my statement on our last but one sitting day of 2022, I announced the six-month extension of the freeze on alcohol duty. This has been a particularly challenging time for pubs. As the hon. Lady knows, we are in the middle of the £18 billion EBRS support, which has helped pubs in particular. We have been clear that we have continued what is effectively a universal scheme, notwithstanding the specific extra support for the energy and trade-intensive sectors. UKHospitality has been included in that consultation. That has happened at an official level, but also through the Chancellor and me, with the voluntary sector and others. We continue to engage very closely with UKHospitality through our Department, the Department for Business, Energy and Industrial Strategy and others on those matters.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I, too, welcome the Government’s announcement. It is really important that we avoid the cliff edge. Speaking to businesses across Aldridge-Brownhills, whether they are part of the energy-intensive sector, retailers, hospitality or even funeral directors, they are all deeply impacted by the energy costs. Can the Minister provide any more clarity or confirmation on whether all business sectors will be covered by today’s policy announcement?

[James Cartlidge]

My right hon. Friend makes a very good point about how broad the impact is of rising energy bills. She used the phrase “cliff edge”. That is precisely why we have continued with a universal scheme. Yes, I am happy to confirm that there will be support for every single business, charity and institute in our public sector, but there will be additional support if they are in the energy and trade-intensive sector. The reason for that is the exposure to internationally competitive pressures and how much harder it is for them to pass on those prices. We recognise the energy challenges for small and medium-sized enterprises in every single sector. We are doing what we can, but balancing that against the need for fiscal prudence.

[Nick Smith (Blaenau Gwent) (Lab)]

On possibly tweaking the scheme, last week I visited a housing scheme for older people in Blaenau, where constituents with private pensions were complaining of increased energy costs of 400%, or £50 a week, just for heating the common social areas. The housing association complained that none of the Government’s energy schemes is of help to the organisation, so it had to pass on the costs. Will the Minister please meet me to hear those important concerns?

[James Cartlidge]

The hon. Gentleman raises a very important point. I would have to know the exact details, but, yes, I am more than happy to meet him. He will be aware that the care home could benefit from EBRS, which will become the eligible discount scheme after March, but I stress that there are 900,000 in England, Scotland and Wales without a direct relationship with an energy supplier, such as care home and park home residents. This month they will be able to apply online for £400 of non-repayable help with their fuel bills.

[Greg Smith (Buckingham) (Con)]

I very much welcome the package of support announced this afternoon and the enormity of the total support package, but may I push my hon. Friend a little on what is energy intensive? Padbury Meats, a butcher in my constituency, wrote to me over the weekend. It is a healthy business with a huge gross income per annum, it employs six staff and has no borrowings. Thanks to careful decisions, it managed to buy a freehold and therefore pays no rent, but it has seen a fourfold increase in its energy bills since the invasion of Ukraine and is not making a profit. The owner is personally subsidising the business through their own savings, which is not sustainable. Instead of looking at specific energy-intensive industries, will he look at the proportionality of energy bills to total revenue to determine which businesses, such as butchers who have huge fridges and walk-in freezers, need support?

[James Cartlidge]

My hon. Friend makes an important point. The first part of my answer may disappoint him, but I want to be clear. The additional support, particularly for manufacturing, is not just about energy intensity but trade intensity. There are two measures that determine if sectors are entitled to support: whether they are above the 80th percentile for energy intensity and the 60th percentile for trade intensity. So, it may be that the sector does not fit in that category. But that is why—I appreciate the support is less generous, but it is still significant—alongside the additional support for the intensive users, there will still be a universal scheme offering a discount from April this year to March next year.

[Joanna Cherry (Edinburgh South West) (SNP)]

A much-loved institution in my constituency, Gorgie city farm, is facing closure. Its energy bills for 18 months were previously £17,000, but its last bill for just eight months was £27,000—an increase of over 300%. Can the Minister not see that what he is offering is a drop in the ocean for charities like Gorgie city farm? How does he expect fantastic community institutions, such as the city farm in my constituency, to survive crippling costs when what is on offer is such a drastically reduced package?

[James Cartlidge]

I am grateful to the hon. and learned Lady for mentioning the charity in her constituency. As I said, I appreciate that the energy increase has been a challenge for every type of SME, charity and institution up and down the country. I am sorry to hear about the challenges for Gorgie city farm, which I have not had the pleasure of visiting but it sounds fascinating. Charities have shown huge resilience over the past two years and will continue to receive support with their energy bills from the latest iteration of the discount scheme. I emphasise that there is wider support to help them with their costs, including a reduction in VAT from 20% to 5% and an exclusion from the main rates of the climate change levy on some of the energy they use. The key point is that we are announcing a scheme that is still universal in nature and still includes charities. It is not as generous as before, but when we engaged with stakeholders about the £18 billion six-month scheme, what was interesting was the number of them who remarked that they had not expected that scheme to continue at that level of generosity. They could see the issue about sustainability for the taxpayer, which we all have to understand and address. It is in all our interests, and in the interests of every single business and charity, that this country has sustainable public finances.

[Sir Desmond Swayne (New Forest West) (Con)]

Has any analysis been made available to Ministers regarding the movements in wholesale prices and the tariffs actually being offered to customers going forward?

[James Cartlidge]

It is very timely that my right hon. Friend raises that point. He will have heard me mention to the former Lord Chancellor, my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), that the Chancellor has today written to Ofgem to encourage it to update him as soon as possible and as a matter of urgency about the review of the non-domestic market, because we are hearing about many issues with it. A key point I will be feeding back is that colleagues on all sides of the House have experienced cases in their constituencies relating to deposits being asked for, deals being rejected and what will happen at the end of fixed rates. There is clearly work to be done and that is why the Chancellor has written as he has. I will ensure the letter is published on gov.uk along with the other documents.

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

Businesses small and large in my constituency, from shops to my local steel plant, have raised very serious concerns with me, so they will no doubt look at the statement very, very closely. I have one group of constituents who have lost out on any support so far. The Minister mentioned the energy bills support scheme alternative fund. I have residents in an apartment block in Sully who have not yet received any support at all because they fall into that category. When will the website portal be open? Will they receive backpay? Why will they get only £400 of support, instead of £600 like everybody else? The Government website says it is because the overall block may have benefited from business support schemes, but if they believe that not to be the case—it has not been passed on or the apartment has not been eligible for one of those schemes—how will they get what they need? They are really struggling at the moment and they have not had any answers from the Government so far.

[James Cartlidge]

I totally understand the hon. Gentleman’s point. There are issues with people in apartment blocks in certain specific cases; I do not want to second-guess the case that he raises, because there are lots of different schemes. A £600 payment is going out in Northern Ireland: the £400 general support payment that everyone will have had this winter will be paid out together with the alternative fuel payment, because so many people in Northern Ireland use heating oil, whereas in this country it is less common except in rural areas and constituencies like mine.

The hon. Gentleman is absolutely right that there is a category of user who has not yet received the £400. They may be on a contract under which the energy provider is benefiting from the current EBRS and should be passing that benefit on. I am happy for the hon. Gentleman to write to me with details of his case. As for the website, we have said that the relevant link should be available this month so that people can go online and find it. If he writes to me with the details, I will push my officials on when we can expect it to be live so that his constituents can apply for the £400. He makes a good point.

[Theresa Villiers (Chipping Barnet) (Con)]

I really welcome the fact that businesses in my constituency will get another 12 months of support, but none of us can be in any doubt that the global energy price shock will continue to make circumstances extremely difficult for many businesses across the country. May I urge the Minister to put relentless focus on energy efficiency, which gets costs down for business and for taxpayers and helps us to avert disastrous climate change?

[James Cartlidge]

My right hon. Friend makes an excellent point. The long-term answers are about increasing energy security in this country and the amount of energy that we generate. We have made huge progress with renewables, for example, and in North sea transition. I can confirm that alongside energy efficiency measures, businesses can take advantage of the £315 million industrial energy transformation fund and the £450 million boiler upgrade scheme. There are also several capital allowances that may help businesses to make energy efficiency investments, such as the annual investment allowance, which has been set permanently at £1 million; the structures and buildings allowance; and, until 31 March, the super deduction.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Liz Saville Roberts.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr iawn, Mr Dirprwy Lefarydd.

Pen Llŷn entrepreneur Siôn Edwards has had to take the difficult decision to temporarily close his farm shop in Abersoch because the business cannot afford the electricity bills. He tells me that what he desperately needs is Government support with investment in energy efficiency measures and renewable energy production measures such as solar panels for small businesses, so that he can permanently reduce his energy bills. Will the Minister please meet me to discuss the proposal from the Federation of Small Businesses for support to be delivered via “help to green” vouchers?

[James Cartlidge]

That sounds like an interesting idea. I would be more than happy to meet the right hon. Lady.

[Holly Mumby-Croft (Scunthorpe) (Con)]

I welcome the measures announced today, particularly those relating to energy-intensive industries, and the duration of those measures. I will look very carefully at what has been announced.

The Minister will know that thousands of world-class steelmakers in Scunthorpe are listening carefully to what is being announced. May I press him to look at the evidence over the next 12 months so we can reassure ourselves that our support is in line with that in other countries, and so we know we are providing a level playing field for the domestic steel industry in this country? That is all it asks.

[James Cartlidge]

My hon. Friend, like her constituency neighbour sitting next to her—my hon. Friend the Member for Brigg and Goole (Andrew Percy)—is a champion for the steel sector. She makes a very good point. I understand the huge importance of the industry to her constituency and hope that it will welcome today’s announcement on the energy and trade-intensive industry support and the additional discounts that will be provided. I should stress that as well as having a more generous discount, the scheme will apply at a lower threshold; that is important.

My hon. Friend makes a really important point about duration. The current £18 billion scheme is for six months; the industry said that it wanted 12 months, and we have delivered that. We absolutely want to look at what more we can do to be internationally competitive.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

Post offices provide incredible support not only to our communities, but to the economic vibrancy of our high streets. However, they are often on quite a tight turnover. Having heard from many postmasters and postmistresses in my constituency, including in Forton, Brookhouse and Knott End, I wonder whether post offices will continue to be eligible for the same level of support. They will be well aware that the headline figures in the support package have been reduced.

[James Cartlidge]

The hon. Lady makes an important point. I know from my own constituency that sub-post offices are incredibly significant in our communities. These days, they are often where we do our banking as well as our shopping and everything else—that is certainly the case in some of my villages.

Sub-post offices are not in the intensive scheme. The level of support that they receive will therefore be less generous; we are being absolutely open and transparent about that. That is because there is a balance to be struck. If we are to be fiscally responsible, making something universal will by definition mean making it less generous than if it were targeted narrowly. We have tried to strike a balance, with more generous support for those sectors that are exposed to international competition and find it much harder to pass on higher costs. At the same time, although it is less generous, our support for the rest of the economy is still significant. That includes sub-post offices.

[Mark Pawsey (Rugby) (Con)]

Businesses have certainly appreciated the support that they have had over the past six months through the energy bill relief scheme, but businesses like and want certainty. The Minister will know that his announcement today has therefore been eagerly awaited. The 12 months of support that he is providing will go a long way, and I welcome the additional support for energy-intensive businesses. He spoke about businesses being in scope; I know that he has been challenged already today, but could he say a little more about where businesses can find the definition of “in scope” to identify whether they qualify?

[James Cartlidge]

My hon. Friend speaks with great knowledge of manufacturing, which is very important in his constituency. I am glad that he welcomes the 12-month duration, which I agree is important: it is what businesses were calling for, and it gives them extra certainty. I am afraid that I do not have the exact “www” off the top of my head, but hopefully it is live on gov.uk; I look nervously at my officials. There will certainly be a list on gov.uk at some point today. Is it live? [Interruption.] Noises off and a nod from the officials tell me that it is now live on gov.uk. I will tweet the exact address in due course.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

From talking to local businesses before Christmas, it was clear to me just how important it was for them to get clarity on the issue. It is a shame that we did not have a statement before Christmas—I am afraid that businesses have already had to make some decisions, because they could not afford to wait—but we have had a decision now.

I want to pick up on a point that other hon. Members have made in relation to blocks of flats. Communal areas are charged at a commercial rate, but obviously that will be changed as a result of the decision announced today. How can we ensure that costs are not passed on to leaseholders?

[James Cartlidge]

The hon. Gentleman makes a very good point. Just to be clear, we are aware that some domestic customers receive energy bill support via the EBRS—the current scheme, which is non-domestic. They include people in park homes and on heat networks, which are presumably the sort of case that he is talking about. While domestic consumers on a non-domestic meter will continue to benefit from the discount offered through the extension of the EBRS to the new discount scheme, we are developing options to ensure that they receive support in line with other domestic users after April.

[Simon Hoare (North Dorset) (Con)]

Micro and small businesses are the lifeblood of my constituency. Many of those businesses will be off grid and will be using oil. I welcome my hon. Friend’s statement, but can he say something to give them a crumb of comfort? Can he assure me that they and others in similar circumstances across the country will be in his thoughts going forward?

[James Cartlidge]

I am grateful to my hon. Friend for raising those cases and exceptions, as did his fellow Select Committee Chair, the hon. Member for Bristol North West (Darren Jones), who chairs the Business, Energy and Industrial Strategy Committee. As we announced at the 2022 autumn statement, the Government will provide £150 in support for UK non-domestic consumers who are off the gas grid and who use alternative fuels, with larger users of heating oil receiving additional top-up payments based on actual usage. No decisions have been made on further support. We will continue to monitor the situation.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Many theatres, galleries and museums are in energy-inefficient buildings—listed buildings with high energy costs, which are necessary if they are to maintain appropriate conditions for their audiences or their collections. We know that there will be a reduced support scheme, but the Minister has not given details about the public sector and charities. That lack of clarity will compound anxieties about financial pressures in the spring. Theatre and orchestra tax reliefs are already planned to be cut by 15%. Can the Minister tell me what the Government are doing to reassure our critical arts organisations and protect them from this storm of financial challenges?

[James Cartlidge]

I assure the hon. Lady that those organisations would at least qualify for the universal scheme. If she wants to hear the exact details, from 1 April until 31 March next year all eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97 per megawatt hour automatically applied to their gas bills, and a unit discount of up to £19.61 applied to their electricity bills. That will include all the types of institution to which the hon. Lady has referred.

[Jack Brereton (Stoke-on-Trent South) (Con)]

Energy-intensive industries, particularly the ceramics industry in Stoke-on-Trent, have been most exposed to global energy price shocks, as they have to fire their wares at over 1,000°C. Many of those businesses have not been eligible for the support received by other energy-intensive sectors. Can the Minister reassure me that all ceramics producers in Stoke-on-Trent will receive the additional support that they need?

[James Cartlidge]

My hon. Friend is a champion for the ceramics sector, and I know how important it is to the Potteries and to his constituency. If he looks at SIC code 23 in the list of sectors, he will see a range of ceramics industries that are covered. It is worth looking at that list, because there are a great many specific types. Obviously we want to support business as far as possible. As I have said, the qualification for support is for the sector in question to be above the 80th percentile for energy intensity and the 60th percentile for trade intensity, and that is likely to cover much of the ceramics sector.

[Sammy Wilson (East Antrim) (DUP)]

I welcome this package, and I especially welcome the inclusion of charitable organisations, but the fact remains that even if energy prices stabilise, given Government policies on net zero and the decarbonisation of electricity, there will be continued upward pressure on businesses’ energy bills for the foreseeable future, and I do not believe that the package will help many of the small businesses that are hanging on by their fingertips at present because of the massive energy price increases.

First, will these measures apply to Northern Ireland automatically or, because of the separate regime, will they have to be tailored to the Northern Ireland market? Secondly, when it comes to energy-intensive industries that do a lot of trade, will the package include businesses such as food processing, which is very important in Northern Ireland?

[James Cartlidge]

Yes, food processing would be included. If the right hon. Gentleman is asking whether food processors would be in the energy and trade-intensive section, I suggest that he look at the website later or ask the company in question to do so. As with the current energy bill relief scheme, support will be given to UK non-domestic customers including those in Northern Ireland.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

The statement will be welcomed by many ceramics manufacturers in Stoke-on-Trent North, Kidsgrove and Talke, but they also want to ensure that they are all eligible. The support to date has meant that £4 million has been saved for one of them, but, sadly, hidden clauses, never used before, are being exploited by some energy suppliers that are trying to smack companies such as Churchill China and Steelite with millions of pounds’ worth of costs on the basis of a past spot price. Will the Minister meet me, other Stoke-on-Trent Members of Parliament and Rob Flello, the chief executive of the British Ceramic Confederation, to look at those examples and hold to account the energy companies which are trying to exploit the Potteries?

[James Cartlidge]

Like my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), my hon. Friend is a champion for that incredibly important industry in his constituency, and he is right to stress the importance of energy support. I entirely understand that there has been great anxiety about the prevailing level of energy costs, and we hope that this package will provide vital help. According to a message that I have received on WhatsApp, ceramics are dealt with in SIC codes 23.1, 23.2, 23.3 and 23.4 and, I think, one more. As for my hon. Friend’s other request, of course I would be happy to meet him to see what more we can do, because this is an important sector for him and, indeed, for the rest of the United Kingdom.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

As well as considering the excessive deposits about which we have already heard, will the Ofgem inquiry consider the high charge for the delivery of energy to business premises, which, in some cases, can amount to double the wholesale price? Does the Minister agree that any inquiry will need to be swift, with immediate action, if we are to avoid a raft of businesses going bust later this year?

[James Cartlidge]

The hon. Gentleman is right about the need to be swift. I have responded to a number of Members by referring to the letter to Ofgem that the Chancellor was sending today, asking it to produce an urgent update, before the Budget, on the review of the non-domestic energy market, because of all the stories we are hearing from colleagues about the way in which some non-domestic providers are behaving. I will ensure that the letter can be found on gov.uk. It must be said that there are many excellent providers in the market, but it is less regulated than the domestic side, so I think it important for Ofgem to consider these many points. I should also say to the hon. Gentleman that there have been some recent changes in the cost of connecting to the grid, and I am happy to write to him with further details about that.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I appreciate that balances must be struck, but I think that small businesses, including many in my constituency, will have listened to this announcement with deepening anxiety. Research from the Federation of Small Businesses suggests that one in four small businesses are expected to close, downsize or radically change their business models when the Government reduce energy support. Obviously, that research was conducted before we knew the shape of this proposal, and it is much less supportive than the FSB and others hoped.

Let us be clear: this decision poses an existential threat to small businesses, many of which think that, in a sense, they are being left vulnerable to wholesale energy price hikes while the Government wash their hands and walk away. Will the Minister look at it again, and, in particular, will he look at other ways of supporting small businesses with the multiple challenges that they face, for example by suspending covid loan debt repayments so that they have some hope of surviving this year?

[James Cartlidge]

I understand why colleagues are concerned when they receive correspondence, whether it involves the FSB acting at a national level or individual businesses in their constituencies. These have been incredibly challenging times. I ran a business before I came to the House, and I went through the credit crunch, which was unbelievably stressful. We were a mortgage company, and mortgages disappeared on a far greater scale than they did some months ago. It is good to see them returning, and with lower rates in recent days.

Let me say to the hon. Lady, however, that this remains generous support. It is not as generous as it might be—I have been clear about that—but it will still be significant for businesses. Let me also stress a point that I made in an earlier answer. If we go back to the beginning of the EBRS and then up to the end of the discount scheme in April 2024, we see that there are 18 months in which businesses can adapt. I know that it is not easy, but significant funds are available to support efficiency. I think that, in circumstances such as these, all of us—people who run charities or businesses, and Ministers —must look at what more we can do to run our operations more efficiently in the face of huge changes in energy prices.

[Mike Amesbury (Weaver Vale) (Lab)]

What would the Minister say to Mr Uppall, who runs a vital service—a post office—in Hartford, in my constituency? What would he say to the likes of Alison, the landlady of the Bulls Head in Frodsham, also in my constituency, about his rationale and that of the Government in reducing vital support at this particular time?

[James Cartlidge]

The hon. Gentleman is absolutely right to raise the points made by his constituents. As I said to the hon. Member for Brighton, Pavilion (Caroline Lucas), we do understand that the way in which prices have risen has caused great anxiety. In Government, however, we have a duty to consider not only what support we can provide, but the cost to the Exchequer. We have to take that balanced approach. The £18 billion six-month scheme that is currently operational is extremely expensive, and, as I said earlier, stakeholders to whom I have spoken, including those in our major industrial lobbying organisations, did not expect support to remain at its former level because of the huge cost. We have to balance this continued support—which will help the businesses and institutions to which the hon. Gentleman has referred—with the need for fiscal prudence.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

On Friday I visited Gills convenience store, which provides essential services for constituents in Brakelaw and Fenham. The owners told me that the No. 1 threat to their business was spiralling energy costs, and that message is being echoed by pubs, the hospitality sector, charities, and small businesses across Newcastle. The Minister says that this support will be limited to £400 because, he says, it is not for Government to pay the bills of business. Will he at least agree with me that it is for Government to deliver a sustainable, secure energy market which works for small businesses, and that his Government are entirely failing to do that?

[James Cartlidge]

One of the reasons for the Ofgem review that I have referred to several times is precisely to ensure that we have a non-domestic market that works as effectively as possible for businesses. A situation such as this will bring to the surface problems that businesses would not experience to the same degree in normal times.

Let me make this point to the hon. Lady: not a single Opposition Member has stood up at any point and acknowledged to any degree that we have to consider the cost of these schemes. Of course we have to consider the impact of rising energy prices on businesses, but it was only a few days ago that the leader of the Labour party said that the era of the “big Government chequebook” was over—those were his words. We have to take a balanced approach. We are continuing to provide universal support for businesses, charities and the public sector, and targeted additional support for internationally trading sectors, particularly manufacturing. At the same time, we have to consider fiscal prudence if we are to run a stable and growing economy.

[Stephen Kinnock (Aberavon) (Lab)]

I am sure the Minister would agree that a key aim of the support scheme must be to ensure that our steel industry can compete internationally on a level playing field. The German Government have guaranteed their steel industry an electricity price of €130 per megawatt hour for 2023. In contrast, what the Minister has announced today only provides our steel industry with a discount on electricity prices above £185 per megawatt per hour. That leaves UK steel producers to pay an estimated 63% more than their German counterparts. Why are the Government once again letting down our steel industry and forcing our steelworkers to compete with one hand tied behind their back?

[James Cartlidge]

I do not agree about the level of support. I cannot speak for what is happening in Germany, but this remains significantly more generous support for the energy and trade-intensive industries. The hon. Gentleman is right about the figures for this country: the price threshold for the scheme is £99 per megawatt hour for gas and £185 per megawatt per hour for electricity. To be clear, about 60% of the up to £5.5 billion that we have allocated for this scheme would be for the energy and trade-intensive industries. That is more than half of all the funding. It is a significant commitment and includes major manufacturing sectors such as steel.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Minister talks about financial prudence, but when any business goes out of business this Government lose the tax from pay-as-you-earn and all the other income from them. His own Government have described the hospitality sector as a vulnerable industry. We have heard in the Chamber today that increases of 400% and 500% are common. Energy costs of £5,000 to £15,000 a month are not uncommon. Does he think that a maximum of £191 per month will make them feel any less vulnerable?

[James Cartlidge]

We do see the importance of the hospitality sector in every part of the United Kingdom. That is precisely why we have the current six-month scheme—£18 billion. Let us be clear about something: if a Government wanted to raise £18 billion year on year, that would require an increase in the basic rate of income tax of 3p. That is enormous and puts into context the scale of that cost.

Yes, we want to support hospitality. To give one example, because of freezes or cuts to the duty on whisky and spirits, that duty is now at the lowest level in real terms since 1918. Alongside that, next August, for the first time ever in this country—something not possible when we were a member of the EU—we will have a differential duty with a lower rate on a pint in a pub compared with a can of the same beer in a supermarket. We are supporting hospitality but we are balancing that against the need to run a tight fiscal ship.

[Stephen Farry (North Down) (Alliance)]

The Minister has already clarified that the scheme will automatically apply to Northern Ireland. However, energy policy is normally devolved in Northern Ireland. As he knows, we have a distinct energy market with a different profile in the use of fuels, including alternative fuels. Will a restored Executive have the opportunity to shape that policy to suit local needs? I suspect that we will get a much greater share through the Barnett formula based on the population than we would through direct support, given that we do not have the same degree of reliance on gas.

[James Cartlidge]

The hon. Gentleman makes a fair point. There are substantive differences between the way the energy market works in Northern Ireland and how it works on the Great British mainland, as it were. We want to see, as far as possible, the same support in Northern Ireland as in England, Scotland and Wales. He will know that the £600 payment, which combines the £400 support that all households should have had and the £200 alternative fuel payment, is being paid out this month. That shows the degree of support for Northern Ireland. On what would happen were an Executive to be in place, although we would very much like to see that, I will not speculate on Northern Ireland politics at this stage.

[Fleur Anderson (Putney) (Lab)]

The delay in this statement has already left several businesses in Putney to go under. I am now concerned about the post office in Southfields, where the sub-postmistress thinks they will be unable to continue operating. There will be a community cost if post offices across the country go under as a result of the increase in bills. Has the Minister assessed the impact of the energy crisis on post offices? Can he confirm whether they will be included in the cut-back scheme after March? Could he consider a community impact criteria in the scheme so that there will not be a high cost for our communities in Southfields and beyond?

[James Cartlidge]

On the point of going under as a result of the delayed announcement of the results of the review, we were due to announce on the last sitting day before recess, and we have announced on the first sitting day—it is a delay, but not a huge one. In that time, those businesses, whatever they are, will have been benefiting from the current support running until the end of March. We have now given them certainty for the next 12 months with a scheme that remains generous and universal. It is not as generous as before but I can confirm that it will include the sub-post office.

[Alison Thewliss (Glasgow Central) (SNP)]

The Minister seems to be missing the point. Many businesses I speak to are now locked into impossibly expensive contracts. They have no choice. That is not just the cost per unit but the standing charges that they are asked to pay. The best deal that the charity Toryglen Community Base in my constituency could get was to go from £9 k a year to £62 k a year. The food manufacturer Calder Millerfield is paying six times more now than it was before—that is what it has been offered with the Government support at its current rate. Many small businesses and hospitality businesses in Glasgow Central are facing the same. What will the Minister do about these hopelessly expensive contracts that businesses are being locked into now at these high prices? What negotiation is he doing with the energy companies to bring those prices down? They will push businesses under more than anything else.

[James Cartlidge]

I was absolutely clear in my statement that the precise reason that we are continuing the universal support is for those very companies, charities or other public sector organisations that fixed while prices were higher and have since reduced. We have precisely those companies in mind, but it is also for those companies that may currently be on a lower tariff that is about to finish, who had a long-term fix from some years ago when energy was much cheaper. The point is that it is another 12 months of security. It is right that it is not as generous as it was, but when speaking to stakeholders there was no expectation that a Government would continue a level of support costing £18 billion for six months. That is a very expensive intervention. This remains a significant intervention and will remain generous for charities, businesses and public sector institutions.

[Wendy Chamberlain (North East Fife) (LD)]

Since the autumn statement, I have raised the case of an agricultural food manufacturer in my constituency in relation to energy support four times. Despite positive noises in the Chamber and its offer to engage in the review, to date we have heard nothing back. I have two questions for the Minister. First, will the review be published on gov.uk so that we know exactly who has been consulted? Secondly, he mentioned the different centiles, but what if a business disagrees with the Government’s assessment? Who does it appeal to? Who is the ultimate arbiter?

[James Cartlidge]

If the hon. Lady has a business that wrote in to the Department to contribute to the review and did not receive a response, I would be grateful if she forwarded me a copy of that correspondence so that I can look into it.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The energy profits levy measures are predicted to bring in £56 billion and most of that money is coming from Scotland, yet businesses across Scotland are left struggling, particularly in the hospitality trade. The Struther Farmhouse Tea Room in my constituency is facing a 500% increase in its gas bill, with its gas and electricity up by £25,000 in a year. Despite what the Minister says, these businesses are now reaching a cliff edge because Government support is estimated to be a maximum of £2,000 against these increases. How many small businesses and jobs does he think will be lost under the guise of Government fiscal prudence?

[James Cartlidge]

I know that the Scottish National party struggles to understand the basic concept of fiscal prudence, but let me just explain this to the hon. Gentleman. When he talks about the £56 billion, it is not just for the energy profits levy; it also includes the energy generator levy, and we see that money as coming into the UK Treasury from across the UK to support the United Kingdom. It will support businesses in Northern Ireland, as we said earlier, as well as businesses in England, Scotland and Wales. Scotland has benefited from huge support, not just in the pandemic but through the increase in energy costs that has been seen across the United Kingdom. It has benefited from the fact that we are stronger together as a Union supporting every part of our Union.

[Dave Doogan (Angus) (SNP)]

Meanwhile, back in reality, I am sure the Minister will agree that manufacturing is the lifeblood of any economy. Many of the manufacturing successes across these islands are small and medium-sized enterprises such as ScanStone in my constituency, which manufactures outstanding potato systems. It is competing with the Germans across not just the UK market, but the EU market. The existing support that it is enjoying is not proving enough, and now it is going to get less. Can the Minister help me to understand what I should say to ScanStone in Angus about its need to navigate its way through this energy crisis? It is not an intensive user but energy is a major overhead that it is really struggling to accommodate.

[James Cartlidge]

The hon. Gentleman talks about being back in the real world, but when I made my statement about our plans for alcohol duty, the day before the House rose for the recess, he asked me if I had considered having a differential duty. We had been consulting on a differential duty for months before then. As to his particular question, I suggest that the company looks at gov.uk to see whether its sector qualifies under the energy intensive industries support scheme, because that remains very generous and significant, and I am sure it will be welcomed by many in that sector.

[Mr Deputy Speaker (Mr Nigel Evans)]

I would like to thank the Minister for the statement and for responding to questions for just under one hour and a quarter.

Point of Order

Monday 9th January 2023 Commons Chamber

19:12

[Jack Brereton (Stoke-on-Trent South) (Con)]

On a point of order, Mr Deputy Speaker. Earlier in the statement the shadow Minister, the hon. Member for Erith and Thamesmead (Abena Oppong-Asare), mentioned Wade Ceramics in my constituency and that of my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon), suggesting that its factory had closed due to a lack of support on energy costs, but it was actually one of the most efficient and modern factories in the whole industry; the main reason it closed is that it lost its main contract. Can you advise me on how the record might be corrected?

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the hon. Member for his point of order and for giving advance notice of it. I was not here for what the shadow Minister said, but Mr Speaker has always indicated that, should any Member—including shadow Ministers and Ministers—reflect on what they have said and find that they have made an error, they should correct it at the earliest possible opportunity. The hon. Member has put his view on record, and I thank him for that.

Procurement Bill [Lords]

2nd reading
Monday 9th January 2023 Commons Chamber

Second Reading

19:13

[The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)]

I beg to move, That the Bill be now read a Second time.

At some £300 billion, public procurement accounts for around a third of all public expenditure every year. By improving the way we procure, we can save the taxpayer money, drive innovation and resilience, and deliver benefits across every region of the country. We have an opportunity, post our departure from the European Union, to create our own regulations that can help to drive transparency, prosperity and growth. The Procurement Bill seizes that opportunity and reflects three years of policy development, public consultation and detailed intensive engagement. This has included local government, the education and health sectors, businesses of all sizes, and the social enterprise sector, among others.

To ensure that the new regime is truly world leading, the Bill will fundamentally improve the UK’s public procurement regime, driving a relentless focus on value for money. It will create a simpler, more flexible commercial system that better meets our country’s needs.

[John Spellar (Warley) (Lab)]

Will the Minister give way?

[Jeremy Quin]

I give way to my right hon. Friend.

[John Spellar]

The Minister is starting out with the message that the Government are somehow able to do this because of Brexit, but it was nothing to do with European regulation that the Ministry of Defence decided to contract for naval vessels from other countries. In doing that, it was no way acting like any other European country. It was a Whitehall choice and a ministerial choice. The Government had the choice, and they should stop using this as a smokescreen.

[Jeremy Quin]

I referred to the right hon. Gentleman as my right hon. Friend because he is so familiar from my appearances at the Dispatch Box in my Ministry of Defence role, and it is lovely to hear the same lines being produced again. I am no longer in that role and I am not here to speak for the Ministry of Defence, but I think he must be referring to the fleet solid support ship programme—a prospect that will rejuvenate Harland & Wolff and really get Appledore working again. I believe that it will deliver 1,500 jobs to the UK shipbuilding industry, helping to recreate the skills that were so foolishly lost in the last round. The decisions that were made under the last Labour Government in 2005 left us with fewer yards than we would all like, and I think it was a positive decision from the Ministry of Defence to award the FSS contract as it did. I wish Harland & Wolff and the rest of the British designers the very best with it.

[John Spellar]

But is the Minister clear, now that he has left the Ministry of Defence, that the contract is not with Harland & Wolff, but with the Spanish shipbuilder Navantia and a British shell company set up only last June? There is no assurance that this work will go to British yards.

[Jeremy Quin]

The right hon. Member refers to Team Resolute, and I am delighted that it won the tender. The majority of that work will be undertaken in British yards—[Interruption.] We could continue to make this a discussion on defence procurement, but I think the rest of the House wants to discuss the Bill before us, as I certainly do.

[Bill Esterson (Sefton Central) (Lab)]

rose—

[Jeremy Quin]

But before doing so, I give way to the hon. Gentleman.

[Bill Esterson]

The Minister says that he is here to talk about a modern procurement system for the UK, but The Guardian is saying today that a Conservative peer who advised the Government during the pandemic helped a company to secure a £50-million contract after being introduced to the firm by another peer with financial interests in that company. Can the Minister tell us exactly which clause in the Bill he is putting forward today would have prevented that extreme example of cronyism from happening?

[Jeremy Quin]

Alas, it is a great loss to me, but I have not read The Guardian today and I am not in a position to comment in detail on what the hon. Gentleman has said. If he goes through the Bill in detail, as I and other Members have, he will find the parts that refer to declarations of conflicts of interest. These are issues that we will be significantly improving through the Bill to ensure that there can be no doubt that integrity lies at the heart of our procurements. That has always been the case, but it will be even more entrenched as a result of the provisions of this Bill.

[Bill Esterson]

rose—

[Jeremy Quin]

I hope that the hon. Gentleman will allow me to make some progress. If I give two chances to every Member, we will be here for a much longer time.

There are currently hundreds of procurement regulations spread over four different regimes for different types of procurement. We will consolidate them into a single regime. This will remove duplication and create one rulebook that everyone can understand and use, with sectoral differences only where absolutely necessary, such as for reasons of defence or national security.

[Mike Amesbury (Weaver Vale) (Lab)]

Which line in the Bill will prevent, say, a future landlord who has a close relationship with a future Minister from securing a contract worth millions of pounds for personal protective equipment, or prevent someone who produces underwear, who happens to be in the other place, from securing a contract via a conversation via a VIP lane? Which line in this Bill will close that down?

[Jeremy Quin]

If the hon. Gentleman has not read the Bill, I recommend that he does so. There is a lot of it, but it is a good read and he will find it has a range of measures to ensure transparency at the heart of our procurement. I do not accept the premise of his question—if his question has a premise—that previous procurements were incorrectly awarded; far from it. If he wants to see a Bill that enhances transparency, that ensures there are always proper procedures in place to address conflicts of interest and that ensures the best propositions win tenders, he will support the Bill this evening, as I hope the rest of the House will.

[Tim Loughton (East Worthing and Shoreham) (Con)]

Perhaps I could mention something that is in the Bill, rather than not in the Bill.

I welcome the Bill, and particularly how it will benefit our small and medium-sized enterprises and the local sustainability of good-quality British products, but clause 65 was helpfully added by the noble Lord Alton and a cross-party alliance in the other House to make sure that we do not procure from countries found guilty of genocide or human rights abuses, particularly China. Can the Minister confirm that the Government not only support clause 65 but will extend it beyond just surveillance technology? We should not procure goods and services from countries found guilty of genocide or human rights abuses, such as China in Xinjiang, as verified by a vote in this House. We should just not deal with them.

[Jeremy Quin]

It is a pleasure to respond to a question about a clause in the Bill, for which I thank my hon. Friend. We are thinking through the Lords amendments, and there will be further time to discuss them in Committee. Anything that is added to the Bill must be deliverable and workable. I stress that the Bill already contains much-enhanced provisions to ensure we can prevent inappropriate suppliers from coming into our production chain, not just as primes at the top level but right through the supply chain. For example, we will be able to debar companies for misconduct or illegality. We are taking far more powers than we had under the old EU regime, which should be welcomed by all Members of this House.

[Bob Seely (Isle of Wight) (Con)]

Will my right hon. Friend give way?

[Jeremy Quin]

I will give way, but then I must make progress.

[Bob Seely]

My right hon. Friend was making a point about ethics, so I will make a point about dependency. Do the Government accept that they have purchasing power to reduce our dependency on authoritarian states, and do they accept there are lessons to be learned from the Ukrainian war, our economic and energy dependence on Russia and our economic dependence on China? Will they accept an amendment, tabled by me or by others, so that, as well as having ethics at the heart of this Bill, we can discuss how to reduce our dependency on states that seek to harm us, be it Russia, China, North Korea or Iran, etc.?

[Jeremy Quin]

I would welcome the opportunity to speak to my hon. Friend about any amendment he might table, and we would, of course, look at it seriously. I recognise the general point that this country has realised, as have all our friends, through covid and subsequently that it is incredibly important to understand our supply chains and to understand where our procurement comes from. The Bill will help us do that by enabling us to look through the entire supply chain—not just the top level, but deep inside—to make certain that we are able to stop suppliers that are effectively in misconduct, and to make certain that resilience is part of our thought process in procurement. I believe all those valuable assets are incorporated in this Bill, but I am more than happy to have further discussions with my hon. Friend.

I hope the House will forgive me if I make a little progress. Running through this Bill is a theme of greater transparency. Through the Bill, we will deliver world-leading standards of transparency in public procurement. It covers contracts awarded across the public sector, including by central and local government, arm’s length bodies, education authorities and health authorities. It also covers contracts awarded by publicly funded housing associations and by companies in the water, energy and transport sectors.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The Minister is being generous in giving way. Can he indicate whether the Government will accept the amendments made in the other place requiring contracting authorities to maximise environmental benefits when awarding contracts, and particularly to ensure compliance with the Climate Change Act 2008 and the Environment Acts? Does he accept that that should not be optional, as the climate emergency is so urgent that it ought to be required by this Bill?

[Jeremy Quin]

That urgency is why we have published procurement policy notes on our commitment to net zero, just as we have published them on social value. We are keen for the Bill’s wording not to be very prescriptive, because the Government will have to announce procurement policies from time to time. I totally accept that there is a case for ensuring that our net zero commitments are met, but putting them in the Bill, which would create a big, laborious process for SMEs and procurers, be they local councils or central Government, is not the right way forward.

This Bill sets out a strong framework that gives us far more powers, but it is then open to the Government to set out, through a national procurement policy statement, the focus on social value or environmental concerns. I hope the hon. Lady accepts that the procurement policy notes we have already published show our commitment to doing just that.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

The Minister is being incredibly kind in giving way, and I recognise his generosity.

What measures in the Bill will protect the supply chain from collapse, as we saw with Carillion? Project bank accounts, which are already used across Government, would protect the supply chain. Thousands of small businesses went out of business or lost hundreds of thousands of pounds during Carillion’s collapse, so will the Minister introduce something like that? There is also a question about protections for retention money, so will that be included?

[Jeremy Quin]

That is a matter not so much for the Bill as for the operation of commercial practice. The outsourcing playbook has been used effectively since Carillion, and we have since seen other examples of public suppliers getting into difficulty. They are carefully monitored across Government. We will not always spot everything, but there is close working across Government to monitor our suppliers and to ensure that we can act, and act swiftly, where a supplier falls into problems.

[Debbie Abrahams]

National Highways, for example, uses project bank accounts to protect its supply chain as a matter of course, and it says that they are its preferred option. If the Department associated with National Highways is doing that, why cannot they be used across all Government Departments?

[Jeremy Quin]

I am not familiar with the specifics of project bank accounts, to be perfectly frank. We have put measures in place to protect supply chains in the event of the collapse of a prime supplier, but I will take this up with my officials and write back to the hon. Lady.

In recognition of the specific needs of defence and security procurement, and to help deliver the defence and security industrial strategy, a number of provisions specifically apply to defence and security contracts. These provisions will provide flexibility for contracts to be upgraded to refresh technology and avoid gaps in military capability. There will continue to be special rules for certain social, health and education services, to be identified in secondary legislation, that may be procured as so-called light touch contracts, recognising the particular domestic and social aspects that should be captured in such procurements.

The interaction with regulations being prepared under the Health and Care Act 2022 was the subject of particular attention when the Bill was considered in the other place, and it may well be of interest to this House. The Bill will apply to most areas of NHS procurement of goods and services to help drive efficiency and value for money. However, the Health and Care Act regime is intended to address the specific requirements of the health and care system and to fulfil the Government’s intention to deliver greater collaboration and integration in the arrangement of clinical healthcare services.

Let me be clear that the Bill strengthens the NHS’s ability to deliver. The reforms to healthcare commissioning in the Health and Care Act will give commissioners more flexibility in how they arrange services so that both procurement systems can work effectively and deliver care for patients.

The Bill sets out the key principles and objectives of public procurement. These place value for money, public benefit, transparency and integrity at the heart of our procurement system. As well as competition and efficiency, there must be good management to prevent misconduct.

[Richard Burgon (Leeds East) (Lab)]

Public procurement is one key way in which the Government can set a framework whereby employers’ standards can be driven up and a good example can be given to other employers. So will the Minister accept an amendment that gives priority when awarding Government contracts to the many thousands of companies that pay their staff the real living wage?

[Jeremy Quin]

I do not think this is the process whereby we tell employers what they should be paying their employees; that would be a big reach too far. The hon. Gentleman will be pleased that this Bill contains provisions that ensure that we can prevent companies that commit misconduct from taking part in procurements, and that can be in any range of areas. However, this is not the Bill by which we are going to be regulating employees’ pay.

[John Penrose (Weston-super-Mare) (Con)]

I welcome this Bill, particularly because, as the Minister rightly points out, it introduces far greater transparency and competition, precisely as I was calling for two years ago in the Government-commissioned report on competition policy. I am delighted to see the Bill coming forward with those measures. May I push him on value for money, which he mentions and which is clearly important? The evaluation task force, which exists jointly between his Department and the Treasury, is a tiny unit that covers a tiny fraction of Government procurement spending. Will he pledge, either today or later in the Bill’s progress, that its role will be expanded to cover far more of what we are buying, in order to make sure that we are buying things that genuinely work and it can say that things have been evaluated and either they have produced the goods or they have not, and therefore should or should not be renewed or rolled over in future?

[Jeremy Quin]

I thank my hon. Friend for the ideas he threw in our direction, which have been picked up. He is right to say that greater transparency is absolutely reflected in this Bill, and I thank him for the work he did. There has been a long lead-up to get to this Bill and we thank him very much for his support. I am proud of the evaluation task force and the work it does, not only on procurement, but on other areas of policy, looking into them to make certain that they are delivering what we intended when they were announced. That is an important tool for all Governments. I would love to see the evaluation task force grow. It is growing in experience and in the amount of projects it is taking on. It has covered a fair bit of the waterfront, but I appreciate that it is merely a small element at the moment and I would like to see it grow. However, he will forgive me if I do not start making commitments of that sort at the Dispatch Box—

[Paul Howell (Sedgefield) (Con)]

When we talk about NHS procurement and the challenges for small and medium-sized enterprises in dealing with the NHS, we are talking about small companies dealing with a vast organisation. PolyPhotonix, a company in my constituency, gave me an example of the frustration involved. It created a light therapy mask to help treat diabetic retinopathy, and I have been supporting the company. The NHS procurement process has been extremely complex, although the company got the mask approved. There was NHS investment in innovation to develop it, but it became used in the private sector before the NHS, because the NHS procurement could not get it right or could not make the approvals. Those were finally obtained and the mask is now active, fabulous and a great product. The other NHS trusts all want to approve it themselves, so surely there is an opportunity here. If something is approved by one NHS trust, surely it does not need to be approved by every other one before it can be used. Is there some opportunity in the Bill to facilitate that greater ease for SMEs?

[Jeremy Quin]

I recognise the frustration of the company in my hon. Friend’s constituency. He should take up the specifics of that with my right hon. Friend the Health Secretary, but more generally he raises an extremely valuable point, not just in the health sector, but more broadly, about the ease of doing business with Government for SMEs. The Bill contains a range of measures on this: it puts a duty on procurers to ensure that they are considering the specific needs of SMEs; it ensures there is a 30-day payment period; it ensures that pipelines are put out well in advance; it says, “You don’t need to be insured to do the job before you have won it”; and, above all, it provides for one entry point and allows companies to set out in one place what they are as a smaller company before they even start thinking about the tender they are applying for. All those are incredibly valuable components to make it easier for an SME to thrive.

[Bill Esterson]

rose—

[Jeremy Quin]

I will not give way at this stage. I thank the hon. Gentleman for the offer, but I think I should be making a little more progress.

In delivering value for money, the Bill will require procurement teams to take account of national priorities, as set out in a new national procurement policy statement. These are national priorities such as improving supply chain resilience, enhancing skills, driving innovation and, of course, protecting the environment. Procurers will be able to give greater weight to bids that support such priorities. I know that in the other place there is a strong desire to pursue particular interests and include a range of policies in the Bill. The Government instead believe that that is a purpose of the NPPS. We want to keep this legislation as clear and simple as possible; the intention is that we allow procurement to keep pace with evolving policy priorities and we do not swamp contractors and SMEs in paperwork.

The Bill will accelerate spending with small businesses. New duties will require contracting authorities to have regard to SME participation. Public sector buyers will have to look at how they can remove bureaucratic barriers and level the playing field for smaller businesses. Commercial frameworks will be made more flexible, with the new concept of an open framework, which will allow for longer-term frameworks that are reopened at set points, so that small and emergent businesses are not shut out for long periods. These measures build on existing policy, which allows procurers to reserve competitions for contracts below the thresholds for SMEs and social enterprises based in the UK, taking full advantage of the new freedoms following our exit from the EU.

We are determined to improve the prompt payment of small businesses in our supply chains. As I have mentioned, 30-day payment terms will apply contractually throughout the public sector supply chains and be implied into the contract, even when not specifically set out. The Bill provides for new improved procedures for the award of public contracts, supported by greater flexibility. Buyers will be able to design procurement processes that are fit for purpose and will create more opportunities to negotiate with suppliers so that the public sector can work in partnership with the private.

We will also take tougher action on underperforming suppliers.

[Stephen Kinnock (Aberavon) (Lab)]

On partnership between the public and private sectors, the steel industry is a crucial aspect of that. Does the Minister agree that the Government should be looking to set indicative targets for the amount of domestically produced steel that we are putting into Government-funded projects? That would enable us as a country to make, buy and sell more in this country, which should surely be a strategic objective of the Bill.

[Jeremy Quin]

The hon. Gentleman treads a well-trodden path. Through steel procurement, we are always keen to set out the pipeline and provide every assistance we can to the domestic steel industry. However, as he knows, there are also international obligations, of which we are mindful and I know he will also be mindful, in respect of how we conduct our public procurement. I am not certain whether what he suggests would be consistent with the Government procurement agreement. [Interruption.] On pipelines, we are doing everything we can to help the domestic steel industry see the opportunities ahead of it and engage with public procurement. This is something we definitely and warmly appreciate.

We will also take tougher action on underperforming suppliers or those who present risks through misconduct. The Bill puts in place a new exclusions framework that will make it easier to exclude suppliers that have underperformed on other contracts. Through the Bill, I am pleased to say that we are targeting those who benefit from the appalling practice of modern slavery and, in doing so, undermine our own industrial resilience. The Bill makes explicit provision to disregard bids from suppliers known to have used forced labour or to perpetuate modern slavery in their supply chain. Contracting authorities will now be able to exclude suppliers where there is appropriate evidence of wrongdoing, whether in the UK or overseas.

[Debbie Abrahams]

I wholeheartedly support the Minister on that. I want to take him back to a previous point about late payments and the 30-day term. How will the Government monitor those and ensure adherence? Will that be done through audited accounts? What will be the punishment if there is not adherence?

[Jeremy Quin]

Ultimately, this is contractual. On the prime, that is easy: we will be paying the prime contractor within the 30-day period. People in the supply chain will be aware of the contract under which they are supplying to the prime, and we expect that 30-day payment to trickle all the way down the chain. It is the first time that such a measure has been incorporated. It really will be for primes to be held to account. I say to hon. Members of this House that if partners to a contract are not being paid without good cause, it will call into doubt the contract with the prime supplier, so it will be very much in the interest of the prime supplier to deliver. Every effort the Government have made to improve the payment terms through the supply chains has so far been adhered to pretty well by industry. Across Government, we have seen a significant improvement in payments out to industry, and we are expecting a ripple-down effect as a result of the Bill.

We will also create a new debarment list, accessible to all public sector organisations, which will list suppliers who must or may be excluded from contracts. This approach will ensure the high standards that we expect in the conduct of suppliers who benefit from public money. Embedded in the Bill is our commitment to creating an open and transparent system. Everyone will have access to public procurement data: citizens will be able to scrutinise spend against contracts; suppliers will be able to see the pipeline of upcoming contracts so that they can identify new opportunities and develop innovative solutions; and buyers will be able to analyse the market and benchmark their performance against others on, for example, their spend with small and medium-sized enterprises.

The Bill contains key provisions to enable these new levels of transparency, along with the statutory obligation on the Government to deliver a single digital platform to host this data. The Bill will strengthen existing obligations on contracting authorities to identify and mitigate the conflicts of interest in procurement decision making. These new requirements will ensure that conflicts of interest are managed transparently and in such a way that maintains the integrity of the public procurement regime. Additional safeguards include mitigations that may be required of suppliers by contracting authorities and for procurement teams to record and maintain a written assessment of conflicts.

In common with all procurement regimes, provision is made in the Bill for direct awards in a limited number of special circumstances—for example where extreme urgency means that there is no time to run a competition. Ministers will now be able to make provision for contracts required in a rare emergency event when action is necessary to protect life or public safety. This must be kept under review, revoked when no longer necessary, and is subject to the necessary parliamentary scrutiny in both Houses through the affirmative procedure. The Bill also requires that, before a contracting authority directly awards a public contract using any such regulations, a transparency notice must be published. These are major safeguards that did not previously exist.

The Bill fully honours implementation of our international trade agreements, including the World Trade Organisation agreement on Government procurement, which provides UK businesses with access to procurement opportunities collectively worth an estimated £1.3 trillion per annum.

[Sir James Duddridge (Rochford and Southend East) (Con)]

The Minister mentions trade deals. Both the Australia and New Zealand trade deals have a large procurement element. That will fall away if the Bill becomes an Act. I note that the Trade (Australia and New Zealand) Bill has not yet received Second Reading in the other place. May I urge him to hold discussions with business managers with a view to manipulating things so that we get Royal Assent for this Bill rather than for the Trade (Australia and New Zealand) Bill to avoid the very small problem—a problem of just a few weeks—of trade deals being done within a new set of rules that will very quickly become obsolete?

[Jeremy Quin]

I thank my hon. Friend for a most ingenious comment. I had not considered the calendar of the two Bills. It is an interesting point. I will raise the matter with business managers.

We will continue to support UK businesses so that they can continue to be successful in competing for public contracts in other countries around the world by protecting reciprocal arrangements and guaranteeing market access, treating each other’s suppliers on an equal and fair footing.

Turning finally to territorial application, we have prepared the Bill in a spirit of co-operation between the nations of the United Kingdom. As part of the policy development process, we welcomed policy officials from Wales and Northern Ireland into our team so that they had a critical role in shaping this legislation from the very beginning. As a result, the general scope of the legislation applies to all contracting authorities in England, Wales and Northern Ireland. This will ensure that contracting authorities and suppliers can benefit from the efficiencies of having a broadly consistent regime operating across constituent parts of the UK.

I regret to say that the Scottish Government have opted not to join the UK Government Bill and will retain their own procurement regulations in respect of devolved Scottish authorities. Many in the House will regret that and would no doubt welcome our Scottish friends joining the new regime, which will benefit taxpayers and public services alike across Scotland and the whole of the UK.

There has never been a piece of UK procurement legislation as comprehensive as this. It is a large and technical Bill. I accept that there may be some areas that will merit further consideration, which we will debate in more detail in Committee, but I am confident that these significant reforms open up a new chapter for public procurement in this country and will boost business, spread opportunity and strengthen our Union. I urge all Members of this House to support the Bill.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the Opposition Front-Bench spokesperson, I wish to draw colleagues’ attention to the fact that, while we are not desperately pushed for time, there is quite a lot of interest in this debate, so my recommendation for Back-Bench speeches is about eight minutes. We also have a maiden speech. If Members follow my recommendation, I will not need to impose a time limit. I call the Deputy Leader of the Opposition.

19:46

[Angela Rayner (Ashton-under-Lyne) (Lab)]

It is a pleasure to open this debate today on behalf of the Opposition. I pay tribute to the work that has already gone into the Bill in the other place. I know that constructive discussions led to positive amendments, and I hope that they will be accepted and improved as the Bill goes through this House. I was a little pessimistic about that following the Minister’s opening comments, but I hope that we can work constructively with what the other place has recommended. As the Minister says, the Bill is an extremely complicated and large piece of legislation, so I hope that we can do that.

We on the Labour Benches recognise the need for a procurement Bill to consolidate the patchwork of former EU rules and to bring the spaghetti of procurement regulations into one place—a single regime. The Procurement Bill is an opportunity to create a coherent rulebook, with one driving aim: to get value for every single penny of taxpayers’ money. We want to deliver better services that meet the demands of the British public and to unlock the world-leading innovation of the UK economy.

I thank all my hon. Friends and Members from all parts of the House who are here today. When most people hear the word “procurement”, they switch off, but I cannot get enough of it. It is absolutely critical to our economy and to our future national prosperity. It accounts for a third of all public spending—more than the NHS budget and double the education budget. When harnessed for good, the power of procurement can drive up standards, pump money back into the pockets of local communities and businesses, create jobs and skills in our towns and cities, and hand wealth back to the people who built Britain.

I fear that the Bill we have been presented with today could miss those opportunities; that the ambition of the proposals before us will not meet the moment, and will not provide answers to the challenges that we face or learn from the mistakes of the past. As it stands, the Bill is a sticking-plaster solution, allowing taxpayers’ money to line the pockets of the well-connected, those with the deepest pockets and the abundance of experts who know how to navigate the system. I want Britain to lead the world on procurement by driving every penny of taxpayers’ money into our local communities, promoting British businesses up and down the country.

There are, of course, some aspects of the Bill that we welcome—in particular the focus on reducing the burdens currently faced by small businesses. SMEs are the backbone of our economy and the current system just is not working for them. Reform is urgently needed. The British Chamber of Commerce found that SMEs are now receiving a smaller relative amount of direct Government procurement spending than they were five years ago. Small businesses across the country are being choked out of the bidding processes, which are complicated and time-consuming. SMEs are competing for contracts against big corporations that have more form-fillers than the SMEs have workers. I welcome the positive steps taken in this Bill, especially as this Government have repeatedly failed to reach their target for SMEs to benefit from 33% of procurement spend.

That being said, there is not enough in this legislation dealing with late payments for SMEs—a practice that, in the current economic crisis, is killing off too many small enterprises in this country. The Minister talks about the trickle-down effect of 30 days, but I do not believe that will work in this instance. I hope he will address that gap in his closing remarks and engage with us in the Committee to improve the Bill in that regard.

I welcome the changes made in the other place to include social value in the national procurement policy statement, but I was disappointed by the scant mention of social value in the original version of the Bill and in the Minister’s opening comments today. Social value is a tool that makes it easier to give money to local British enterprises creating jobs, skills and green opportunities in their communities. It rewards providers who want to build a better society and contribute to our nation’s prosperity in the long term.

This Bill is an opportunity to make, buy and sell more in Britain. It is a chance to give more public contracts to British companies, big and small, so that contracts do not always automatically go offshore, to the giant corporations with the lowest prices, but to businesses creating local jobs, skills and training, maintaining workers’ rights and trade union access. That is what is important and what the social value elements of this Bill need to promote.

[Stephen Kinnock]

My right hon. Friend is making an excellent speech. Returning to the issue of the three fleet solid support vessels, the MOD contract was awarded to a Spanish-led consortium. That in itself was a deeply disappointing decision, but what is even worse is that the Government are not insisting on legally enforceable guarantees from Navantia, the Spanish company that leads the consortium, that the ships will be built with British steel. Does she agree that it is outrageous that we have three key vessels being built without British steel?

[Angela Rayner]

I absolutely agree with my hon. Friend. As he says, using public money to make, buy and sell more in Britain can also be achieved through our defence spending and by spending on steel and vital infrastructure in the UK. As the party of working people and trade unions, we in Labour know that, when done well, defence procurement strengthens our UK economy and our UK sovereignty, but this Bill fails to direct British defence investment first to British business, with no higher bar set for any decision to buy abroad.

Labour wants to see our equipment designed and built here. That means our national assets, such as the steel industry, our shipyards and our aerospace. That is fundamental for Labour, and we will amend the legislation to secure it. My right hon. Friend the Member for Wentworth and Dearne (John Healey), the shadow Defence Secretary, made it clear that that is a priority for Labour, when he announced at our conference in September that Labour in government would build the navy’s new support ships in Britain.

As my right hon. Friend the Member for Warley (John Spellar) mentioned, the Conservatives announced that the £1.6 billion fleet solid support ship contract would be awarded to Spanish shipbuilders, meaning at least 40% of the value of the work will go abroad. Ministers have confirmed that there is no limit on how many jobs will be created in Spain and that there are no targets for UK steel in the contract. That is frankly a disgrace and a wasted opportunity, when the use of procurement could have been a force for strengthening our UK economy and our security at the same time.

I hope the Minister is listening and will openly work constructively with me to amend the Bill and ensure that British defence investment is directed first to British industry, as well as carrying out a review of the contract for fleet solid support ships.

[Jeremy Quin]

I hope the right hon. Lady will welcome the fact that, as a result of the FFS award, we will see revitalisation of Harland & Wolff, we will have additional shipyard capacity and we will be rebuilding the British shipyards left in a dreadful state after the last Labour Government. We are seizing opportunities. It is unfortunate that we have to reskill some of our workers and that we have to use opportunities coming from abroad to ensure that we recreate another yard in the UK as well as supporting Appledore, but it is important that we have the right equipment for our armed forces and that defence can seize those opportunities.

[Angela Rayner]

I thank the Minister for that contribution, but he should put it in the Bill. He should work with us to ensure that we build in Britain and support British industry and the steel industry. We discussed earlier today the difficulties that UK industries face, and I believe this Bill does not go far enough to support our industries. I want to see that support and I will happily work with the Minister on that.

The Minister has also pledged to use this Bill to make procurement quicker, simpler and more transparent. We need look no further than the pandemic for the clearest example of why we desperately need a more agile and transparent procurement system. The Tory VIP lane exposed the true weakness in the system, enabling the shameful waste of taxpayers’ money and profiteering by unfit and unqualified providers.

As a result, the Government have written off £10 billion of public funds spent on unusable, overpriced and undelivered personal protective equipment. More than £700,000 a day of taxpayers’ cash is currently being used to store unused gloves, goggles and gowns—enough to pay for 75,000 spaces in after-school clubs or 19,000 places in full-time nursery care.

I am still waiting to see whether the Government will respond to our Humble Address and come clean about the murky case of PPE Medpro, which saw £203 million handed to a company with links to a Tory politician. Will the Minister use this opportunity to confirm whether his Government are still procuring PPE or other goods using the emergency rules enacted during the pandemic?

There is no doubt the pandemic presented a unique situation, placing huge strains on our procurement processes but, while all countries faced similar pressures and shortages, many countries conducted their emergency procurement in a far more open, effective and cost-efficient manner. The Government must learn the lessons of those mistakes, and what better opportunity than within this Procurement Bill?

I wait with anticipation to see how the Government might go about shutting down the VIP lanes, tightening the leash on Ministers’ freedom to award contracts directly and hard-wiring transparency into the system. Instead of straining every sinew to root out waste and cronyism, the Minister is pushing a Procurement Bill that would allow the same mess to happen all over again—handing more power over direct awards to Ministers, not less. I am sure the Tory party’s cronies watching these proceedings will be rubbing their hands with glee at a Bill that puts their VIP fast lane on to the British statute book. I am also sure that former Ministers from previous Conservative Governments, who grasped the opportunity to do the right thing and clean up politics after years of sleaze, will be disappointed by this Bill.

[Anthony Mangnall (Totnes) (Con)]

The right hon. Lady is making a point of saying that we are putting in a VIP lane. Where in the Bill does it say that? In fact, it does not. The Bill puts more oversight on the procurement rules to stop anything like what we have seen in the past ever happening again. If she could just point me to the clause, I would be very grateful.

[Angela Rayner]

Yes. Clause 41 allows Ministers to use urgency as a new justification for granting direct awards—directly allowing the VIP lane yet again. I ask the hon. Gentleman to look at the Bill and at exactly what that would mean for the future of our procurement. I am sure Government Members, including Ministers, will be disgusted at the billions of pounds that we have seen wasted through that process. I am willing to work with the Government to identify and close those loopholes.

[Jeremy Quin]

If life and public safety are at risk, does the right hon. Lady really think that there should not be an urgent procurement procedure—particularly one approved by this House—in that situation?

[Angela Rayner]

As I said to the Minister earlier, Wales and other countries had emergency powers to do things. It is our situation here that has seen the cronyism and the VIP lane in particular allowing the mates of Tories to get contracts without oversight. I do not believe that we need a system that allows billions of pounds of taxpayers’ money to be awarded to friends of the Conservative party. At the time, many businesses in the UK that had experience of working in that field were shunted out for people who had absolutely zero experience but who—guess what—knew the WhatsApp of a Tory Minister. That is completely unacceptable and the Bill does nothing to prevent it.

[Anthony Mangnall]

The right hon. Lady has taken one point and cherry-picked to emphasise it without looking at the rest of the Bill’s contents. That is why there is a transparency notice and procurement oversight of how we issue it. We are not giving anyone an advantage in our procurement opportunities; we are making sure that there is transparency and that mechanisms are there to hold people to account. Does she not see that?

[Angela Rayner]

I will come to chapter 3, which addresses transparency—although, again, I think it is unambitious. Look at what Ukraine does in terms of transparency; it is streets ahead. These are baby steps and are nowhere near enough. The hon. Member needs to look at the situation and at the Bill. It is not ambitious enough for the UK and does not prevent situations in which billions of pounds of taxpayers’ money is wasted, as we have seen under this Conservative Government. The only fast-track lane that Labour would allow would be one for local businesses and enterprises that create wealth in our communities and contribute to a fairer society. The VIP lanes under a Labour Government would be for local businesses bringing innovation and wealth to their neighbourhoods, so social value would be a mandatory part of procurement. I hope that the Minister will look at that.

The Bill also misses a crucial opportunity to introduce real and workable non-performance claw-back clauses to contract design. There are ways of baking such clauses into contracts so that failing providers must return taxpayers’ money above a certain threshold. The current system just is not working; eye-watering waste continues without consequence. Being granted taxpayers’ money is a privilege. When suppliers do not deliver—just as we saw with PPE Medpro—we want our money back, but under the current proposals there is no way of even checking a provider’s past performance. Again and again, local authorities fall foul of the same failed providers as their neighbours.

Can the Minister explain why he is not using the Bill to make past performance a central pillar of our procurement? When I go to a restaurant, I can see past customers’ reviews of the food. Should the same not apply to multimillion-pound Government contracts? The Green Paper mentioned a procurement unit, but that has since been removed and replaced with a vague concept of “procurement investigations”. That toothless proposal will do nothing to crack down on waste or protect taxpayers’ money. By contrast, Labour’s office for value for money, which would be advised by a social value council, would have real teeth to ensure that taxpayers’ money is spent responsibly with regular checks. I hope that the Minister will work with me to strengthen that aspect of the Bill.

I have mentioned chapter 3 of the Bill, which I think is another sticking-plaster solution that misses the opportunity to create real transparency in public procurement. Although I welcome the limited measures the Bill takes to move towards transparency—by obligating authorities to issue a transparency notice before awarding a contract, for example, which the Minister mentioned—those are baby steps that barely scratch the surface of what is required. We must see end-to-end transparency, which means the creation of a public dashboard for Government contracts.

Clause 95 gives an unnamed authority the power to make rules about what procurement information can be shared and through which channels. That is symbolic of the poverty of ambition on display from the Government. The Minister could have used this opportunity to announce a system inspired by Ukraine’s anti-corruption blueprint, a dashboard that guarantees transparency in how taxpayers’ money is spent and bakes trust and integrity into the system. Even under attack from Russia, Ukraine is honest about how it spends public money. What is this Government’s excuse?

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

The right hon. Lady may not be aware, but the Infrastructure and Projects Authority audits all major infrastructure projects across the whole of Government every year and grades them on a dashboard system, so we already have one.

[Angela Rayner]

I say to the right hon. Member that we do not have a system that works. That is pretty clear to me because we can see the disastrous waste that currently happens in the system, and because companies that should be rewarded with contracts are not, while others get around the system.

I think we should go further still by finally shedding light on the amount of taxpayers’ money being shelled out to tax havens. Labour will push for the Bill to introduce full transparency about whether suppliers pay UK taxes, as well as public country-by-country reporting by multinational corporations. A Labour Government would go further by using public procurement to drive up standards of responsible tax, including by asking big corporations and businesses publicly to shun avoidance and artificial presence in tax havens.

Transparency is not just a nice thing to have; it actually saves money. A lack of transparency in the procurement system reduces competition and increases costs, leaving the taxpayer to shoulder the burden, so the adoption of open transparent contracting makes good financial sense. It leads to a more competitive procurement process and, ultimately, to cost savings.

As I said earlier, being granted public money is a privilege, and suppliers should in turn uphold the highest standards in the workplace. The Bill is an opportunity to drive up standards across the economy and ensure that public procurement is used as a means to promote decent work throughout supply chains and to reward businesses that treat their workers right. We must back the workers and the employers who create Britain’s wealth by using procurement to raise the floor on working conditions for all. I hope that the Minister will engage openly in Committee with proposals to include good work and the promotion of quality employment as strategic priorities.

That brings me to outsourcing. This Government have become too dependent on handing away our public services on the cheap, and we are all paying the price. It is ideological and not based on sound service delivery. The Bill presents an opportunity to introduce measures to end the knee-jerk outsourcing trend and to ensure that, before any service is contracted out, public bodies consider whether work could not be better done in house. When I worked in local government, we coined the phrase “not outsourcing but rightsourcing”. That is what a Procurement Bill should facilitate.

The pandemic showed us that a decade of Tory Government had shattered the resilience of British businesses and services and of our local economies. Instead of handing out billions to British firms to deliver services, jobs and a better future, big contracts were given to Tory cronies and unqualified providers. The Tories eroded standards at work, encouraging a race to the bottom.

But it does not have to be this way. From the Welsh Government and London’s Labour Mayor to local governments in Manchester, Southwark and Preston, Labour in power is showing that things can be done better. What we need is a public procurement policy that the public can trust and that will make winning contracts a force for our country’s good. Not more sticking-plaster solutions but a Bill that will restore trust in the way public money is spent.

[Caroline Lucas]

I was trying to time my intervention for just as the right hon. Lady was finishing her remarks. Before she finishes, does she agree that one of the reasons why procurement is so brilliant is that it has a vital role to play in greening our economy? Again, the Bill does not go far enough on that. In particular, it does not include scope 3 emissions in supply chains, and the Government will not meet their own net zero targets unless they start accounting for those emissions. Does she agree that that is a big hole in the Bill?

[Angela Rayner]

Absolutely. I listened to the Minister’s response to the hon. Member’s question earlier, and it showed a lack of ambition. Those of us concerned about environmental factors, as we all should be, are also concerned that the Minister is not putting the necessary gusto into the Bill to ensure that those issues, including meeting the net zero targets, are really factored in. I hear a lot of words, but when it comes to the legislation that will enable us to do that, I do not see the practice being delivered. The next generation will hold the Government to account for the disaster they will be given if we do not act now. We know what the science says and what needs to be done, but this Bill does not do enough to ensure that it happens.

I want a Bill that will restore trust in how public money is spent, will have social and environmental factors in it, and will make British industry the best it can be so that workers in this country get the best they can get. I urge the Minister to use this opportunity to plough taxpayers’ money back into local communities so that we can make, buy and sell more in Britain, claw back our money when it is wasted, and outlaw VIP lanes once and for all.

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I give a gentle reminder of my advice that speeches should last no longer than eight minutes.

20:11

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Thank you, Madam Deputy Speaker; how tactfully you remind us about the eight-minute limit. What a pleasure it is to follow the right hon. Member for Ashton-under-Lyne (Angela Rayner), from whom we had a lather of indignation —it could have been an advert for Pear’s soap, so great was the lather. I might remind the right hon. Lady that there was a similar lather of indignation from Opposition Members when we were trying to order PPE at the beginning of the pandemic. They really ought to watch the replays on the Parliament Channel to see how furious they were and how hopeless they thought it was that the Government were not spending even more money and ordering even more PPE. We should bear that in mind when we consider all their criticisms of this excellent Bill, brought forward with such distinction by my right hon. Friend the Paymaster General.

What is the fundamental point of procurement legislation? It is a burden for industry and a cost for taxpayers and it makes it harder for small and medium-sized enterprises to get into the supply chain. The fundamental point of such legislation is to keep Government honest: there has to be procurement law to ensure that contracts are awarded properly and fairly. That is why the openness of the Bill is so welcome; there will be more detail not only in the pipelines but in the whole process of procurement.

However, there has to be a balance. Large firms can employ departments to fill out tenders. They can afford the cost of tendering and of putting forward the necessary documents, and they can afford the executive time because they have more executives. Small firms, on the other hand, find procurement extremely burdensome and complicated and it uses a great deal of executive time. A large firm will have a team that does it; the SME will be using the chief executive’s time. That is why the light-touch regime is one of the most important things about the Bill. It is not set out in the greatest detail in the legislation, but there will be the ability to enhance it and make it more available for SMEs.

The more SMEs are brought in, the better it is for taxpayers. SMEs will be lower cost. In a lot of procurement, the Government go to a large company that then employs the SMEs while taking a margin for doing so. That is a cost to the SME, which charges a lesser price, and to the taxpayer, who pays a higher price. The ability to go directly to the SME is a saving for the taxpayer and a better profit margin for the SME. That is fundamentally important.

[Jim Shannon (Strangford) (DUP)]

When covid-19 came in and the Government had to make big decisions, a number of SMEs in my constituency had the ingenuity, ability and process but were unable to get any Government contracts. Does the right hon. Gentleman feel that they would be able to do so with this legislation?

[Mr Rees-Mogg]

That is the main point of the Bill, along with moving away from the European approach that essentially favours big business. Also involved is an attitude of Government, for which we can praise the Cabinet Office—particularly Gareth Rhys Williams, who has been absolutely brilliant in running the Government’s procurement and saving billions of pounds for taxpayers. The issue is about not just law but attitude of mind. To answer the point made by the hon. Member for Strangford (Jim Shannon), the Bill will also make it easier for SMEs to be used by local authorities, which will know the local businesses and may know their reputations. That is an important easing.

I would like to see one easing more, although it may be difficult because of some of our international agreements, which may need to be changed. To my mind, it is quite unnecessary to include private utilities in this legislation. Private utilities’ motivation and risk appetite are completely different from the Government’s. Private utilities have shareholders who want value for money and they will award contracts to get the best value for money. They do not need bureaucratic procurement regulations to hang over them. There is scope within the Bill to remove more private utilities from the regime. I hope the Government will use that, both to extract them in future and ensure that the regime is as light touch as possible for private utilities. This is essentially another of the hangovers from the European Union that turned up in some of our international trade agreements because most European utilities are state owned. It is inappropriate and unnecessary for this country.

It may not surprise the House that I disagree with the right hon. Member for Ashton-under-Lyne on social value. Social value is in the eye of the beholder. The right hon. Lady may think that there is social value in trade union rights when it comes to procurement.

[Angela Rayner]

Hear, hear!

[Mr Rees-Mogg]

I got a cheer from the Opposition Front Bench! I rarely get those, but on this occasion I have. I think giving trade union rights is straightforward cronyism: it is giving money to your mates and ensuring that your mates, who then fund the Labour party, do better out of it. The Opposition like it, and I think it dangerous. No doubt they could think of examples of things I might be in favour of—say, putting into a contract free speech as a social value—that they think are not necessary.

Value for money is fundamental, and I am glad of clause 12(1)(a)—that heroic clause in this great Bill. The right hon. Lady called the Bill a sticking plaster—quite some sticking plaster, running to so many clauses over 120 pages. Elastoplast does not produce sticking plasters of that size, I do not think. The key to procurement must be value for money—it must always be that, because taxpayers’ money is being spent. It is not about “nice to do” things, worthy things or virtue signalling; it is spending other people’s money, which must be spent as well as it possibly can be.

Within that, there may be a case for supporting innovation. Perhaps the commercial decision will be to spend money to innovate and get future savings, so that may be an exception. But that is the only one I can think of, other than where the Bill is absolutely excellent: in excluding those who have behaved badly. They may be foreign actors—there are powers to exclude on national security grounds—or companies that have behaved badly. The issue is of fundamental importance.

I might touch on Bain, which has been excluded from Government contracts for its involvement in the most extraordinary state capture of the South African Revenue Service. Many of us will know about the scandals, fraud and corruption that there have been in South Africa. The Zondo commission looked carefully at what Bain had been doing and discovered that it had been instrumental in state capture. A company with a fine veneer of respectability was involved in facilitating corruption of the worst kind in South Africa. As the Zondo commission reports, more than 2,000 experienced people in the South African Revenue Service, including inspectors, were removed. The Zondo commission said that that facilitated organised crime.

It is only right that this country should be able to stop companies involved in bad behaviour abroad from applying for contracts here. That is made easier under the Bill. The response of Bain, when challenged on this, was particularly poor. It simply attacked the whistleblower, a brave man called Athol Williams, who had the courage to point out what was going wrong. That important benefit will help with national security as well as with probity in our system.

I am at your time limit, Madam Deputy Speaker. I even had an intervention, for which I probably got a bonus minute.

[Madam Deputy Speaker (Dame Rosie Winterton)]

indicated dissent.

[Mr Rees-Mogg]

Madam Deputy Speaker is a hard lady; she shakes her head.

Let me conclude by saying that this is a good Bill. It is a major step forward, it ensures value for money, it helps SMEs and it will make procurement better, more efficient and better for taxpayers. It is a Brexit bonus.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the SNP spokesperson.

20:20

[Kirsty Blackman (Aberdeen North) (SNP)]

Happy new year to you, Madam Deputy Speaker, and to everyone in the Chamber. Thank you for calling me to speak on Second Reading of the Procurement Bill.

I will take the tiniest bit of leeway at the beginning of my speech to thank my predecessor as the SNP Cabinet Office spokesperson, my hon. Friend the Member for Argyll and Bute (Brendan O’Hara), for his hard work in this role. He does not leave an easy gap to fill as he moves on to lead for us on international development, but I will do my best to learn as quickly as possible, and what better way than with the Second Reading of the Procurement Bill and the subsequent Bill Committee. That is not a joke—the Minister will be totally fed up with me by the time the Bill Committee has ended.

Both the SNP Westminster group and the Scottish Government have significant concerns about the content of the Bill as currently written. I am disappointed by how the Paymaster General put forward his views on the Scottish Government’s action, given that constructive discussion is going on about how best to amend the Bill. I hope he is going into those discussions in a more constructive manner than it sounded like from his tone at the Dispatch Box when he spoke about the views of the Scottish Government. Corrections need to be made before the legislation can be considered acceptable, because the Bill undermines the devolution settlement.

We have not tabled a reasoned amendment to the Bill on the basis that the Scottish Government hope they can resolve the issues with the UK Government. However, should the UK Government fail to fix the Bill, we absolutely will oppose the legislation at future stages. The Bill seeks to confer a power exercisable concurrently by UK and Scottish Ministers to implement the Government procurement chapters of the agreements with Australia and New Zealand by secondary legislation. Although the negotiation of international agreements might be a reserved matter, their implementation in devolved areas, such as Government procurement, is a devolved matter.

The correct constitutional solution would be to amend the Bill to grant the implementation powers solely to Scottish Ministers in Scotland—obviously not in the rest of the UK. If the UK Government refuse to make that concession, at the very least the Bill must be amended to require the consent of Scottish Ministers when UK Ministers act in devolved areas to implement international agreements. It is a vital issue of principle. Devolution must not be undermined every time a sitting Westminster Government fancy doing so.

The Scottish Government are working to resolve these issues with the UK Government, and that is why we have not tabled a reasoned amendment to reject the Bill, but I and my colleagues urge the UK Government to continue that work. They often claim that they want to work with the Scottish Government, and we want to ensure that this Bill is not added to the litany of devolution-undermining legislation that has been put through since Brexit.

We have further concerns about the Bill, and I hope the Minister will accept them in the constructive spirit in which they are meant. We believe that the UK Government must ensure that supporting environmental objectives is clearly and explicitly included in the Bill’s objectives. Those objectives should be compatible with the Scottish Government’s more ambitious climate change reduction targets. If the UK Government are to act in such a way on reserved matters, they need to take account of the fact that the devolved legislatures have different and more ambitious climate change targets.

[Robin Millar (Aberconwy) (Con)]

The hon. Lady referenced the devolution agreement, and she has just mentioned reserved matters. Can she clarify whether she is referring to the Scotland Act 1998 and devolution as set out within its terms?

[Kirsty Blackman]

Yes, I am referring to the devolution settlement and how devolution works. Within the Scotland Act, there are matters that are the competence of the Scottish Government and ones that are the competence of the UK Government. In that regard, the implementation of international agreements in relation to how public procurement works is a matter for the devolved legislature, and we would prefer that the UK Government recognised that, rather than giving a power in this Bill that could overrule that.

The Bill includes a discretionary exclusion group for environmental misconduct, but I am not clear why that exclusion should be discretionary. The UK Government are failing time after time to embed environmental objectives in legislation. They refused to do so with the Subsidy Control Act 2022 or with the creation of the Advanced Research and Invention Agency, despite the Opposition pushing them to include it. It is as if they are keen to have big headlines on climate change targets, but not actually to embed them and do the actual work, and not to put those targets where it matters, which is explicitly in legislation that this place is putting forward, without exclusions and without discretionary rules. It should be embedded in every single thing we are doing, because it is the most important issue for this generation and for future generations. The Bill must explicitly commit to taking environmental considerations into account when awarding contracts, and that should be a core consideration, not a pointless box-ticking exercise.

We welcome the retention in the Bill of the principles that underpin EU procurement rules: transparency, equal treatment, non-discrimination and proportionality. However, having the principles included in the Bill is utterly meaningless if they are not upheld. It is vital that the principles are practised. As was mentioned by the right hon. Member for Ashton-under-Lyne (Angela Rayner), the UK Government’s shambolic handling of the covid contracts is a stark reminder of the danger of not upholding these principles. Transparency International’s report on the public contracts awarded during the pandemic noted that critical safeguards to prevent corruption were suspended “without adequate justification” during the pandemic procurement processes. It also found “systemic bias” towards those with connections to the UK Government. The rush to try to get more PPE has already been mentioned. It was vital that PPE was procured; the issue is how that was done, which explicitly favoured those who had close links to the UK Government. That is not how it should have been taken forward.

We need measures in the Bill to ensure that the UK Government cannot unilaterally decide to suspend the safeguards and principles that are in place. The horrendous nepotistic waste of taxpayers’ money should not have happened once, and we absolutely cannot allow it to happen again. The opportunity should have been taken to include the measures put forward by my hon. Friend the Member for Midlothian (Owen Thompson) in his Ministerial Interests (Emergency Powers) Bill.

Lastly, but no less importantly, the UK Government should take this opportunity to ban malicious actors and organisations involved in human rights abuses from the supply chain. During the Bill’s passage in the other place, several peers tabled amendments that sought to cut companies responsible for or complicit in slavery, genocide and crimes against humanity out of the supply chain. That is a noble principle and it should be adopted regardless of circumstances. It is unfortunately necessary that this needs to be explicitly included, as products from companies with horrific records are widespread through UK procurement chains.

The UK Government have shown that they can, after delaying, dithering and being publicly shamed, remove Huawei from the UK’s telecommunications infrastructure, and there is no reason why they cannot do the same with other companies, such as Hikvision, which is directly involved in the Chinese Government’s detention of Uyghur Muslims. More than a million cameras from Hikvision are present in the UK and they are used by as many as 61% of public bodies. The US Government blacklisted it in 2019; the UK Government have not yet taken comprehensive action against this company, despite making clear that they are aware of the issue. The SNP would like to commit to working with others across the House who seek to protect the supply chain from harmful actors and ensure that public procurement does not work to enrich those who profit from crimes against humanity.

I look forward to the Public Bill Committee—I really do—and I hope we can hear evidence from those who are expert in public procurement. I have no doubt that we will table amendments to ensure that the Bill respects devolution, that human rights are protected and that environmental priorities are actually prioritised.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. My guidance is creeping down more towards seven minutes.

20:29

[Alicia Kearns (Rutland and Melton) (Con)]

I welcome much of this Bill, in particular its support for small and medium-sized enterprises, but I wish to focus my comments on national security concerns. Geopolitical and geo-economic competition has upended our traditional supply chains, while the actions of hostile states who are industrialising path dependency require us to think more strategically about public procurement. Equipment used by our police forces, hospitals, Departments and local councils are providing hostile states with a back door into our security and forcing dependency on these malign actors and the states who produce them.

As the Minister rightly pointed out from the Dispatch Box, this Bill gives us the opportunity to meaningfully put resilience at the heart of this Government’s effort. We cannot risk insufficient action now because it will hurt us in the long term, as exfiltration is far more costly and complicated than putting in place the right measures now.

For too long, we have allowed the public sector to outsource basic components that make up our everyday security to companies and countries with malign intent. All of us will recall the debates about stripping Huawei from our 5G telecoms network, which took too long but was the right thing to do. The problem is, we face Huawei-level decisions on a range of security measures and it relies on MPs becoming aware of these companies and this risk for there to be a meaningful debate about it, which cannot be the right way to deal with it.

There are tens of examples that could be raised, whether it is DJI drones, which are used by our police forces across Britain, or Hytera body cameras, which film what police officers can see. The likelihood is that what is seen by every police officer entering the home of a constituent in Rutland and Melton could be sent back to China. The risk is so strong that Motorola has created technology to intercept that technology and prevent the data from being sent back. My priority is protecting the data of British nationals—our faces, our gaits, our walks, how we use our mouths and how we communicate—because China wants this data. That is why it is buying up gay dating apps and why it owns TikTok. It is our data that will allow it to have supremacy over us as we go forward and make us vulnerable. The Chinese Communist party is seeking to build a tech totalitarian state, and that requires the data of those around the world. At the moment, British taxpayers’ data and money is enabling that.

We have to update the rules. Over the weekend, there was a story about tracking devices found hidden within Government cars. Our data is important because it reveals not just the locations we go to in our cars, but our friends and networks, our vulnerabilities, habits and activities, which allows us to be threatened, blackmailed, undermined or tracked. If these cellular IoT nodes—called SIM cards in the media—were duplicitously installed, then that is CCP espionage. It is more likely that these are standard technologies that are installed in all cars. That shows why this Bill is so important, and why we need national security considerations. At the moment, we all have constituents driving around with these cellular IoT modules in their cars; any of those individuals could be pinpointed if they drove near a secure site and were then tracked by the Chinese Government. The Chinese Communist party would then know where they live, how they live their lives and what they do, and they would become vulnerable.

The Chinese Government could quite easily work out who the Prime Minister’s security team is by looking at the cars that travel out of No. 10 and then go back to the Prime Minister’s house all the time. They could then track those security officers to where they are doing recces for future visits, and then they will know where our Prime Minister is travelling to. They could do that to any of us if they wanted to make us vulnerable.

The problem is that 50% of all cellular IoT modules are made by three companies: Quectel, Fibocom and China Mobile. These are three Chinese companies that cannot be trusted. There are alternatives, but businesses are choosing to save pennies on the pound in order to protect their businesses rather than do what is right, which is making sure that small tools such as these modules are removed, thereby protecting the data of British nationals.

There is, without question, a balance to be struck within British procurement. We have to get value for money for taxpayers. However, the purchasing of cheaper equipment—quite often state-subsidised by hostile powers—is a dangerous false economy because it produces that path dependency that I have set out.

When the Cabinet Office last year rightly advised public bodies to sever contracts with Russian and Belarusian suppliers, the lack of legal provisions to do so meant that any meaningful attempt would actually result in a serious breach of UK law. I ask Ministers to rectify that when they look at the Bill.

The flaws in our procurement system severely undermine not only our security at home, but our ability to stand up for human rights around the globe. The Foreign Affairs Committee has found that the same Hikvision cameras that guard our council buildings monitor and enable Uyghur internment camps where we know that genocide is being industrialised. It is morally unacceptable that we choose to use a surveillance system that actively racially profiles Uyghurs within our own systems. It is tantamount to facilitating genocide, because we are funding the Chinese Government and enabling them to continue to do what they do. We know that they are guilty, yet we are saying that we will remove those cameras only from sensitive sites. It should be from all sites, particularly when there are alternatives.

My asks of the Government are as follows. I met with Cabinet Office officials last year, and again this morning with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart)—I am grateful for his time—and we need clarification. First, on the debarment list that is created to exclude suppliers from procurement contracts, with a procurement review unit to lead investigations, who will have ministerial discretion over who appears on the list? Will we have proactive powers to hunt down these companies to ensure they are on the list, or are we going to wait for MPs to have the information handed to them so that they can stand up and raise it?

Secondly, we must ensure we do not end up in a relentless whack-a-mole trying to hunt down the companies responsible for such things. We need to focus on the components within sensitive industries or sensitive items, and to ensure that any public body procuring such components or companies within relevant industries must come to someone for a second review. That means we are not attacking a specific country and saying China’s products are bad or saying that certain companies are awful; we are doing due diligence in sensitive areas. That is why we need a SAGE-style committee on public procurement specifically looking at national security.

Thirdly, has the Secretary of State drawn up a list of priority sectors that we can deal with when the Bill passes into law? Finally, what assurances can the Secretary of State provide for how local authorities will be able to check with the Government whether a provider is on the debarment list? At the moment I have local authorities from around the countries writing to me saying, “Alicia Kearns, can you please give me advice on whether or not we as the local council should procure from this company?” That cannot be the way we do this. We must ensure local government is not the entry point for hostile states.

Finally, on supply chains, public authorities need to be able to investigate, and we must ensure that this goes high enough up the chain. Canadian Solar is looking to build a solar plant in my constituency. It sounds lovely—“Canadian Solar? What a great company”—but when we actually look into it, it is GCL-Poly, a Chinese-owned, Chinese-run company that is complicit in Uyghur genocide. We must ensure that the burden to investigate is properly addressed.

On that point about human rights and genocide, I recommend to the Minister that we look at the International Criminal Court’s Rome statute so that, again, we have explicit, grounded-in-law ways in which to determine whether certain countries should not be allowed to provide things to us, so that we are not looking to make complicated determinations of genocide. Again, that is where a SAGE-style committee could come in use.

All in all, I urge the Government to seize the initiative. There is so much we could do on national security that I cannot fit into seven minutes, but my door is open for further discussions. I hope that my speech sets out in brief just some of the asks. This Bill could be transformational for protecting our people and their data in the long term and for protecting our children’s futures.

20:37

[Nick Smith (Blaenau Gwent) (Lab)]

I welcome this Bill’s aims of openness, effectiveness and transparency. A third of public expenditure—£300 billion—goes on public procurement, so we must get this right. Unfortunately, though, the Government’s record here has been undermined by the PPE scandal. I do understand that exposure to fraud was a risk during the panic of the pandemic and that the global PPE market was highly competitive. However, big mistakes were made, and billions have been wasted.

The National Audit Office has done brilliant work on tracking the Government’s covid spending. Its investigation into the management of covid contracts in March 2022 found that 46 of the 115 contracts awarded to the Government’s VIP lane did not go through the Government’s due diligence process. That meant that the Department for Health and Social Care could not fully understand the contract management risks it was exposing itself to. Therefore, the sheer scale of Government waste is not just explained by global markets pressures; the UK Government’s failures must also be acknowledged. After all, the PPE scandal has seen £4 billion of taxpayers’ money wasted on unusable equipment and now £2.6 billion-worth of disputed contracts.

I am specifically concerned about contracts awarded to Unispace Global Ltd, which won more than £600 million of PPE contracts during the pandemic. It is extremely difficult to follow the financial paper trail: a look at its manoeuvres, and the chopping and changing of its directors, raises big questions. For example, payments from the Department of Health and Social Care were made to Unispace Global Ltd, but in 2021, it transferred its contracts to a new company, Unispace Health Products LLP, which now trades as Sante Global LLP. Private Eye says, however, that the companies’ accounts do not feature anywhere near the £600 million paid to them, which begs the question: why this chicanery? Will the Bill deal with such shenanigans?

I welcome the introduction of a single central Cabinet Office online platform—that is quite a mouthful—but it should go further and include a publicly accessible dashboard for Government contracts. In that way, we can track delivery and performance, make contractors truly accountable to the people, and close the loopholes that profiteers enjoyed. The British people also deserve to know the profits, commissions, dividends and big bosses’ bonuses being made on the back of public money.

We need measures that financially penalise those who benefited from the public contractors’ PPE super-profits, but when a company changes its identity multiple times, that is made much harder, and the other route—recovering money through the courts—is very expensive and hugely time consuming. What measures will the Government bring forward to deal with those PPE profiteers and their like? We need a Bill that mandates open accounting of public contracts and shines a light on the vultures that prey on the public purse. We need a Bill that allows us to properly follow the money.

14:30

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

As a former Defence Minister, I will confine my remarks to the Defence-related aspects of procurement, which feature multiple times in the Bill, particularly in parts 1, 2 and 4. The United Kingdom’s system of Defence procurement is broken. That is the considered opinion of the all-party Public Accounts Committee, on which I now serve, which concluded in its 2021 report, “Improving the performance of major defence equipment contracts”, that,

“The Department’s system for delivering major equipment capabilities is broken and is repeatedly wasting taxpayers’ money.”

The Government’s auditor, the Infrastructure and Projects Authority, audits all major infrastructure programmes from HS2 downwards. It produces its findings each summer, in which it grades each project on a traffic light or dashboard system. The definition of a red project is that,

“Successful delivery of the project appears to be unachievable.”

Amber projects are those where,

“Successful delivery appears feasible but significant issues already exist”.

In its latest report of July 2022, the IPA audited 52 of the largest MOD procurement programmes from Dreadnought downwards, which total more than £80 billion of British taxpayers’ money. Of those, nine projects were rated red or unachievable, 33 were amber where significant issues already exist, seven were classified on national security grounds, and only three were rated green, whereby,

“Successful delivery of the project on time, budget and quality appears highly likely”.

I submit to the House that a system where barely 6% of our new major Defence programmes are judged to be confidently on track is indeed a truly abysmal record and fully in keeping with the PAC’s verdict of a “broken” system.

In a similar vein, in March 2021, the Defence Committee published a hard-hitting report, “Obsolescent and outgunned”, which highlighted that in two decades, the British Army has not successfully introduced a single new major armoured fighting vehicle into service. As it powerfully concluded:

“This report reveals a woeful story of bureaucratic procrastination, military indecision, financial mismanagement and general ineptitude, which have continually bedevilled attempts to properly re-equip the British Army over the last two decades.”

The biggest scandal in this sorry tale is that of the General Dynamics Ajax armoured reconnaissance vehicle which, after 10 years and the expenditure of over £4 billion of UK taxpayers’ money, has still not resulted in a single new vehicle entering frontline service, for which the MOD is even now unable to provide a definitive date. Even if it could, the future communication system on which the highly digitised Ajax would rely, called Morpheus, is still many more years from entering service. The lead contractor on the Morpheus evolve to open project is General Dynamics, the same prime contractor as for Ajax. Last year, the Defence Secretary commissioned Clive Sheldon KC to conduct an independent inquiry into the flow of information surrounding Ajax, including to Ministers, which is due to report very shortly. I suspect it may well prove uncomfortable reading for some of those who were working on the Ajax programme.

To take another example of a red programme, it has taken nearly seven years to integrate an airborne early warning radar into a Merlin helicopter to provide air defence coverage for our aircraft carriers—a project called Crowsnest. In stark contrast, during the 1982 Falklands war, we integrated an earlier version of the same radar into a Sea King helicopter in just over three months. This is just one more example of how ponderous, bureaucratic and inefficient our procurement system has now become.

One associated area that is also desperately in need of reform is the procurement of the maintenance of accommodation for service personnel and their families. The future defence infrastructure services—FDIS—contract, which went live earlier this year, is an utter shambles. Complaints about mould, lack of heating and multiple contractor visits, which still failed to carry out basic repairs, such as fixing broken boilers, have appeared in numerous media outlets in recent months. We cannot carry on like this. Our service personnel and their families deserve better. I understand that Defence Ministers may now genuinely be considering terminating the FDIS contract and seeking alternative arrangements. I co-authored a report for a previous Prime Minister on military retention—entitled “Stick or Twist?”—three years ago, in which we suggested establishing a bespoke housing association instead. Whatever solution Ministers now finally adopt, I earnestly hope they will stop reinforcing failure via FDIS and opt for something successful instead.

In summary, the Public Accounts Committee was right: our system of defence procurement is broken, and it is going to take much more than this Bill to fix it. With a war under way in Ukraine and the Government’s integrated review being updated as a result, there is now an opportunity to put right these weaknesses in our defence procurement process, which are deep-seated and have taken place, it must be said, under Governments of both colours for many years. We certainly need to increase our defence spending, but we also need to spend what we allocate for defence much more efficiently as well. This system is crying out for an extremely thorough analysis to be subsequently followed by dynamic reform. We cannot let this go on much longer. Our national security depends on it, and if hon. Members do not believe me, then perhaps ask a Ukrainian instead.

[Mr Speaker]

We now come to a maiden speech. I call Samantha Dixon.

20:48

[Samantha Dixon (City of Chester) (Lab)]

Thank you, Mr Speaker. I am genuinely delighted to be speaking in this important debate.

As a former leader of Cheshire West and Chester Council, I am proud to have a strong record of putting the principles of social value at the heart of public spending. These values look for benefits to society, the economy and the environment. When they are aligned with good fiscal management, local people get more for their money.

The Northgate development in Chester is a central regeneration project in the heart of Chester city centre. The council on which I have served since 2011 was the main driver for this exciting project. Indeed, I was proud to see the new public market open in November, with nearly half a million customers already through the door. In delivering this project, we have squeezed every last penny of value from every pound spent not just to deliver the project itself, but to deliver 435 weeks of apprenticeship opportunities, 13 education events, 12 work placements, 43 training weeks, 64 employment activities and more than £22 million-worth of expenditure in the local economy.

On top of that, construction workers raised money for local homelessness charities; there were donations to the local food banks; Chester football club—a fan-owned, community club—had its car park upgraded; and many students from local schools and colleges gained valuable industry insight from being involved in a live and local construction project. Even the sandstone excavated from the drainage tunnel ended up being recycled in the rhinoceros enclosure at Chester zoo. This is how we do business in Chester. Social value is highly important and an opportunity to make, buy and sell more in Britain. Chester has shown that that makes a difference to local communities and can be done in the right way. These communities are at the heart of Chester’s identity and I am now honoured to represent them as their Member of Parliament.

Chester has a long and complex history that attracts visitors and businesses to the city and makes it a fascinating and beautiful place to live. Chester was founded by the Romans in AD79, due to its strategic advantage given our geographic location on the border with Wales and on the banks of the River Dee. An integral historical feature which Cestrians use to this day is the city’s walls. Many places in Britain are walled but only Chester has a complete circuit. They are about 2 miles long and have over millennia been constantly altered, repaired and sometimes attacked. Indeed, as my hon. Friend the Member for Weaver Vale (Mike Amesbury) mentioned recently, “The only red wall in Chester is the Roman wall.”

As an aside, a breach of the walls by parliamentarians during the siege of Chester in 1645 has been commemorated in Lego by our local blogger and champion of all things Cestrian, Tony Chester. His magnificent Lego display of Chester through the ages will soon be a key feature in the previously mentioned newly opened market.

These days, our city is a thriving and vibrant place characterised by excellent hard-working retailers, traders, restaurateurs, publicans, and visitor attractions such as Chester zoo and the Deva Roman Experience, who are all committed to the future of our city. I am determined to help Chester to weather the current economic storm and make our city a top retail and tourism destination. This commitment is one of five I have made to the people of Chester that I intend to keep now I am here as their elected representative.

I want to restore frequent, reliable buses and trains to keep our city connected to the wider country, and I want to return to neighbourhood policing with more officers on the beat in our communities. Most of all, I want to stand up for our city and end the cost living crisis which is badly hitting many people living in Chester.

The River Dee, the reason why our city is where it is, has been well used over centuries, whether for industry, recreation or sport. Indeed, the river hosts the oldest rowing regatta in the world, celebrating its 290th anniversary this year. It is a busy and important part of our city and the reason I will be working so hard to end the practice of dumping raw sewage into it, as is currently permitted.

In other sporting news, Chester has had a football club since 1885. Currently playing in the national league north, the club has always fulfilled an important role in our community. Since 2010, the club has been a supporter-owned co-operative with elected directors, hundreds of volunteers and thousands of members. Chester FC is currently enjoying some success under a talented young manager, Calum McIntyre. The club motto is “Our city. Our community. Our club”, and that is being realised through a set of principles and values based on a mission to create a successful team and bring wellbeing and cohesion to our city, and to do it without ever going into debt. The club reflects and is a prime example of the importance of social value; I wish the club continued success.

I first visited the Houses of Parliament when I was a sixth-former at Christleton High School. The visit was hosted by Peter Morrison, the first member of Parliament for the City of Chester I can remember. His successor was Gyles Brandreth, whose candidacy, I recall, was announced on red nose day prior to the 1992 general election. His spell as the city’s MP was characterised by his good humour, something which continues today as he serves as chancellor of the University of Chester.

In 1997, the people of Chester elected the city’s first ever woman Member of Parliament, Christine Russell. She served our city well for 13 years and continues to do so in many roles across the constituency. She remains a good friend and mentor to me. Her successor, Stephen Mosley, served the city for five years and contributed much to parliamentary life through his role on the Science and Technology Committee. My predecessor, Christian Matheson, was also widely acknowledged throughout the constituency for his hard work on behalf of many residents and stakeholders. I am honoured to follow in all of their footsteps.

Chester, as beautiful, unique and historic as it is, has always masked significant levels of inequality. A commitment to improve the lives of others has been a thread throughout the years and the work of my predecessors.

Our city has a popular and thriving university that sees students from across the globe choosing to come to study in Chester. Our university trains many of the nurses, midwives and healthcare professionals who serve our community so well in association with our local health trusts. Along with our excellent schools and their hard-working teachers, and our superb police officers and firefighters, as well as the first-rate officers of the council, Chester is served by many fine public servants.

As we reach the tail end of winter, the struggles that our communities are facing are not easing. The current economic climate makes it more important than ever to create a transparent procurement system; one with social value and public interest at its heart and which will support suppliers who act ethically and create high-quality jobs.

Chester was a pioneer for social value in that, 21 years ago, our city became the very first Fairtrade city in the country. I am proud that in our city we live and breathe the principles of social value. Most importantly, I am honoured to have been elected to serve the people of Chester, and I will work hard for them every day. I have lived in Chester for nearly all of my life. It is where my home is and where my heart is. I want the very best for my city, and I promise that this Chester woman will be a determined and dedicated public servant for those who voted for me and for those who did not. I will be an MP for all the people of Chester. I look forward to serving them here in this place.

20:57

[Harriett Baldwin (West Worcestershire) (Con)]

It is an absolute honour to follow such an assured maiden speech from the hon. Member for City of Chester (Samantha Dixon). She spoke with great confidence and great experience of the subject at hand. She painted a beautiful picture of her city, and I am sure that that was the first of many excellent contributions that she will make to our debates.

I put my name down to speak in the debate because it struck me that procurement is so tied to what is our biggest economic problem: the cost of living and the rate of inflation. The questions that I want the Minister to respond to in his closing remarks are about that rate of inflation and how the transparency and openness of the new procurement system can help by bringing down the price that the Government pay at all levels for the contracts they award.

I draw the Minister’s attention to the situation in Ukraine—no, not the one that occupies the headlines, but a little-noticed development in 2016 that was very much supported at the time by the UK, along with Transparency International: the development of its procurement system, known as ProZorro. It is quite a remarkable platform. It is open source and shows every opportunity that exists in Ukraine to bid on contracts. It is completely open to citizens and civil society to look at all of the data on what is being tendered for and at what price companies are successful in bidding for those contracts. It is an extraordinary example of how public procurement can be transformed by openness and technology. If he has not done so already, I urge him to ask his officials if they could give him the opportunity to look through the ProZorro system used in Ukraine. It has done an enormous amount to reduce the cost of procurement over the years and to increase transparency for citizens.

The second public economic priority that the Bill helps to support so much is innovation. The openness and transparency of the procurement system will give small businesses—this has been mentioned a few times in today’s debate—much more of an opportunity to see what there is in the pipeline of public procurement. Again, I wonder whether I can ask the Minister to reply on this point in his closing remarks. In terms of innovation, one of the factors that small businesses often cite to me—and to other colleagues, I am sure—is that when they put their tender in for a public procurement, very often they are required to provide at least three full years of financial records. That can act as a very insidious way of reducing the ability of newer businesses and more innovative businesses, and perhaps nimbler and less expensive businesses, to participate in public procurement. I urge him to think about how the qualification process might enable some of the start-ups we really want to succeed to get into the pipeline of public procurement as easily as possible.

My finally question echoes some of the excellent points made by my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) on the importance of defence. I want to ask about the single-source procurement regulations, with which I know the Minister will be intimately familiar, and recognise the fact that in those procurements the Government are, obviously, dealing with one supplier. What thought has he given to then requiring the single-source supplier to procure more in a more innovative way from down the supply chain, and in a way that would not compromise national security, which of course has to be paramount?

With those short remarks, may I say once again what an honour it has been to be in the Chamber for the maiden speech of the hon. Member for City of Chester?

21:02

[Mick Whitley (Birkenhead) (Lab)]

I commend my hon. Friend the Member for City of Chester (Samantha Dixon). I hope her nerves have settled after an excellent speech. I thank all my hon. Friends for their eloquent contributions to today’s debate. I hope the Minister recognises there is a real appetite on the Labour Benches to work constructively with the Government on this issue.

Colleagues have rightly drawn attention to the ways in which the Bill risks enshrining in law the kind of cronyism we saw run wild during the pandemic. In the short time available to me, however, I want to speak specifically to the issue of social value and how recent developments in my constituency illustrate the urgent need for reform of our broken procurement regime.

When metro Mayor Steve Rotheram announced that the Liverpool city region combined authority would be commissioning the first new Mersey ferry in over 60 years, there was a widespread belief that it could only be built at Cammell Laird shipyards in my constituency of Birkenhead. What could be more fitting than for such an iconic Merseyside institution to be built on the banks of the Mersey itself? And what a difference the multimillion -pound contract would have made to the lives of my constituents, securing high-skilled work for years to come and guaranteeing additional investment in skills and training.

But soon enough those hopes were sunk by the cold reality of today’s procurement landscape. Cammell Laird could not compete on price against the likes of multinational giants like Damen. No matter how much the metro Mayor might have wanted to see the Ferry built in its entirety on Merseyside, he found his hands tied by onerous procurement rules enforced by central Government. As a result, the construction of the ferry is now set to be split between Cammell Laird and a Damen shipyard in the Balkans, with much of the most high-value labour likely to be offshored abroad.

My constituents were badly let down by a failed procurement regime that failed to take wider social, economic and environmental considerations properly into account. The news, only a week later, that the Ministry of Defence had awarded the contract for the new fleet solid support ships to a Spanish-led consortium made the blow even harder to bear.

Ministers have stated time and again that they intend to reaffirm value for money as the foundational principle of their procurement strategy. No one in this House is arguing for anything other than delivering the highest value for taxpayers, but that must also mean recognising the extraordinary potential for public procurement—which accounts for £1 in every £3 that the Government spend—to promote British businesses, boost job creation and drive investment in communities such as Birkenhead. For too long, communities across the country have missed out on the benefits of billions of pounds of public spending: one in six procurement contracts are now awarded to companies with links to tax havens, while the number of SMEs winning Government contracts is falling year on year.

This Bill was an opportunity to put right the mistakes of the past. Ministers had the chance to strengthen the Public Services (Social Value) Act 2012, give contracting authorities the flexibility they need to do their best by the communities they serve, and enshrine social value at the very heart of a new, progressive procurement regime. But there is not a single mention of social value in the Bill. Instead, Ministers are promising to expand on their plans to maximise social value in a national procurement policy statement with no statutory footing. If the Government are as committed as they claim to be to supporting critical industries such as shipbuilding, why does the Bill not contain a social value strategy?

The simple truth is that when it comes to supporting British businesses, the Bill is desperately lacking in ambition. For all the talk from Government Members about seizing post-Brexit opportunities, all the Bill really has to offer is more of the same—more of the giant multinationals treating this country as a cash cow while forcing home-grown British businesses out of the competition, and more public money piling up in tax havens while domestic industry struggles to survive one of the bleakest economic outlooks in recent history.

I recognise the need for a major overhaul of our national procurement regime. In the hope of achieving meaningful improvements to the Bill, I will not vote against it this evening, but if the version that returns on Third Reading does as little for the communities and businesses that I represent, I will be forced to think again.

21:07

[Anthony Mangnall (Totnes) (Con)]

I congratulate the hon. Member for City of Chester (Samantha Dixon) on her fantastic maiden speech. I wish I could have delivered mine with the same level of confidence. She gave us a rapid tour through the history of her city and expressed her desire for it to be a hotspot for tourists from across the country; she will certainly find many colleagues across the House to support her in that endeavour. I wish her luck in this place.

It is an absolute pleasure to follow my friend the hon. Member for Birkenhead (Mick Whitley), a fellow member of the International Trade Committee. I would like to make a few remarks about trade and ask for some clarity. I agree with him about the necessity of harnessing the power of public procurement and using it to the advantage of businesses of all sizes across the country. I might also point out that it has huge value in the free trade agreements that this country is signing. Global Britain is about signing new trade agreements. The Trade (Australia and New Zealand) Bill, which is working its way through the other place, deals with the very issue of procurement. It offers new opportunities not only for other countries to bid into our system, where we wish them to do so, but for our own businesses, large and small, to bid into procurement programmes around the world. Importantly, the more practised they are with our systems, the more accustomed they will be to foreign programmes and procurement processes.

A lot of Opposition Members have made comments about national security and asked why bigger companies are not doing more in the UK to build our defence systems. Helpfully, I hope, I might just point out that if we include SMEs—there is a very large contingent of small and medium-sized enterprises in the defence sector, and the Bill is about helping SMEs—we are thereby helping small businesses in the defence sector to build the systems that we need in this country to keep us safe and protected.

It is essential to be aware that the Bill, in its entirety, also creates a platform to exclude businesses that have previously performed badly. It gives authorities the opportunity, when looking at future contracts, to say, “These businesses have not performed—we are therefore able to exclude them.”

Much has been made of the social value point, and I think we have to be careful in this regard. If we are too precise, we will block out businesses; we will encourage bigger businesses that can throw more money at the issue, and exclude the very small businesses that we want to be able to help through the Bill.

I welcome the Bill because it is trying to achieve something that needs to be achieved: reducing bureaucracy. It seeks to repeal the Utilities Contracts Regulations 2016, the Public Contracts Regulations 2015, the Concession Contracts Regulations 2016, and the Defence and Security Public Contracts Regulations 2011. It is truly a wonderful day when we see a Government actually taking away pieces of legislation and trying to introduce new, streamlined laws that will help small businesses. Indeed, the Government are going even further: 350 individual regulations from EU directives are to be repealed. The Bill will make it simpler and easier for businesses of all sizes throughout the United Kingdom to bid in through a single, uniform framework for public procurement. That is its core and essence.

However, I have a few questions for the Minister. Are we making the public bidding process understandable to small and medium-sized businesses while also protecting the taxpayer, and will we be providing the national and local services that will ensure that procurement projects and processes are delivered? With that in mind, may I ask—in the context of clause 27 and the other clauses relating to exclusions, including clause 29, which concerns national security—what impact the Modern Slavery Act 2015 would have on the Bill, in respect of clause 65? Would Huawei, which has already been mentioned, be placed immediately on the debarment list? My hon. Friend the Member for Rutland and Melton (Alicia Kearns) referred to Hikvision. Would it be on the list as well, given the evidence that has been presented across the western world about its engagement in relation to the Uyghurs? What is the timeline for the exclusion of businesses that are put on the debarment list?

I would also like some clarification on clause 63. We talk about the speed of appeal and how we might put a business on the debarment list, but what happens if there is an ongoing investigation of a business while a local authority tender is out there, and the local authority decides to choose a business that is under investigation by the Government, by a Minister or by an authority, and has yet to preside over that issue? Would the local authority be made aware of the ongoing investigation, and would there be an impact on the tendering process if the business could not be given access to what was going on?

I think that clarification of those issues would provide a small amount of extra reassurance. Introducing a centralised system of information about businesses that have performed well, making local and other authorities aware that businesses have been debarred, is clearly sensible, but what provisions are there to prevent companies from renaming themselves and coming back for a second bite at the cherry, perhaps with a different local authority or a different individual at the head of the company? That is another small point that I think requires clarification.

I have already mentioned our signing of the landmark Australia and New Zealand trade deals, which open new markets for businesses around the world. Following the point made by my hon. Friend the Member for Isle of Wight (Bob Seely) about China, may I ask whether any consideration has been given to excluding non-signatories to the World Trade Organisation’s agreement on Government procurement? Given that that may shake the Government a little and cause them a bit of fear because it may exclude some more friendly countries—other than China—perhaps we should consider excluding countries that have not signed the agreement, perhaps those with whom we have not signed free trade agreements. That would allow us a way through without our offending any countries with which we have signed, or wish to sign, free trade agreements.

The Bill presents us with a huge opportunity to sign new trade deals and use them to advance British businesses at home and abroad, but also to consider how we can get locally produced food into our schools and hospitals, and how we can provide smaller, tailored contracts to help people boost their businesses and ensure that there is value for money. I welcome the centralisation, I welcome the structure, I welcome the repeals, I welcome the opportunity for SMEs, and I welcome the transparency that the Bill provides. If we can get this right, we can cut the Gordian knot that has been procurement in this country and, once and for all, create a streamlined system that will deliver value for money and opportunity for businesses of all sizes.

21:14

[Sarah Olney (Richmond Park) (LD)]

The Liberal Democrats support the Government’s stated ambition in the Bill of speeding up and simplifying the procurement process and creating greater opportunities for small business to access public contracts. However, the Bill could be improved on a number of points. It is important that we get this right, especially at a time of straitened public spending and a cost of living crisis. It is fundamental that Government and Parliament are seen to be taking every care possible with taxpayers’ pounds. We have seen the recent shambolic procurement of PPE and the resulting scandals. I do not think the public currently have confidence in the Government’s ability not to waste money or to create value for local communities. As it stands, the Bill does not align procurement to our environmental and climate goals.

The Bill as originally drafted by the Government included a huge carve-out for the NHS. It was originally proposed that instead of following the procurement regime provided for in the Bill, the Secretary of State for Health would be able to make up their own rules for huge swathes of NHS procurement by secondary legislation. I am pleased that Liberal Democrats in the Lords amended the Bill to ensure that the NHS would be brought into scope. It is important that we maintain that amendment because NHS spending accounts for such a large amount of public procurement. It would be absurd for it to be excluded. I would like the Minister’s assurance that they will maintain that Liberal Democrat amendment in the Bill.

NHS procurement is the most recent example of the most egregious failures of public procurement. The bypassing of the usual procurement rules via VIP lanes saw £3.8 billion of taxpayers’ money handed over to 51 suppliers of PPE, many of whom were closely tied to Conservative Ministers and their friends. We have had months of allegations about PPE Medpro, and today we have heard that SG Recruitment was handed a £50 million contract after being referred by a former Conservative party chair.

The Government will be resistant to some of the rhetoric around VIP lanes, but I urge them to look at the work of the Public Accounts Committee, of which I am a member. We have done extensive inquiries into PPE procurement over the last few years and have found a number of failings that cannot be excused by the urgency that we all accept was a key factor of that procurement. The Public Accounts Committee found that at no stage was any consideration given to

“potential conflicts between individuals making referrals through the VIP lane and the companies they were referring.”

It was therefore not surprising to see reports emerge of excessive profits from PPE contracts and confirmation of such conflicts of interest. The Government really must address that; the public will expect it if the Government are to live up to their stated ideals of transparency. The Prime Minister was apparently “absolutely shocked” to read of the allegations against Baroness Mone. We should attempt to save him from future such alarm. The Liberal Democrats tabled an amendment in the Lords to ban VIP lanes, which was voted down by the Conservatives, but I urge the Minister to reconsider.

I want to talk a little about social value, which gives me an opportunity to welcome the hon. Member for City of Chester (Samantha Dixon) to her place and to congratulate her on an excellent maiden speech. She summed up what social value is, in an excellent description of what it means in the city of Chester. I very much disagree with what the right hon. Member for North East Somerset (Mr Rees-Mogg) said about social value being in the eye of the beholder. I do not think that is true.

The hon. Member for City of Chester described extremely well what can be done when public procurement is used to attain a number of different social outcomes. The danger of not providing specific examples or definitions of social value in the Bill is that procurers will default to a definition of purely financial value. That would be a huge mistake and lead to a huge number of missed opportunities. I urge the Government to look again at the drafting of the Bill to enable it to unleash opportunities for charities and social enterprises to innovate in public service delivery, and to ensure that local communities are the key beneficiaries of an improved procurement regime.

The National Audit Office and the Environmental Audit Committee have found that departmental public procurement lacks consideration of net zero and environmental goals. We need a procurement system that encourages businesses to move their supply chains to a more sustainable model, but the Bill is just another piece of legislation introduced by the Conservative Government that fails to show the ambition that is needed. It is essential to have objectives that commit the Government to sustainable procurement as part of the net zero goal, and those should be included in the Bill. I hope the Government will look again at that.

The Liberal Democrats support efforts to reform to our procurement regime. We want to increase transparency and create opportunities for small businesses, but as it is currently written, the Bill will not achieve that. It fails to put an end to VIP lanes, it fails to grasp the opportunities for a system to create social value and it fails to support the Government’s own stated net zero goals. However, I am glad that the Government seem already to have acknowledged that there is much room for improvement in the Bill. They tabled almost 350 amendments to their own legislation during its passage through the Lords, and I will be interested to see how it proceeds through the Commons. I hope the Government will continue to engage constructively and look to address some of the concerns that have been outlined today.

21:20

[Robin Millar (Aberconwy) (Con)]

It is a privilege to follow the new hon. Member for City of Chester (Samantha Dixon). I congratulate her on her maiden speech and particularly on managing to introduce a reference to Lego. It is one of the great joys of speaking in this place to listen out for the new and innovative in a speech, and I commend her for that. I look forward to hearing more contributions from her in due course.

I rise to speak in favour of the Bill, which I believe will do much to improve value for money for public authorities, access for small and medium-sized businesses, and transparency for taxpayers. It will also deliver some of the ambition that my hon. Friend the Member for Totnes (Anthony Mangnall) alluded to in his speech. However, it is in considering a global Britain—an outward-looking, forward-leaning trading nation—that I will make some suggestions on how the Bill can be used to strengthen the Union of the United Kingdom. Like the right hon. Member for Ashton-under-Lyne (Angela Rayner), I must confess to feeling a frisson of excitement at the mention of procurement, having nearly two decades ago seen the introduction of the national procurement strategy for local government and the genuine impact it had on local government.

There is much to commend in the Bill. Having spent some time in local government as a councillor, I welcome the enhanced freedoms it offers to authorities, which will now have greater flexibility to devise tendering processes to fit their specific requirements. That will save time and money and allow councils to select contracts that best fit the needs of those they serve. Arguably, no one has a better picture of what is needed for a job than those who are responsible for delivery. No amount of checklists imposed by Brussels or Westminster can replace this local knowledge and hands-on experience.

As a former businessman, I welcome the Bill’s provisions on easy access to contracts for SMEs and guarantees of prompt payment. The creation of a single repository for business identification will prevent the duplication of paperwork, and the creation of a centralised procurement hub listing all tenders, frameworks and dynamic markets will improve access for small and medium-sized businesses across the public sector. Sadly, too often a labyrinth of paperwork and an anarchic landscape of procurement systems freeze SMEs out of public contracts and under-mine competition, adding costs to businesses and the taxpayer. This Bill makes strides towards eliminating those hurdles.

If I can commend the Bill as a former councillor and businessman, it is as an advocate for our Union that I see potential for strengthening the Bill. On the one hand, the Bill has positives in this regard. It contains a mechanism to ensure that procurement bodies throughout the UK have access to one another’s frameworks and dynamic markets—a move that may encourage co-operation. Likewise, the decision of the Welsh and Northern Ireland devolved authorities to opt in will ensure that businesses have improved access to contracts in the majority of the UK.

However, the devolution of the national policy statement power allows local authorities the autonomy, for example, to give regard to, but not necessarily conform to, the guidance of those centralising devolved authorities. The same applies to the devolution of the power to make regulations determining the form and location of the publication of procurement notices and other documents by authorities and suppliers. That raises the worrying prospect of further barriers to businesses attempting to access different parts of the UK, and of separate procurement hubs. Why? Because the devolved Administrations have on occasion pursued a strategy of non-co-operation. After all, on 1 June 2022 the Welsh Labour Economy Minister, Vaughan Gething, wrote to every council leader in Wales to state explicitly that his Administration will not assist local authorities that implement projects funded by the UK Government’s shared prosperity fund if they do not align with Welsh Government priorities.

Finally, as the majority of devolved Administration spending is funded by the UK taxpayer, the absence of a central, accessible and standardised repository of procurement information raises important questions about transparency. Is it not fair that UK taxpayers should have easy access to details about how their money is spent, wherever it is spent in the UK? Or must the spending of UK funds sent behind a devolved curtain remain unaccountable to their provider, the UK taxpayer?

That brings me to the subject of accountability. The Bill delivers powers to investigate authorities that may have breached procurement rules, and recent events suggest that this should be a particular cause for concern. A combination of journalistic investigation and leaks has revealed that the Scottish Government’s recent award of the contract for two island ferries to a political supporter was not in accordance with the terms of the advertised tender. We have also discovered that the state ferry procurement authority and civil servants advised against the award to Ferguson Marine, which had no history of such projects and would not provide industry-standard refund guarantees. Indeed, leaked documents revealed that civil servants had advised that the award may be unlawful, but this became apparent only when it was realised that the redactions in the documents could be reversed.

Subsequent investigation has revealed that Ferguson Marine was unique in receiving an in-person meeting and a 424-page briefing pack, much of which appears to have been copied and pasted into its official bid. The outcome is that the ships are now nearly four times over budget and over five years late, which is a significant cost to the UK taxpayer. It is particularly costly to the islands that the ferries were meant to serve, which have at times been cut off from the British mainland and from essential supplies. To top it all off, Audit Scotland recently revealed that a further £130 million used to bail out Ferguson Marine has gone missing due to sloppy accounting.

I cite this case study not to score points but to ask a very simple question: who watches the watchers? Unless the UK enjoys standardised reporting rules and a transparent, easy-access hub for public procurement information, its taxpayers have no guarantee that their money is being spent with integrity. This Bill offers high levels of flexibility, enough to account for the divergent needs of local and devolved authorities across our country. What it may benefit from, however, is a mechanism to ensure that the right to accountable public spending is shared across the United Kingdom.

I conclude with three requests to the Minister. The first is that a reserved right to commission an independent investigation into procurement by devolved Administrations, where there is good reason to believe that rules may have been broken, be included in the Bill. The second is that provision be made to ensure the comparability of data and UK-wide standards for recording and publishing tenders and procurement information. My final request is that he considers extending the Bill to Scotland to help secure value for money for taxpayers and to secure the benefits of competition across the UK for UK residents in Scotland. We have a duty to secure their interests and should expect at least a demonstration of how these standards will be met by the Scottish Government through an alternative route, if they persist in seeking to be excluded from the Bill.

21:28

[Hywel Williams (Arfon) (PC)]

Procurement in Wales is very much a devolved matter. I would have preferred to see our Senedd introduce its own legislation on the matter, but in this case there is a great deal of co-operation. The Welsh Government have opted to allow the UK Government to legislate on their behalf when it comes to developing post-EU procurement frameworks. Despite this, the Welsh Government are yet to recommend that the Senedd grants consent to the Bill. That is due to outstanding issues with the Bill passed by the House of Lords.

In particular, the Bill provides for concurrent powers in relation to devolved areas; the Welsh Government would much prefer these powers to be amended to be concurrent-plus powers, which would put in place an important constitutional protection by requiring the UK Government to receive consent before exercising powers in devolved areas. The Welsh Government are also concerned about the Bill’s commencement powers. I understand that there was an initial commitment from the UK Government that Welsh Ministers would have commencement powers in the Bill, but, as it is, the Bill provides for Ministers of the Crown to have those powers. I would be grateful if the Minister updated the House as to what progress has been made on those matters.

Given the creeping devolution power grab, I should note that there seems to be a significant degree of co-operation between both Governments on the Bill. I also welcome the fact that some amendments have already been made in the Lords at the request of the Welsh Government. I place on record my support for other amendments made in the Lords, particularly those setting out that requirements on climate change and the environment will be strategic priorities in the national procurement policy statement. I also welcome the amendments that will allow contracting authorities to exclude suppliers from contract awards for their involvement in activities linked to forced organ harvesting or unethical activities relating to human tissue. Those are non-Government amendments, but I hope that the UK Government will commit to retaining these changes. It would be good to hear from the Minister on that as well.

As I said, procurement is devolved and although much of the Bill is relevant to Wales, the Welsh Government will develop its own Welsh procurement policy statement, which will be underpinned by legislation recently passed in the Senedd: the Social Partnership and Public Procurement (Wales) Bill. The aim of that legislation, with its emphasis on outcomes rather than regulation and inputs, is to ensure that the new Welsh procurement regime delivers social, environmental, economic and cultural results, including fair work.

Many years ago, I co-delivered a long sequence of training for charity workers and trustees on the then new Charities Act. As a freelance trainer, living on my wits in the private sector, I needed no persuasion to see the value of that training. In respect of this legislation, the training and development of procurement professionals to ensure that they have the necessary knowledge and understanding of the new regime will be key to successful delivery. Both Governments intend to produce materials to support the delivery of the new regimes. There may well be significant differences between England and Wales in respect of procurement, so I ask the Minister to ensure now that the UK Government are mindful of potential divergence when commissioning future training and information, not least in respect of Wales securing materials and the actual delivery of training in both Welsh and English when intended for use in Wales.

Returning to the Social Partnership and Public Procurement (Wales) Bill, my Plaid Cymru colleagues in the Senedd are pushing the Welsh Government to set out clear targets for the proportion of procurement spend spent in Wales and spent with specific types of suppliers, such as small and medium-sized enterprises or social enterprises—that point has been mentioned by hon. Members on both sides of the House.

In conclusion, I am pleased to report that this is already a priority for my Plaid Cymru-run local authority Cyngor Gwynedd, which spent 61% of its procurement budget last year locally.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

21:34

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

It is a pleasure to be closing this debate on behalf of the Opposition. I thank right hon and hon. Members for their contributions this evening. My hon. Friend the Member for Blaenau Gwent (Nick Smith) highlighted the serious lack of transparency within our system, which led to huge waste during the pandemic, with millions handed out to many personal protective equipment companies. It was great to welcome my newly elected hon. Friend the Member for City of Chester (Samantha Dixon), who painted such a beautiful picture of her city that I am keen to visit it. She also highlighted the real benefits of social value and why it is a missed opportunity for this Government. My hon. Friend the Member for Birkenhead (Mick Whitley) also mentioned the support for social value.

As many Members have mentioned this evening, procurement is such an exciting and interesting topic! Let me be honest: if I went back and told that girl from Brixton that one day she would be closing a debate for the Opposition on this subject, she would probably have said, “What the hell is procurement?”

Having come to this place via local government and the London Assembly, I know how important procurement is to our communities. I know how local businesses, which are rooted in our communities, feel when they are sidelined for public contracts that they are more than capable of delivering. I know how important it is to make sure that we get value for every single penny of public money, and to make sure that we get the right framework for procurement to deliver the best services for our country.

Procurement accounts for a third of all public spending and most people involved with the sector will recognise the need for a simplified regime to replace the current daunting list of former EU regulations when approaching a contract. I want to work constructively with the Minister to make the new regime deliver for the British people as best it can, but unless the Government make the crucial amendments to the Bill that can deliver the value for money that our country deserves, it will be a missed opportunity. The Bill is also a missed opportunity to restore trust in our procurement process. We must recognise that trust in the procurement system has sadly been damaged by the mess of the personal protective equipment contracts on the Government’s watch.

I know the Government are keen to get maths on the agenda, so perhaps the Minister will not mind me doing a bit of “quick maths”— in the words of Big Shaq—in the House today. What do we get if we add a lack of due diligence over billions of pounds-worth of PPE, plus £18 million recouped from potentially fraudulent PPE contracts, plus an unfair VIP lane, giving access to lucrative contracts to those with connections to the Government? Let me tell the Minister: he will get £10 billion of PPE written off, with the public picking up a bill of more than £777,000 a day for PPE stored in China. As my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) said, that could cover 75,000 spaces in after-school clubs desperately needed by parents up and down the country. The Government do not need a report card to know that they have got an F in delivering value for money for the taxpayer.

No one is denying that covid caused incredible stresses in our procurement processes, but we on the Labour Benches were expecting the Government to learn the lessons from the PPE scandal. We expected the Bill to offer a system that gives the public confidence that it is fair and transparent, but what we have is a direct contract scheme that hands more, not fewer, powers to Ministers. It would give them a free rein to bypass crucial elements of whatever scrutiny they felt was needed. If the Minister wants an example of why scrutiny is important, I invite him to look at the Public Accounts Committee’s damning report on the awarding of contracts to Randox Laboratories. As the hon. Member for Richmond Park (Sarah Olney) said, there were a number of failings that cannot be excused. The report found that

“basic civil service practices to document contract decision making were not followed.”

It also said:

“The role of the Department’s ministers in approving the contract was also confused and unclear.”

It gets worse. Despite struggling to deliver on its first contract, the company was then awarded another contract extension worth £328 million, just seven months later. In this time, Randox saw a four-hundredfold increase in its profits in the year to June 2021. That is disgraceful.

[Anthony Mangnall]

Does the hon. Lady not take confidence from the platform the Bill creates whereby a business or organisation that has performed badly will not be able to bid into a contract? The whole point of the transparency measures is to stop that from happening. We have addressed those concerns and placed them in the very Bill that we are debating this evening.

[Florence Eshalomi]

I thank the hon. Gentleman for that point. What we in the Opposition are trying to say is that the transparency clauses the Government are talking about do not go far enough. We have a system that does not claw back the money that is wasted; at a time when we are telling members of the public to look at the cost of living, we are seeing money wasted and not clawed back.

Public transparency is not just a nice thing to say, but a vital tool to ensure that every single penny of public money is spent efficiently. I welcome some of the moves towards transparency in this Bill, but we can and must go further. We must look at Ukraine, which has created a transparency system that is open to the public and inspires trust. The Ukrainians have managed to do that while under attack by Russia. If they can do it, so can we.

Labour would follow in Ukraine’s footsteps and publish an accessible dashboard of Government contracts that is available to anyone as part of our public works pledge. We say that not only because transparency inspires public trust, but because it helps us to track the value created by public procurement in the UK. That matters, because value for public money and spending is ultimately about value to our communities. It is about creating well-paid jobs, ensuring environmental standards are fit for the next generation and preventing a race to the bottom on workers’ rights.

To that end, this Bill is a perfect chance to guarantee a strong commitment to social value and legislation. While I welcome some of the significant progress made on social value in the Lords with the national procurement policy statement, the Bill sadly does little to further the promise of social value or to build on the promise of the Public Services (Social Value) Act 2012.

Labour would go further. Our public works pledge would make social value mandatory in public contract design, but that is not all we would do. We would get tough on suppliers who fail to deliver for the taxpayer. We would guarantee transparency on how taxpayers’ money is spent. We would cut the red tape to give our SMEs a fair chance at winning contracts. We would oversee the biggest wave of insourcing in a generation to deliver public services that we can all be proud of.

The Bill is large and technical and there are many things I look forward to working constructively on with the Minister during line-by-line scrutiny. In that spirit, I end my remarks by praising the progress made on the Bill in the other place. Important amendments on the national procurement policy statement and protecting human rights are now included in the Bill as a result. I close by urging the Minister to commit today that the Government will not roll back on those key victories—that is vital. I hope he will work with me to ensure that our procurement system delivers for people up and down this country.

21:42

[The Parliamentary Secretary, Cabinet Office (Alex Burghart)]

I warmly welcome the new hon. Member for City of Chester (Samantha Dixon). I could not help but notice that the Chamber filled up slightly when she was speaking—almost as though she was more popular than the subject under debate today. I genuinely enjoyed her speech; as a former history teacher, the only thing I was disappointed not to hear mentioned was a beautiful silver penny from the early 10th century, which seems to show the walls of Chester. It was issued, we think, by Alfred the Great’s daughter—another great woman who represented her city.

The Bill before us is a major and exciting piece of post-Brexit legislation. It is an opportunity for this country to take back control of its procurement regime to the advantage of our businesses, our authorities, our public services and our country. I must at the outset say some words of thanks to Lord Agnew, who was instrumental in seeing this legislation drafted in the first place, to my right hon. Friend the Member for North East Somerset (Mr Rees-Mogg), who played a fundamental role in ensuring it was prepared for the statute books, and to Baroness Neville-Rolfe and Lord True, who took the Bill through in the other place.

Despite some of the remarks made by Opposition Members, I also thank the Opposition for their constructive stance towards this legislation. It is important that we get this right. Enormous opportunities are there to be taken from this £300 billion-worth of public procurement. We on the Government side of the House can very much see how those advantages will be made.

As I have said, the Bill will replace the current bureaucratic and process-driven EU regime for public procurement by creating a simpler and more flexible commercial system that better meets our country’s needs while remaining compliant with our international obligations.

[John Spellar]

Will the Minister give way?

[Alex Burghart]

Oh, I would be delighted to.

[John Spellar]

I know that the Minister has to talk about Brexit and all the rest of it to please those on his Back Benches, but surely the real problem is not in Brussels but in Whitehall, with Ministers who will not get a grip of Whitehall and behave like every other European country by backing our own industry.

[Alex Burghart]

If the right hon. Gentleman had witnessed the consultation that was held on the legislation, he would see that the problem very much was in Brussels. For a very long time now, authorities and businesses of all sizes in this country have been aware of the enormous limitations in the way in which EU procurement rules are set out. The Bill cuts through that.

[John Spellar]

No, it does not.

[Alex Burghart]

The right hon. Gentleman says that it does not, but the shadow spokeswoman, the right hon. Member for Ashton-under-Lyne (Angela Rayner), said at the start that it did and praised the fact that it was creating a single rulebook. This will make it easier for our authorities to procure decent services from people who will be able to provide better value for money and will be held to account better. I am very pleased that it is this Government who are bringing it forward.

Opening up public procurement to new entrants such as small businesses and social enterprises so that they can compete for public contracts is a major part of this work, as is embedding transparency throughout the commercial lifecycle so that the spending of taxpayers’ money can be properly scrutinised. The main benefits of the Bill have been reflected by hon. Members on both sides of the House, including my hon. Friend the Member for West Worcestershire (Harriett Baldwin). By delivering better value for money, supported by greater transparency and a bespoke approach to procurement, the Bill will provide greater flexibility for buyers to design their procurement process and create more opportunities to negotiate with suppliers. As my right hon. Friend the Member for North East Somerset said, that will drive better value for money.

As we slash red tape and drive innovation, more than 350 complicated and bureaucratic rules governing public spending in the EU will be removed. We are creating better and more sensible rules that will not only reduce costs for businesses in the public sector, but drive innovation. That will be at the heart of our work as we encourage authorities to publish pipelines that allow businesses of all sizes to prepare for contracts in new and interesting ways.

We will make it easier for people to do business with the public sector. The Bill will accelerate spending with small businesses. A new duty will require contracting authorities to consider SMEs, and will ensure that 30-day payment terms are made on a broader range of contracts.

We also intend to take tough action on underperforming suppliers. The Bill will put in place a new exclusions framework that will make it easier to exclude suppliers who have underperformed on other contracts. As has been mentioned a number of times, it will also create a new debarment register—accessible to all public sector organisations—that will list suppliers who must or may be excluded from contracts.

A number of hon. Members on both sides of the House have referred to the excellent work that has been done on the ProZorro service in Ukraine. I am pleased to be able to let the House know that Ukraine was on our advisory panel and has actually informed our work, and our single digital platform takes a lot from what Ukraine has done with ProZorro. The platform will enable everyone to have better access to public procurement data. Citizens will be able to scrutinise spending decisions, suppliers will be able to identify new opportunities to bid and collaborate, and buyers will be able to analyse the market and benchmark their performance against others on spending with SMEs, for example—better transparency; better for taxpayers.

[Nick Smith]

Will the Minister please tell us when his single digital platform will be ready for use by industry across our country?

[Alex Burghart]

The platform is based on a system that we already have. We are confident that we will be able to introduce it in line with bringing this Bill into force. Obviously, we have to pass the legislation and get Royal Assent, and then there will be a settling-in period. But it is going to be functional very soon.

We are also strengthening exclusion grounds. The Bill toughens the rules to combat modern slavery by allowing suppliers to be excluded when there is evidence of that, accepting that in some jurisdictions it is unlikely that a supplier would ever face conviction. My hon. Friend the Member for Totnes (Anthony Mangnall) made some important points on that score. It is absolutely right that we should be able to debar suppliers who have engaged in such dastardly crimes. It is too soon, however, to say exactly which suppliers are going to be debarred, but he has read the legislation and can see what the potential is. We will consider suppliers according to a prioritisation policy. Once on the list, suppliers will stay on it for up to five years unless they can show that they no longer pose a risk—these are the self-cleaning clauses. Any contracts awarded during an investigation can be terminated if the supplier is debarred. Safeguards are built into the grounds to stop suppliers from renaming themselves. I am happy to talk about those.

[Alicia Kearns]

I thank my hon. Friend for meeting me earlier today. It was enormously appreciated and I thank him for his time. How does he plan to overcome the risk of playing whack-a-mole—business after business being involved and MPs and others being relied on to flag them up? Will the procurement unit be proactive or will we instead focus on components and vulnerable sectors to ensure that we have the protections we need?

[Alex Burghart]

My hon. Friend raises an excellent point, which I was happy to discuss with her earlier. Obviously, the issue is under active consideration. In her speech, she also referenced debarment. I reassure her that the debarment provisions allow for proactive investigations into any supplier or subcontractor and that cases will be selected by the Minister for the Cabinet Office. Selections of cases will be governed by a robust prioritisation policy, which we will set out in due course. The debarment list will be publicly available for all contracting authorities to consult, demonstrating how transparency is at the heart of the Bill.

Value for money is a core component of what we are seeking to achieve. I assure the hon. Member for Birkenhead (Mick Whitley) that buyers will be able to give weight to bids that create jobs and opportunities for communities in the delivery of a contract, supporting and levelling up our objectives. Now that we have left the EU, central Government buyers can reserve competitions for contracts below certain thresholds for suppliers in the UK and/or SMEs and social enterprises only.

I am pushed for time, Madam Deputy Speaker, so allow me to draw my remarks to a close. This key legislation has been made possible only through our having left the European Union. It comes at a time when we have a need for a new procurement policy in this country. I say to the right hon. Member for Ashton-under-Lyne, who made a number of claims about PPE and VIP lanes, that the Bill provides strong safeguards to preserve the integrity of procurement. Equal treatment obligations require that all suppliers participating in the procurement must be treated the same. Additionally, any conflicts of interest should be identified for anyone acting for, or who has an influence on a decision made by or on behalf of, the contracting authority in relation to the procurement. If a conflict of interest puts a supplier at an unfair advantage and if steps to mitigate that cannot prevent that advantage, the supplier must be excluded. Furthermore, the direct award provisions have clear and narrow parameters for use. They include a new obligation to publish a transparency notice before making a direct award and maintain obligations to publish contract details once awarded.

This Government are absolutely committed to integrity, transparency, value for money and delivering for the British people. This Bill will make a difference to our procuring authorities, to our public services and to our taxpayers. It is good for our authorities, our taxpayers and our local communities, and it is good for our country. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

PROCUREMENT BILL [LORDS] (PROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Procurement Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 23 February 2023.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming Committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Andrew Stephenson.)

Question agreed to.

PROCUREMENT BILL [LORDS] (MONEY)

King’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Procurement Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of:

(a) any expenditure incurred under or by virtue of the Act by a person holding office under His Majesty or by a government department; and

(b) any increase attributable to the Act in the sums payable under or by virtue of any other Act out of money so provided.—(Andrew Stephenson.)

Question agreed to.

SUPPORTED HOUSING (REGULATORY OVERSIGHT) BILL (MONEY)

King’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Supported Housing (Regulatory Oversight) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Andrew Stephenson.)

Committee on Standards (Lay Members)

Monday 9th January 2023 Commons Chamber

[Relevant documents: Report of the House of Commons Commission, Lay Members of the Committee on Standards: Nomination of Candidates, HC 977, 15 December 2022.]

21:56

[The Leader of the House of Commons (Penny Mordaunt)]

I beg to move,

That, in accordance with Standing Order No. 149A:

(1) Sir Francis Habgood be appointed as a lay member of the Committee on Standards for a period of six years, with immediate effect;

(2) Rose Marie Parr, David Stirling and Carys Williams be appointed as lay members of the Committee on Standards for a period of six years, from 31 March 2023.

I thank the outgoing lay members of the Committee.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Leader of the House.

21:56

[Thangam Debbonaire (Bristol West) (Lab)]

In view of the hour, I do not intend to detain colleagues any further. I rise to support the motion officially on behalf of His Majesty’s Opposition. I welcome the appointments of Sir Francis Habgood, Rose Marie Parr, David Stirling and Carys Williams. They come with a range of relevant experience, and they have been properly interviewed, scrutinised and tested. They are recommended by the recruitment panel, and I welcome them. I also thank the outgoing members—Tammy Banks, Rita Dexter and Paul Thorogood, as they leave us—for the significant contribution they have made.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Chair of the Standards Committee.

21:57

[Sir Chris Bryant (Rhondda) (Lab)]

I will be very brief, too, but I felt that I ought to say a couple of words, since I am the only person in the House who has met all the candidates, as I was a member of the panel. We were very impressed by the standard of the candidates who came forward. Sir Francis Habgood, who if the House agrees tonight will be joining the Committee this week, will be a splendid addition to the Committee. One of the advantages of the four members that we will be agreeing tonight is that it will mean, for I think the first time, that the Standards Committee will have members from all four home nations of the United Kingdom, and therefore it will embody the Union in a more dramatic way than perhaps it has done in the past.

I pay tribute to the outgoing members who have already outgone, including Arun Midha, who sat on the panel, and the three members leaving at the end of March. With that, I very much hope that the House will agree the motion.

21:58

[John Spellar (Warley) (Lab)]

I am sorry at this hour to bring a note of dissension to proceedings. Colleagues who have braved these debates before will not be surprised, but basically what we have here is same old, same old. I notice we always employ recruitment consultants. I do not know why, really, because we still get people from the same old group moving around from quango to quango, but from a narrow basis. Of course, the recruitment consultants work on their criteria. What we are not getting in respect of either party is people who represent that vast part of the country that is not metropolitan—I include perhaps some of the metropolitan centres in Scotland and possibly in Northern Ireland—and who are not part of the great and the good. It is the same, by the way, with health authorities.

Going back a number of years, we had local businessmen and council leaders—people who were running businesses day to day and with real-life experience. We had trade union leaders—people who had come up from the shop floor and had real experience. We are dealing with the Committee on Standards; we are dealing with human behaviour.

22:04

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I need to interrupt the right hon. Gentleman, because we must take the motion relating to deferred Divisions.

Motion made, and Question put forthwith (Standing Order No. 41A(3)),

That, at this day’s sitting, Standing Order No. 41A (Deferred divisions) shall not apply to the Motions in the name of Penny Mordaunt relating to the Committee on Standards.—(Andrew Stephenson.)

Question agreed to.

Debate resumed.

Main Question again proposed.

[Madam Deputy Speaker]

I call John Spellar.

[John Spellar]

Thank you, Madam Deputy Speaker. We therefore do not have that breadth of experience and understanding coming in, one could often argue, in many cases.

I do not know any of these individuals; I take the word of Members who have actually met them that they may be quite estimable individuals. However, among that particular social set, there is contempt for the political process and for politics. We can see that coming through on many occasions and in the huge delays that take place when dealing with individual cases, as though this does not have an impact on the political process, political confidence or the individuals themselves.

The reason I raise this issue particularly in this debate, as in many others, is because this attitude is now endemic in the public life of this country. Real-life experience is denigrated. Political experience is particularly denigrated. I think that politics actually is a noble profession. Politics and politicians are absolutely necessary in order for the democratic will of the people to be brought about.

Therefore, by side-lining them and taking them out of decision making, and by claiming that they are non-political, when the nature of things, the conflict in society and the resolution of that conflict are inherently political, we are saying that these matters should not be entrusted to the people who actually put themselves before the public and get their vote—it should be taken away from there. This is just an example, but so much of life in this country now is done by a small set that is self-selecting and, these days, self-perpetuating. There is increasing evidence that the chances of people coming from an ordinary family and moving up through the system are diminishing. We are seeing that in a whole number of areas in this country, such as in the arts, where the opportunities for working-class youngsters to break through in theatre or music have been much diminished.

These people not only do very nicely out of all these quangos, but do so with a warm glow from feeling that they are doing a public service. However, what they are actually doing is leading to the stratification of society, the net result of which, such as in previous debate, is that the public feel frozen out until they have an opportunity to actually say, “We think we ought to be heard.” I urge elected Members on both sides of the House to take that on board seriously. We cannot change all of this immediately, but we can deal with it within our own affairs and say that Members of Parliament should, if I can use a phrase, take back control.

22:04

[Penny Mordaunt]

I shall be brief. I congratulate the hon. Member for Rhondda (Sir Chris Bryant) on his new year honour and thank the other Members who have spoken. I hope the whole House will support these new appointments today, and I thank the outgoing lay members.

I thank the right hon. Member for Warley (John Spellar) for his remarks. These are House matters and it is important that hon. Members feel able to speak on such appointments. I will briefly address the two issues that he raised. First, with regard to delays in cases being looked at and the good working of our standards systems, I assure him that that is a matter of concern to me, the hon. Member for Rhondda and Mr Speaker, and it is receiving our attention.

Secondly, with regard to recruitment, whether we are talking about posts on Committees, the staff of the House, or indeed Members of the House of Lords—I say while my Whip is not looking—it is incredibly important that a wide range of different backgrounds, geographies and perspectives are represented. I know that Mr Speaker feels the same way about that. I hope that the House will support the motion and I commend it to the House.

Question put and agreed to.

Business without Debate

Monday 9th January 2023 Commons Chamber

Committee on Standards

Motion made, and Question put forthwith (Standing Order No. 149(14)),

That this House:—

(1) approves the Fourth Report of the Committee on Standards, HC 855;

(2) endorses the recommendation in paragraph 112; and

(3) accordingly suspends Andrew Bridgen from the service of the House for a period of five sitting days, beginning on Tuesday 10 January 2023.—(Penny Mordaunt.)

Question agreed to.

[Sir Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr Deputy Speaker. Briefly, the motion has now been agreed that the hon. Member for North West Leicestershire (Andrew Bridgen) should be suspended from the service of the House for five sitting days. As is referred to in the motion, the Standards Committee also required him to make an apology to the House. I understand, of course, that he has not been able to be here today, but I hope that that can happen as soon as possible after he comes back.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the hon. Member for his point of order, which is on the record. I assume that that is exactly what will happen.

Foreign Affairs

Ordered,

That Stewart Malcolm McDonald be discharged from the Foreign Affairs Committee and Drew Hendry be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)

High Speed Rail (Crewe - Manchester) Bill

Ordered,

That Gavin Newlands be discharged from the High Speed Rail (Crewe - Manchester) Bill Select Committee and Dr Lisa Cameron be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)

[Sir Bill Wiggin (North Herefordshire) (Con)]

I am sure that the House would be delighted if we took all the motions together, but that is up to you, Mr Deputy Speaker.

[Mr Deputy Speaker (Mr Nigel Evans)]

We rarely get to hear your voice, Sir Bill. Tonight is a wonderful opportunity for the nation to share my joy in hearing you move these motions.

[Sir Bill Wiggin]

Thank you for your kind words, Mr Deputy Speaker. I am sure that my mother would agree with you.

Home Affairs

Ordered,

That Gary Sambrook be discharged from the Home Affairs Committee and Marco Longhi be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)

Northern Ireland Affairs

Ordered,

That Ian Paisley be discharged from the Northern Ireland Affairs Committee and Jim Shannon be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)

Science and Technology

Ordered,

That Iain Stewart be discharged from the Science and Technology Committee and Katherine Fletcher be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)

Scottish Affairs

Ordered,

That Mhairi Black be discharged from the Scottish Affairs Committee and Dr Philippa Whitford be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)

Work and Pensions

Ordered,

That Chris Stephens be discharged from the Work and Pensions Committee and David Linden be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)

Luton Flightpaths

Monday 9th January 2023 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Andrew Stephenson.)

22:07

[Anthony Browne (South Cambridgeshire) (Con)]

I am glad that we are saving the best until last. I am also grateful for the opportunity to discuss changes to flightpaths into Luton airport or, to use the technical name, the Swanwick airspace improvement programme—airspace deployment 6.

There are good arguments in favour of changing flightpaths in some way and I welcome the overarching ambition of the programme. Prior to the implementation of the new flightpaths last February, Luton and Stansted airports shared the same holding stacks for arrivals. For the UK’s fifth and third largest airports, that was a problem, because delays at one airport could lead to delays at the other. Separate arrival routes, combined with a dedicated holding stack for each airport, will be less prone to delays and will be safer, especially in the light of potential expansion at both airports, but the implementation of those changes is a major cause of local concern.

Behind the rather bland, technical-sounding name—airspace deployment 6—is a tale of deep distress for local residents in my constituency and neighbouring ones. South Cambridgeshire is quintessential English countryside, scattered with tranquil villages where many residents have lived their entire lives. Others moved there precisely because they wanted the peace and quiet. They wanted to escape the hustle and bustle of urban life.

All that changed in February, when the area became the new home of Luton airport’s holding stack. These once serene villages now have their tranquillity shattered by the roar of jet engines flying overhead. Rather than the soporific sounds of songbirds, residents are awoken by the sound of air brakes screeching overhead as aeroplanes prepare to land. Unsurprisingly, I and fellow MPs have received a huge number of anguished complaints from our constituents about this. They have told me about the distressing impact it has had on their mental and physical wellbeing. A few accounts particularly stick in mind.

Gareth Squance is a former Metropolitan police officer, who sought solace in the village of Gamlingay in my constituency. During his time in the Met, he was intentionally run over and left for dead while promoting safe cycle week. That incident left him suffering from post-traumatic stress disorder, for which noise is the primary trigger. Immersing himself in nature and recording the ambient noises provided a coping mechanism, but now the new plane noise forces him to leave the house with noise-cancelling headphones to avoid triggering a state of panic.

Suzie Smith is the third generation of her family to farm in the area. The aeroplane noise is keeping her up at night, which is affecting her ability to perform her duties around the farm in the early hours of the morning. She does not know what to do. This is the area she grew up in and loves, but the plane noise is making farm life unbearable. It has driven her to make countless complaints, which have only received generic, automated responses from Luton airport.

Maddy McKenzie suffers from complex health issues and struggles immensely with hypersensitivity. She finds the plane noise a relentless torment, and she is powerless to escape it. The noise is taking a toll on her physical and mental health. If she could move, she would, but instead she is trapped by the endless plane noise when all she wanted was a quiet life.

I have heard myriad similar tales from my constituents. Many residents are suffering sleepless nights as they are awoken every time a plane goes overhead, which can be up to every two minutes in busy periods. Other residents say they feel like prisoners in their homes, unable to use the gardens that were once their pride and joy, but are now echo chambers for the all-consuming plane noise. It has led some to conclude that enough is enough. After decades of living in these villages, the noise pollution has forced them to move. These people are valued members of their local community, and they are being forced out. Some people feel those that can move are the lucky ones. Others must accept their lot for a range of reasons from financial to health-related concerns. They are demoralised and cannot see any way out of this predicament.

The strength of emotion and the explosion of local outrage have led to a number of new campaign groups determined to end the noise. There are three groups I am aware of that are working tirelessly for a better solution: Reject Luton Airport Stacking, or RELAS; Community Alternatives to Luton’s Flight Path, or CALF; and Against Luton Airport Stack, or ALAS—my favourite acronym. We must ensure that their grievances are given a fair hearing, and that is the point of this Adjournment debate tonight.

I acknowledge that this is only one side of the coin. Air travel plays a vital role in our increasingly globalised world. Just recently, I was speaking about the business opportunities that new routes from Stansted to other life science hubs such as Boston and San Francisco could bring to Cambridgeshire and to the country as a whole. Like many others, I enjoy the opportunity to go on holiday, often travelling by plane. We must accept that some people will be affected by noise pollution from planes. Often people are aware of the impact and make calculated decisions about where they are going to live based on their tolerance levels. For example, many Londoners can cope with plane noise every day, and it blends into the cacophony of other city noises.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Will my hon. Friend give way?

[Anthony Browne]

I am very happy to give way to my hon. Friend and constituency neighbour.

[Mr Djanogly]

I congratulate my hon. Friend and Cambridgeshire neighbour on securing this debate, which is very important to many of those in both our constituencies, especially in the villages surrounding St Neots, and in my case in Great Gransden and Abbotsley in particular. My hon. Friend is making a very good case on noise levels, with which I totally agree—namely, that acceptable ambient noise levels are based on levels in urban areas, and are therefore inherently prejudicial to rural people. Does he not agree that this should be changed?

[Anthony Browne]

I thank my hon. Friend for that insightful intervention and I fully agree; I was going to make exactly the same point, but he beat me to it.

The people who chose to live in South Cambridgeshire did so because of the quiet rural life. They moved there for this reason and chose to bring their children up there for this reason. Very few, if any, ever foresaw the radical change that flightpaths could have on the area. It must have been quite a shock to hear that first plane soar noisily overhead.

Of course, there was a consultation beforehand, conducted by Luton airport and NATS. That consultation lasted five months and received over 2,000 responses. However, it took place in unusual circumstances, due to the ravages of covid. Engagement was virtual rather than the usual town hall meetings, and many people seemed unaware that the consultation was going on.

Since society has rebounded to some sense of normality, it is easy to forget the extraordinary times that prevailed during the pandemic. Air travel was down 90% on its pre-covid peak at certain points and people’s concern over flightpaths were crowded out by their more immediate health concerns about the pandemic. It is not for me to judge the adequacy of the consultation, although others may have their views, but I can say that I am disappointed that, as a key stakeholder, South Cambridgeshire District Council was not engaged more during the process. For many residents, the idea of planes above 5,000 feet sounded quite abstract and distant and of little consequence to their daily lives, but in reality they can often see the logos on each plane as it flies past, and the disruptive noise has permeated their daily lives.

[Mr Djanogly]

My hon. Friend is very kind to allow me to intervene again. He makes an important point, and this unintelligible consultation has worked only to the benefit of those in the flying industry who understood it. When we secured an increase of height for flying above the stack over my constituency, from 8,000 to 9,000 feet, there was no intimation at that point that planes would fly so low coming out of that stack and so quickly, to the prejudice of our constituents. Does he agree that the consultation should be rerun and the whole system should be revised?

[Anthony Browne]

The idea of rerunning the consultation is very interesting; I had not thought of it but will do so, as it sounds like a good idea.

It is clear from what my hon. Friend says and the correspondence from my constituents that the impact and disturbance has been much greater than people were led to believe when the consultation was taking place—they thought it would be very mild. I would argue that this was inevitable, given the current guidelines provided to NATS and Luton airport for the creation of the new flightpath. The guidance states that noise pollution below 51 decibels will not unduly impact the quality of life of those affected. As my hon. Friend said, for urban areas near airports that is perfectly reasonable as the aeroplane noise blends into the other staple sounds of city life. For instance, a street with traffic can consistently be around the 70-decibel level, so 51 decibels would not add much—the planes are only an additional, minor irritant. The same cannot be said for rural areas, however. In South Cambridgeshire the ambient noise levels are far lower, as I am sure they are in my hon. Friend’s constituency: during the day it is around 31 decibels and at night around 18—really very quiet. This means that aeroplane noise has a far greater impact. For context, if we are within 10 metres of a heavy goods vehicle passing, the noise is roughly 48 decibels. For someone living in a local village, such as Dry Drayton in my constituency, planes coming into land at 11 pm are very disruptive; it is the equivalent of many HGVs in quick succession passing close by their house.

That brings me to my first ask of the Minister—who I am glad is here tonight; thank you—which is to revise the guidance to reflect the differing ambient noise levels of urban and rural areas, the point my hon. Friend the Member for Huntingdon (Mr Djanogly) made so eloquently a minute or so ago. What is important is not the absolute noise of an aircraft, but its relative noise compared to the normal ambient noise of an area. Therefore, there should be a separate noise limit, lower than 51 decibels, for rural areas. That will encourage the design of flightpaths around areas where they will cause relatively less nuisance and distress due to the high levels of existing ambient noise, such as over cities. This should be reviewed with the upmost urgency and considered as part of the post-implementation review for the new Luton flightpaths —or part of a rerun consultation, as my hon. Friend suggests.

NATS and Luton airport are doing a post-implementation review of the flightpath changes. I welcomed an initial extension of this review to June 2023, as a result of concerns that flight volumes were still recovering from the pandemic levels, but I do not think that goes far enough. If the consultation is not redone as a whole, as my hon. Friend suggests, will the Minister ask the Civil Aviation Authority to extend the review by a further three months to September 2023? I wrote a letter to the authority on the matter on 2 December, but I am advised that it is still under consideration. Extending the review for three months to September would allow it to encompass the peak season of travel in July and August at normal operating levels. It is important that we understand the impact of the noise of the holiday season on constituents.

I also want to take the opportunity to raise my concern about the review process. It alarms me that it is the responsibility of NATS and Luton airport to report back to the Civil Aviation Authority on the success or otherwise of their flightpaths. There is no direct recourse for residents to lodge their complaints to the Civil Aviation Authority. That is tantamount to NATS and Luton airport marking their own homework. There is a real risk that the assessment is neither objective, nor seen to be by residents. That leads me to my third ask of the Minister.

[Richard Fuller (North East Bedfordshire) (Con)]

rose—

[Anthony Browne]

I am happy to give way.

[Richard Fuller]

I am on tenterhooks to hear what my hon. Friend will say. I thank him for calling this important debate. That my hon. Friend the Member for Huntingdon (Mr Djanogly), a neighbouring constituency, is also in his place shows its importance to our constituents. In my case, its importance is to those constituents from Potton through Sutton and down the eastern part of my constituency. To his point about rerunning the consultation and NATS and Luton airport marking their own homework, does he not agree that the change was made because Luton airport wants to expand—it is not about managing existing levels of air traffic but to facilitate a substantial 50% or 60% increase in flightpaths—and that that is another good reason for him to pursue the course that he suggested?

[Anthony Browne]

I thank my hon. Friend for that intervention. He makes the very important point, which I touched on briefly, that this is about expansion of the airport. That makes it even more important to get it right now, because whatever the noise levels are now, they will get far worse as traffic at Luton expands.

I will take my hon. Friend off his tenterhook—I was about to make my third ask of the Minister. Can the CAP1616 process for changing airspace be reviewed for this and future consultations to ensure that there is a more independent analysis once new flightpaths are implemented and that NATS and airports do not mark their own homework?

[Richard Fuller]

The other aspect of marking their own homework, which the Minister should be aware of from the debate, is that the land on which Luton airport is based is owned by Luton Borough Council, and that council gets to decide on planning issues to do with the expansion of Luton airport. By my reckoning, the council gets £20 million a year into its coffers at the moment—that will probably double—and not a penny of that money gets shared with constituents in Cambridgeshire, Huntingdonshire or Bedfordshire whose lives are impacted in the ways that my hon. Friend has suggested. Is it not incumbent on the Minister to look for legislation to say that if an airport is to be expanded, there needs to be a greater sharing of the benefits and that, basically, Luton needs to pay up for the rest of us who are affected and not put all its money in the council’s own pockets?

[Anthony Browne]

I thank my hon. Friend for raising that powerful point. I had not been aware of those financial implications.

My fourth and final ask for the Minister, in addition to those from my hon. Friends, is to join me in calling for greater transparency from National Air Traffic Services and Luton airport. The final decision on flightpaths has the potential to significantly impact many people’s lives for the foreseeable future, so it is vital that we gather all the data necessary to make a comprehensive and informed decision.

In October, I convened a meeting with National Air Traffic Services, Luton airport, the Civil Aviation Authority, campaign groups and my hon. Friend the Member for Huntingdon. In the meeting, National Air Traffic Services said that it was happy to share its automatic dependent surveillance-broadcast and radar data with the campaign groups, but it has subsequently made excuses that it would be too time consuming for its staff to do so. It would be an act of good faith if it shared that data, which would help bring much-needed transparency to what is actually happening. If National Air Traffic Services is confident that the terms of the consultation are being adhered to, it should be happy to share that information.

I ask the Minister to leave no stone unturned in ensuring that the most appropriate decision on Luton flightpaths is reached, and no stone unturned in ensuring that residents can have confidence in the whole process. The current settlement is causing distress to a large number of people across a large part of the country. While I accept that there must be winners and losers from a change in flightpaths over inhabited areas, I find it difficult to accept that stacking planes over a once-quiet rural area is the right solution. I look forward to hearing the Minister’s response and to working with him on this matter.

22:24

[The Minister of State, Department for Transport (Huw Merriman)]

I congratulate my hon. Friend the Member for South Cambridgeshire (Anthony Browne) on securing this debate on London Luton airport flightpaths. I thank my hon. Friends the Members for Huntingdon (Mr Djanogly) and for North East Bedfordshire (Richard Fuller) for their contributions.

I want to open by acknowledging the effects that aviation noise can have on the health and wellbeing of individuals and communities in the vicinity of airports and underneath flightpaths. It is important to take into consideration the impact of airspace changes. I understand the experiences my hon. Friend describes of his constituents following the implementation of airspace deployment 6, known as AD6. In 2017, the Government provided new air navigation guidance to the Civil Aviation Authority, which is now embedded within the authority’s CAP1616 airspace change process. AD6 is following that process.

The guidance requires sponsors of airspace change to undertake air pollution and noise impact assessments of their proposals, and to actively engage and consult with key stakeholders, including communities, on those proposals. The objective of AD6 is to segregate the arriving air traffic at Luton and Stansted airports. It has important safety and efficiency benefits, as my hon. Friend recognised.

AD6 was subject to public consultation between October 2020 and February 2021. In the light of the feedback received, the sponsors made some changes to the proposals. These included slightly shifting the location of the proposed new airborne holding stack, as well as increasing the minimum height in the stack by 1,000 feet. As my hon. Friend noted, AD6 is now the subject of a post-implementation review by the CAA, which seeks to determine whether the actual outcome of the airspace change is consistent with what was expected.

[Mr Djanogly]

The Minister mentions that after the initial consultation the height of the stack was increased. What we have been discussing is what happens after the airplanes come out of the stack. What no one realises and what was not in the consultation—a lot of clever people have been looking at the consultation, which is, frankly, unintelligible—is that the planes very quickly come out of the stack and descend. Why can the planes not stay at stack level until a much later time and then come down, thus not disturbing as many rural people?

[Huw Merriman]

I am about to refer to the airspace modernisation changes, which touch on the impact of lower and deeper climbs. If that does not address my hon. Friend’s point, I will happily meet him and take other points he may feel need to be made. There are wider airspace modernisation changes that also impact on this field, but I am happy to meet him if he does not feel reassured by what I say.

I am pleased to report to the House that the CAA’s review of AD6 allows two opportunities for any concerns to be raised by those who consider they are being affected by the airspace change we are discussing. The first is by contacting London Luton airport before it concludes its impact data collection. Secondly, those impacted can focus on the requirement of the sponsor to publish on the CAA’s airspace change portal its detailed assessment of how any impacts compare with what was set out in the airspace change proposal and accompanying options appraisal on which stakeholders were consulted. Once that assessment has been published, there will be a 28-day window during which anyone may provide feedback about whether the impacts of airspace change have been as they anticipated.

That feedback can be submitted directly to the Civil Aviation Authority via its airspace change portal, which gives local residents the direct channel for complaints post implementation that my hon. Friend the Member for South Cambridgeshire asked for in his third point. When completing the review, the CAA will take account both of the sponsor’s assessment and of the feedback that the CAA has received on it. The CAA’s own assessment will include an analysis of the actual flight track data to determine whether aircraft are flying the AD6 airspace design as expected.

I also note my hon. Friend’s fourth and final point: namely, his desire for the data to be available to communities. I agree that that would be helpful. As part of their post-implementation review submission to the Civil Aviation Authority, the sponsors must—I underline “must”—provide air traffic dispersion graphics, including both lateral and vertical actual flight track information. Before the completion of the review, residents will therefore get a chance to see the air traffic dispersion picture.

The Civil Aviation Authority will use all relevant evidence to determine whether AD6 has met its objectives and can be considered approved, or whether it must be amended or withdrawn; I hear the points that hon. Friends have made in that regard. I remind the House that the Government are not involved in the review process, which is entirely a matter for the Civil Aviation Authority.

[Richard Fuller]

I concur with the Minister’s point about the independence of the review. In my earlier intervention I raised a deeper point about airport expansion and the effect that it can have on surrounding communities. Such expansion makes no provision for financial consideration or remuneration for the communities affected. That is a particular issue in the context of Luton airport, because the property owner is Luton Borough Council, which directly financially benefits from expansion and is also the planning authority for the expansion. Will the Minister—as the last aviation Minister, my hon. Friend the Member for Witney (Robert Courts), suggested when he was taking legislation through the House—look at whether the law can be changed so that communities such as those in Cambridgeshire, Huntingdonshire and Bedfordshire, which are affected by airport expansion, can somehow be compensated when airport expansion changes are made?

[Huw Merriman]

I thank my hon. Friend for that point; he has made interesting points as the debate has evolved. I have some knowledge of the issue, in the sense that my constituency is relatively near Gatwick, although not in its flightpaths. It is fair to say that Gatwick provides a lot of economic regeneration for my constituency, but I also know that those who are closer to the airport are affected by airspace noise. It is also fair to say that Manchester Airports Group, which is involved in local authority remuneration, is in a similar situation to Luton airport with respect to what my hon. Friend has described. Yes, of course we can look at sharing the costs, but I also ask that we consider the wider economic benefits for those outside the airport perimeter. However, I obviously recognise that as noise encroaches, it becomes a pollution to them; I will touch on that point further. I recognise the point that my hon. Friend makes and am willing to look again at his ask.

I want to focus, albeit not in order, on the four points that my hon. Friend the Member for South Cambridgeshire made. His second point was a request to ensure that the post-implementation review period is extended to September 2023. I can give him that assurance. Following the request made to the CAA, it intends to extend the data collection period until September 2023. I ask him to accept that response, and I thank him very much for his suggestion. I hope that extending the consultation period will allow more transparency.

My hon. Friend’s first point—as I say, I am going in no particular order—raised the question of background or ambient noise. In 2018 the Department for Transport commissioned the CAA’s environmental research and consultancy department to examine the impact of aircraft noise in areas with different background or ambient noise. The study, which was published in 2019, found no significant association between annoyance and background or ambient noise when other factors were taken into account. That does not mean that the concerns that have been raised tonight should be dismissed. My hon. Friend has informed the House of some upsetting cases of constituents being affected by aviation noise. It can have a demonstrable impact on a person’s health and wellbeing, but that varies from individual to individual and is not attributed only to the noise itself.

However, my hon. Friend also recognised some of the benefits that aviation brings, and I hope he will not mind my joining him in recognising them as well. London Luton Airport makes a positive contribution to the local and national economy. It indirectly employs more than 9,400 staff, and is a key economic driver for the region. I welcome its continued recovery following the impacts of the covid-19 pandemic. We therefore need to strike a fair balance between the negative impacts of aviation on the local environment and communities and the positive economic benefits that flights bring. That is the challenge for aviation noise policy. The Government are committed to reducing the negative impacts of aviation where possible, and that includes noise. We will be considering what changes may be needed to aviation noise policy in due course, and we will set out our next steps later this year. I look forward to working with all my hon. Friends in that regard.

[Mr Djanogly]

Will my hon. Friend give way?

[Huw Merriman]

If I may, Mr Deputy Speaker, I will indeed give way.

[Mr Djanogly]

I thank my hon. Friend, who is being very generous.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I should point out that the debate must end promptly at 10.38 pm.

[Mr Djanogly]

If the noise policy changes are made, as my hon. Friend says they will be, will they be retrospective?

[Huw Merriman]

I do not wish to make policy on the hoof from the Dispatch Box, but I am willing to meet all three of my hon. Friends to discuss the point from which this should apply. Perhaps we can have that discussion, and I will accept any feedback that they wish to give me.

In the time that I have left—less than one minute—let me reiterate that the Government are committed to reducing the negative impacts of aviation where possible. We also recognise that we live in a fully interconnected, global world, and that the aviation sector is of material value to the UK economy. Airspace modernisation will help the delivery of quicker, quieter and cleaner journeys.

I thank my hon. Friend the Member for South Cambridgeshire not only for securing the debate, but—along with my hon. Friends the Members for North East Bedfordshire (Richard Fuller) and for Huntingdon (Mr Djanogly)—moving this matter further forward. Let me also put on the record how well they represent their constituents on this issue.

Question put and agreed to.

22:37

House adjourned.